Defer a windfall gains tax liability

Key information

If you are liable for windfall gains tax, you can defer paying the tax until the earliest of: 

• a dutiable transaction occurs in respect of the land (other than an excluded dutiable transaction), or
• a relevant acquisition occurs in respect of the landholder who owns the land (other than an excluded relevant acquisition), or
• 30 years after the rezoning event.

If deferral ceases, full payment is due within 30 days.

You can defer part of a windfall gains tax liability.

You can pay a windfall gains tax liability (including part of a liability or a deferred liability) at any time. 

Deferred windfall gains tax amounts attract interest at the applicable Treasury Corporation of Victoria 10-year bond rate. 

A dutiable transaction that occurs because of the sale of the land (i.e. a transfer for consideration) will generally cease deferral. Certain dutiable transactions and relevant acquisitions are excluded from ceasing deferral.

Dutiable transactions that do not cease deferral

Some dutiable transactions will not cease deferral, such as:

• a dutiable transaction for no consideration 
• a dutiable transaction to a legal personal representative of a deceased person
• a dutiable transaction that arises because of the operation of the economic entitlement provisions
• a dutiable transaction relating to land that is used and occupied exclusively for charitable purposes (if the land is relevant charitable land). 

Generally, when one of these dutiable transactions occurs, the transferee must elect to assume the liability (including any interest) for the deferral to continue. In such cases, the liability (including any interest) rolls over to the new owner. 

A relevant acquisition in the landholder who owns or is taken to hold the land can cease deferral. However, the following relevant acquisitions will not cease deferral:

• a further interest in the landholder, or
• a pro-rata increase in the interests of all unitholders or shareholders in the landholder.

Subdivisions

Subdivision does not trigger payment of any deferred windfall gains tax.

If land with a windfall gains tax liability is subdivided, the liability (including any interest) is apportioned to each child lot created under the subdivision. The tax is apportioned based on the size of each lot compared to all lots created. No liability is apportioned to any road, reserve or common property.

The terms of the original deferral continue for the child lot. The 30-year deferral limit does not restart.

Lots and reserves

If a plan of subdivision creates both lots and reserves, the total windfall gains tax liability (including any interest) is apportioned only to the lots created under the subdivision.

No liability is apportioned to other land that may be created under the subdivision, such as a reserve, road or common property.

Elect to defer your liability

To request a deferral, complete this form.