What is GAIC?
The growth areas infrastructure contribution (GAIC) was established to help provide infrastructure in Melbourne’s expanding fringe suburbs.
It is a one off-contribution payable on certain events usually associated with urban property development. These are usually buying, subdividing, and applying for a building permit on large blocks of land.
Generally, the GAIC does not apply to events involving land under 0.41 hectares (4100 square metres or one acre).
Where does GAIC apply?
The GAIC only applies to land in the contribution area. This is growth area land zoned for urban use and development in the municipalities of:
Our forms do not allow submissions for properties that are not located within one of these municipalities.
There are four types of land that may be affected: type A, B-1, B-2 and C. These different types of land became part of the contribution area and subject to the GAIC at different times, with different rates applying to different types of land.
Affected land will have a GAIC recording placed over the title to the land which will restrict changes to title. This recording is only removed once the GAIC has been paid.
To facilitate the development of affected land, we issue a number of certificates and notices.
Is your land affected?
In most instances, if you are buying a new home on a residential lot in the contribution area, your developer will have already paid the GAIC in the course of developing the land.
However, if you buy or own an existing property, your land may be affected. We issue GAIC certificates which tell you the GAIC status of land and what, if any, liability exists. There is no charge for these certificates.
What is a GAIC event?
Four events trigger a GAIC liability on affected land:
- Transfers of title - these are transactions resulting in a change of ownership and are subject to land transfer duty. They include contracts of sale, sub sales and any other transfers of the title of the land.
- Subdivisions - the issue of a statement of compliance for a plan of subdivision.
- Building permits - an application for a building permit in the contribution area.
- Significant acquisitions - these involve an acquisition in a landholder that owns affected land subject to landholder duty. A landholder is a private unit trust, private company, wholesale unit trust, a public unit trust or a listed company that has land holdings in Victoria with an unencumbered value of $1 million or more.
The GAIC is imposed when the first of these events takes place and affects the land until it is paid. Once fully paid, the GAIC recording over the land title is removed and the contribution will not apply to any subsequent GAIC events.
If land outside the contribution area subsequently becomes part of the contribution area, the GAIC will be triggered on the first GAIC event after this happens.
Who is liable for GAIC?
When affected land is sold or transferred, the new owner of affected land is liable. For a significant acquisition, both the acquirer(s) and the landholder are jointly and severally liable.
Otherwise, the owner of the land when the statement of compliance is issued or the building permit is made is liable.
No-liability, excluded and exempt events
Not all GAIC events result in a GAIC liability being triggered at the time of that event. No-liability events, excluded events and exempt events do not trigger the GAIC.
Instead, these events postpone triggering the liability until the next GAIC event, unless an appropriate exemption or exclusion also applies to that event.
No liability events include buying a lot of land that is:
- Up to five hectares in area.
- Between 5 and 10 hectares which, before July 2010, had a house on it you could live in.
You may trigger the GAIC if you subdivide or apply for a building permit on this land.
There are a number of excluded events relating to affected land including:
- A subdivision to separate an existing house from a larger piece of land.
- Demolishing or repairing an existing building.
- Building works under the GAIC threshold ($1,193,260 for 2018-19 and $1,217,230 for 2019-20).
- Certain events which happened before land became part of the contribution area.
Certain transfers and significant acquisitions in a landholder of affected land are exempt from GAIC.
These identified transfers and significant acquisitions are also exempt from duty, such the transfer of land pursuant to a deceased estate or the intergenerational transfer of a family farm.
Liability for GAIC
Generally, if the GAIC event occurs after 1 July 2010 and the land is in the contribution area, the liability to pay the GAIC arises on the day of the event.
Note: If your event happened between 2 December 2008 and 30 August 2010, depending on your circumstances, you may have a GAIC liability.
Transfers of land
If you buy or are transferred affected land (even if you only buy part of or a part interest the land), you need to pay the GAIC unless it is a no-liability or excluded event, or an exemption applies.
In a sub-sale arrangement, the ultimate purchaser who is registered on title is liable to pay.
The GAIC is due within three months of the title being transferred (normally settlement). For example, if affected land is transferred on 1 March 2018, the GAIC must be paid on or before 1 June 2018.
Note: Your GAIC liability is separate and additional to any land transfer duty that applies.
If you make a relevant acquisition in a landholder which owns affected land, both the acquirer(s) and the landholder are jointly and severally liable to pay GAIC in proportion to the acquisition which has occurred.
The GAIC is due within three months of the relevant acquisition unless the acquisition is a no liability, exempt or excluded event.
Subdivision or building permit
If you own the affected land being subdivided or for which you are applying for a building permit, you need to pay the GAIC.
For subdivisions of land, GAIC must be paid within three months after the issue of the statement of compliance. For building permit applications, GAIC must be paid before the permit is issued.
You can, however, apply for a staged payment arrangement before the due date for payment.
Public purpose land subdivisions
If you subdivide land solely to provide land for a public purpose, you will trigger GAIC on that public purpose lot. The GAIC is proportional to the size of the public purpose lot.
You must make this payment within three months of the issue of the statement of compliance for the plan of subdivision. There is no access to the staged payment arrangements in respect of these subdivisions.
However, public purpose land subdivisions will not trigger the GAIC on the rest of the land from which the public purpose lot is subdivided. The GAIC will become payable upon the next GAIC event on the balance land, unless it is an excluded event or exemption applies.
The GAIC rates for the 2018-19 financial year are:
- $95,440 per hectare for type A land, and
- $113,360 per hectare for types B-1, B-2 and C land.
The GAIC rates for the 2019-20 financial year are:
- $97,360 per hectare for type A land, and
- $115,640 per hectare for types B-1, B-2 and C land.
GAIC rates increase annually by CPI. The indexed GAIC amount will be on the Department of Environment, Land, Water and Planning website by 1 June of the preceding financial year.
Example of GAIC calculation
Zara owns a type-A land of 12 hectares in the contribution area. Zara transferred all of her interests in the land to Chris in July 2018. That transfer will be the first GAIC event in relation to the land. As the transferee, Chris will be liable to pay $1,145,280 (12 x $95,440) of GAIC in respect of the acquisition of the land.
Managing your GAIC liability
Pay the GAIC
Before paying the GAIC, you should contact us so we can advise you on the best way of managing your liability. To avoid penalties, you should contact us within three months of your liability arising.
If you trigger the GAIC by buying affected land, we normally need to see copies of the transfer of land and the contract of sale. If you acquired the land through another arrangement, we need to see the documentary evidence of that arrangement.
Apply for a no GAIC liability certificate
If you think that a no liability or an excluded event applies to your GAIC event on affected land, you can apply for a certificate of no GAIC liability.
Apply for an exemption
If you think that an exemption applies to your transfer of affected land or significant acquisition, you can apply for an exemption.
Deferring your liability
If you have triggered the GAIC by buying or being transferred affected land, or making a significant acquisition, you can apply to defer up to 100 per cent of the GAIC liability until the next GAIC event.
You must apply before the due date for payment, that is within three months of the transfer or significant acquisition.
Note: For a significant acquisition, an election to defer made by the acquirer of the interest in the landholder will be taken to have been made by all persons who are jointly and severally liable for the GAIC payment for that acquisition.
If a GAIC liability has been deferred, the GAIC liability may roll-over to a subsequent transferee (the new land owner). However, a deferred GAIC liability will be subject to indexation and/or interest. Interest is calculated on a daily basis for the deferred period at the Victorian 10-year bond rate.
If you made a significant acquisition in a landholder of land in the contribution area, you must lodge a GAIC acquisition statement via the GAIC SmartForm with us within three months after the date of the acquisition. If the landholder has prepared and lodged this form already, the acquirer need not lodge another one.
Note: You can use the same form to elect to defer the GAIC liability. You must lodge this SmartForm even if a Section 83 Landholder Acquisition Statement has been lodged for the same acquisition under the Duties Act 2000. If you wish to pay the GAIC, please contact us.
Staged payment arrangements
An approved staged payment arrangement allows you to pay the GAIC in stages aligning with the subdivision or development of the land, rather than as a single payment.
If you want to pay the GAIC in stages, you must lodge a completed application for a staged payment approval with the Victorian Planning Authority (VPA) before the day on which the GAIC is payable.
You apply to the Minister for Planning through the VPA. You can apply before the event occurs, but you must apply before the due date for payment.
If your application is approved, the liability becomes due on the dates specified in the arrangement subject to a number of conditions.
Interest will accrue on the staged GAIC liability. The payment of interest is calculated on a daily basis for the period that the interest is payable on the GAIC liability as staged at the Victorian 10-year bond rate applying from time to time.
Note: You cannot apply for a staged payment arrangement if the GAIC was triggered by the issue of a statement of compliance on a plan of subdivision for the sole purpose of providing for public purpose land.
If you trigger the GAIC by subdividing or developing the land, you may apply to pay the GAIC through a work-in-kind agreement.
This is an agreement between you and the Minister for Planning under which you agree to provide land and/or works (construction of state infrastructure) instead of a cash payment to meet the GAIC liability in whole or in part. You apply to the Minister for Planning through the Victorian Planning Authority.
To be eligible, the land or works must be situated in a growth area and of a type that may be funded from the Growth Areas Public Transport Fund or the Building New Communities Fund.
Please note these agreements may take considerable time to prepare so you should apply well before the GAIC event takes place.
If you choose to pay the GAIC this way, your agreement must be approved before your liability is due.
Failure to pay GAIC
Failure to pay GAIC by the due date constitutes a tax default and the interest and penalty tax provisions of the Taxation Administration Act 1997 (TAA) will apply.
Further, the whole amount of GAIC becomes payable immediately as if the GAIC had not been deferred or staged.
A reduction or exemption from paying GAIC may be available from the Governor in Council and/or the Hardship Relief Board under exceptional circumstances.
The GAIC Hardship Relief Board may grant relief to a person who suffers financial hardship from the imposition of the GAIC.
GAIC is administered in accordance with the TAA in respect of assessments, refunds, interest and penalty tax, objections and appeals, disclosure of information, investigation powers, recovery and other administrative provisions.
An application for a refund of overpaid GAIC must be made in accordance with the refund provisions in Part 4 of the TAA.
Subdivisions involving public purpose land
Frontlink Pty Ltd v Commissioner of State Revenue  VSC 25 concerned the application of the now repealed s201RF(b) of the Planning and Environment Act 1987, under which a subdivision of land for the sole purpose of providing land for transport infrastructure or any other public purpose is an excluded subdivision of land.
Landowners who believe they may have overpaid GAIC as a result of this case should apply to us in accordance with the TAA refund provisions. You have five years from the date of the overpayment in which to apply. Refund applications will be considered on a case-by-case basis.
Note: s201RF(b) was repealed by the State Taxation Acts Further Amendment Act 2016. Further, a landowner who now subdivides land for the sole purpose of setting aside land for a public purpose must pay GAIC on that public purpose lot within three months of the issue of the statement of compliance.
For more information on this change, refer to our bulletin GAIC - Public purpose land subdivisions.
Objections to GAIC assessments
GAIC assessments are issued under the TAA. If you choose to lodge an objection to a GAIC assessment, you must do so be in writing to us within 60 days of the date of service of the assessment. We will consider your objection in consultation with the Victorian Planning Authority.
You can only object if:
- The folio of the register relating to the land was incorrectly recorded with a notification indicating that the land may be a land in a contribution area.
- GAIC is incorrectly assessed because the GAIC event is an excluded event or a no GAIC liability circumstance applies to the event that has occurred.
- The assessment is inaccurate because the amount of GAIC is incorrectly calculated.
- GAIC is incorrectly assessed because the land is exempt from GAIC under a specific duty exemption.