If you are an absentee owner, an absentee owner surcharge applies to taxable Victorian land you own. This surcharge is 2% from the 2020 land tax year (previously 1.5% from 1 January 2017 and 0.5% for the 2016 land tax year).
The surcharge is an additional amount that applies over the land tax you pay at general and trust surcharge rates.
If you are an absentee individual that owns taxable land, you must tell us via our our Absentee Owner Notification Portal. This is important because penalties may apply if you don’t tell us.
An absentee individual is any individual who:
- is not an Australian citizen or permanent resident, and
- does not ordinarily reside in Australia, and
- was either absent from Australia:
- on 31 December of the year prior to the tax year, or
- for more than six months in total in the calendar year prior to the tax year.
Are you an absentee individual?
There are up to four steps to determine whether a person is an absentee individual:
- Step 1: Is the individual an Australian citizen or permanent resident?
If yes, the individual is not an absentee person. If no, go to step 2.
- Step 2: Does the individual ordinarily reside in Australia?
If yes, the individual is not an absentee person. If no, go to step 3.
- Step 3: Was the individual absent from Australia on 31 December?
If yes, the individual is an absentee person. If no, go to step 4.
- Step 4: Was the individual absent from Australia for more than six months in total during the year prior to the tax year?
If yes, the individual is an absentee person. If no, the individual is not an absentee person.
Not an Australian citizen or resident
You must be an Australian citizen, permanent resident or a New Zealand citizen with a Special Category Visa (Subclass 444), otherwise you will be an absentee individual for the purposes of the surcharge.
If you are a New Zealand citizen and you do not know your visa details, you can use the Department of Home Affairs' website to access the Visa Entitlement Verification Online Service.
Does not 'ordinarily reside' in Australia
If you ordinarily reside in Australia, you are not an absentee individual. To decide where you ordinarily reside, there must be an element of permanence about where you live when compared to somewhere you might casually or intermittently stay.
This does not mean you have to be physically present in Australia on 31 December. We will consider a number of factors in deciding if you ordinarily reside in Australia, including:
- The period of your physical presence in Australia
A longer period indicates that a person has established a settled residence in Australia.
- Your intention or purpose for being in Australia
Employment or education is an indicator of your intention to live in Australia.
- Family and business/employment ties
Family members living in Australia indicate that you are more likely to ordinarily reside in Australia.
- Maintenance and location of assets
Bank accounts kept in Australia indicate that you are more likely to ordinarily reside in Australia.
- Social and living arrangements
Being a member of local sporting club, church group, volunteer association for example, indicates that a person is more likely to ordinarily reside in Australia.
Absent from Australia
You are absent from Australia if you are not physically in Australia.
Alice is a Malaysian citizen who does not hold an Australian permanent residency visa. Up until 1 February 2020, Alice lived in a house she owns in South Melbourne. On 1 February, Alice moved back to Malaysia.
Alice is not an Australian citizen or the holder of an Australian permanent residency visa, or a New Zealand citizen with a Special Category Visa (Subclass 444). She stopped living in Australia on 1 February 2020 and was not in Australia at 31 December 2020.
Alice is an absentee owner and must notify us that she is an absentee owner before 15 January 2021.
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. 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% if you voluntarily tell us that you are an absentee owner before we start an investigation.
- 20% if you tell us you are an absentee owner after we start an investigation.
- Up to 90% 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 via our Absentee Owner Notification Portal.