If you own property in Victoria, you may have to pay land tax.
An absentee owner surcharge applies to Victorian land owned by an absentee owner. This surcharge is 1.5 per cent from 1 January 2017 (previously 0.5 per cent).
The absentee owner surcharge is an additional amount that applies over the land tax you pay at general and trust surcharge rates.
You must tell us if you are an absentee owner. This is important. Penalties may apply if you don’t tell us.
What is an absentee owner?
An absentee owner is an absentee person that owns land.
An absentee person is one of the following:
Each of these terms has a specific meaning. You should refer to each term for further information to see if the absentee owner surcharge applies to you.
When will the surcharge apply?
If you are an absentee owner at 31 December, the surcharge will apply in the following land tax year.
The surcharge is calculated on the total taxable value of Victorian land you own and will be included in your Victorian land tax assessment. Depending on how and who owns the land, the surcharge also applies to jointly owned land.
The surcharge does not apply if land is exempt from land tax or if the total taxable value of your land(s) is below the threshold.
If your land attracts special land tax, you’ll pay an absentee owner flat rate of 6.5 per cent from 1 January 2017 (previously 5.5 per cent).
Please use our eligibility tool to help you to determine if you are liable (if you have to pay) the surcharge.
Tell us if you’re an absentee owner
If you are an absentee owner at 31 December, you must tell us before 15 January of the following year using our Absentee Owner Notification Portal.
Once you have notified us that you are an absentee owner, your land tax assessments will include the absentee owner surcharge. Further, we will assume that your absentee owner status is current until you tell us otherwise.
Failing to tell us you are an absentee owner is a notification default under the Taxation Administration Act 1997. When this happens, you will be liable for penalty tax on the surcharge amount assessed, in accordance with our revenue ruling on penalty tax and interest. This may be penalty tax of:
- 5 per cent if you voluntarily tell us that you are an absentee owner before we start investigating you,
- 20 per cent if you tell us you are an absentee owner after we start an investigation, and
- Up to 90 per cent if we believe that you intentionally disregarded the law and hindered our investigation
Changes to your absentee owner status
Notify us of any change in your absentee owner status by updating your details through our Absentee Owner Notification Portal.
Application for exemption
An absentee person who holds a controlling interest in an absentee corporation may, in some circumstances, be eligible for an exemption. The effect of the exemption is that the absentee person, who holds a controlling interest in the absentee corporation, is taken to not hold that controlling interest. The result is the corporation that owns the land will not be considered an absentee corporation, and therefore will be exempt from the absentee owner surcharge.
The exemption is only available to an absentee person who holds a controlling interest in a corporation that is incorporated in Australia and owns land in its own right. It is not available where the corporation owns land as the trustee of an absentee trust.
The exemption is intended to apply to those corporations which conduct a commercial operation in Australia and whose commercial activities make a strong and positive contribution to the Victorian economy and community by engaging local labour and using local materials and services through an Australian-based entity.
The Treasurer has published guidelines in the Government Gazette, outlining the basis on which exemption decisions are to be made. You should refer to these guidelines to determine whether you are eligible for the exemption. If you believe you are entitled to the exemption, you can apply for an exemption.