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Principal place of residence exemption

The principal place of residence (PPR) exemption is available for properties owned and occupied as the PPR of a natural person.

The exemption also extends to trustees of certain trusts, excluding discretionary and unit trusts, where land is owned by a trustee of a fixed trust.

Common errors are:

  • A PPR exemption registered in another Australian jurisdiction.
  • Failure to advise us or provide a forwarding address when residing in another residence within Victoria, interstate or overseas.
  • Not advising us that the property is leased or is a holiday home.
  • Not advising us that the property is used for business purposes.
  • Incorrectly completing the notice of acquisition.
  • Not advising us of changes of ownership, including family transfers, deceased estates, trusts and superannuation funds.

More about the PPR exemption

Other land tax exemptions

We investigate a range of general exemptions relating to land tax.

he investigative focus is on land used for primary production and exemptions that have or should have ceased, which may attract special land tax.

Other exemptions investigated include: sporting, recreational or cultural land, rooming houses, residential care facilities, supported residential services, retirement villages, caravan parks, crown land, statutory authorities and land being used as a mine.

Common errors are:

  • Not being aware that a change in land zoning may affect the exemption.
  • Not fulfilling the business and ownership criteria when the land is within the metropolitan boundary and within an urban zone.
  • Not being aware that agistment of animals for non-primary production purposes attracts land tax.
  • Not advising us when the use of the property has changed.

More about land tax exemptions

Corporate land tax

The corporate land tax (COLT) compliance program focuses on companies that are found to be related, such as land holding entities with common shareholdings.

Cases are identified through a range of data matching activities, including Australian Securities and Investments Commission (ASIC) data.

Related corporations may be treated as a single corporation and land tax reassessed on the aggregate taxable value of Victorian land. Members of the group are assessed as a single corporation and are jointly liable for the tax payable by the group.

Compliance activities are also undertaken on trust land, and the obligations under the trust provisions, using a range of data matching techniques including matching Australian Taxation Office (ATO) trust records with our data.

All trustees holding land in Victoria are required to notify the Commissioner. If the beneficial interest in land is not declared within the statutory time frame, a trust surcharge rate applies of 0.375 per cent for landholdings between $25,000 and $1.8 million.

The COLT compliance program seeks to ensure that Victorian land is accurately recorded in the correct legal and beneficial ownership and that tax is applied to the aggregate value of lands or at the surcharge rate.

Common errors are:

  • Not being aware that companies may be related for land tax purposes and the situations in which these related corporations form a group.
  • Not fulfilling the requirements to notify us when land is being held on trust.
  • Not notifying us that land tax assessments have been incorrectly issued to a company in its own right and not in its capacity as a trustee.

More about land tax and groups

Trusts

The land tax trust compliance program focuses on identifying Victorian-based land holding trusts that have failed to notify us of land owned in their capacity as trustee. One source of information used is ATO data.

For taxpayers who have notified us of a trust relationship, a surcharge assessment will be issued for those lands held on trust.

Common errors are:

  • Corporations who fail to notify us that land is being held on trust.
  • Failure to lodge a notice of trust acquisition of an interest in land with us.

More about land tax and trusts

Crown land

The lessee of Crown land is deemed to be the owner of the land for land tax purposes. Generally, the lessee of the land is liable for land tax, unless the lease is a retail premises lease or the lessee is eligible for an exemption. 

Common errors are:

  • Not notifying us of the commencement of a Crown lease within Victoria.
  • Not notifying us of the omission of a Crown lease from current land holdings.

Absentee owner surcharge

An absentee owner surcharge applies to Victorian land owned by an absentee owner. 

The absentee owner surcharge is an additional amount applying over the land tax you pay at general and trust surcharge rates. Depending on how and who owns the land, the surcharge also applies to jointly owned land.

From 1 January 2017, this surcharge is 1.5 per cent (previously 0.5 per cent).

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.

You must tell us if you are an absentee owner. This is important. Penalties may apply if you don’t tell us.

More on the absentee owner surcharge