Trusts and land tax

Understand how land tax applies to trusts.

Key information

A trust is a legal arrangement where one person, called a trustee, holds and manages assets (like property, money or shares) for someone else, called a beneficiary. The trustee is the legal owner, but the beneficiary is the one who benefits. This could mean living on the land, earning rental income from it, or receiving money when it is sold.

Because trusts can be used to share income and reduce tax, we have special rules to make land tax fair. Land held on trust is usually taxed at a higher rate than land owned by individuals. This is called the trust surcharge. If the trust has an absentee beneficiary, an extra surcharge may also apply.

There are different trust structures and each has its own rules for land tax. Learn more about discretionary, unit and fixed trusts. The trust surcharge does not apply to land held by some trusts, including those created for the administration of a deceased estate during the concessionary period.

Trustees must notify us when they acquire land or when trust details change.

Managing land held in trust

Acquiring land

Acquiring land means buying or gaining an interest in land for the trust. Trustees must notify us within one month of acquiring land on trust. This applies even if you previously held the same land under a different trust.

You must lodge:

a Notice of Acquisition of an Interest in Land (LTX-Form-01) with Land Use Victoria
a Notice of Trust Acquisition of an Interest in Land (LTX-Trust-08) with us.

You must lodge these notifications each time you acquire additional land for the trust.

From 1 January 2026, trustees must notify us if they stop holding land in a trustee capacity, even if the title does not change.

Changes after acquisition

Trustees must notify us within one month if any of the following changes:

the type of trust
beneficial interests or unit holdings
nominated principal place of residence (PPR) beneficiaries.

Complete the LTX-Trust-19 form to update these details. This helps ensure the trust is taxed correctly and beneficiaries receive accurate individual assessments.

If land held in trust is sold, the trustee must notify us in writing within one month. If the type of trust changes or is no longer an excluded trust, the trustee must notify us in writing with supporting documentation (e.g. updated trust deed).

Notification of absentee beneficiaries

If a trust has at least one beneficiary who is an absentee person, it is an absentee trust. Trustees must notify us by 15 January of the year following the relevant land tax year using the absentee owner notification portal.

Penalties for failing to notify us

If you fail to notify us within one month, you may have to pay penalty tax on the additional amount that would have been assessed if you had notified us on time.

Assessments and rates

We assess each trust that a trustee acts for separately and send them an assessment. If you are the trustee of multiple trusts, you will receive a separate assessment for each trust.

Beneficiaries of discretionary or fixed trusts or unit holders of unit trusts may receive an individual assessment for their share of the trust land in addition to the trust assessment. To avoid double taxation, a deduction is applied to their individual assessment based on the tax already paid by the trustee.

Trust surcharge

The trust surcharge applies to most discretionary, unit and fixed trusts once the total value of the taxable land held in trust is $25,000 or more. When the total value of the taxable land is $3 million or more, there is no difference between the general and trust surcharge land tax rates. See the current rates for land tax.

The trust surcharge may not apply in certain circumstances:

Trustees can nominate a beneficiary who uses the land held in trust as their PPR.
Fixed and unit trusts where we have been notified of the beneficiaries or unit holders and their share of the land.
The trust qualifies as an excluded trust.

In these cases, the trust is assessed under general land tax rates and the surcharge does not apply.

Nominating a PPR beneficiary

Each trust can nominate one PPR beneficiary at a time, regardless of when the land was acquired. Trustees can make this nomination at any time using the LTX-Trust-19 form. If the nominated beneficiary dies or moves out, trustees must notify us within one month and may nominate someone else.

For land acquired before 1 January 2006 by a discretionary trust and where a valid nominated beneficiary was in place by 30 June 2006, the trust surcharge does not apply. If that nomination ends, the trustee can nominate a new beneficiary using the Discretionary Trust Nomination – Subsequent Beneficiary form.

Absentee owner surcharge

The absentee owner surcharge is in addition to land tax assessed at general or trust surcharge rates. An absentee trust is a trust that has at least one beneficiary who is an absentee person. See the current rates for land tax.

Land tax trust calculator

Trustees of trusts can estimate the trust's land tax at trust surcharge rates, including the absentee owner surcharge if it applies using the land tax trust calculator.

Trusts that do not pay the surcharge

Some trusts do not pay the trust surcharge, but notification is still required.

Administration trust for deceased estates

When a person dies, their estate enters a period of administration. During this time, the personal representative (executor or administrator) is acting as a trustee for the deceased estate. This is known as an administration trust.

The trust surcharge does not apply during the concessionary period. The concessionary period generally begins when the grant of the representation for the deceased estate is made (i.e. from the grant of probate or letters of administration). It ends at the earlier of the:

the completion of administration of the deceased estate, or
the third anniversary of the date of death of the deceased person or a further period approved by us.

You must advise us within one month of:

the start of the administration of a deceased estate (the date the personal representative is appointed)
the completion of the administration of a deceased estate.

Excluded trusts

To ensure they do not pay the surcharge rate, trustees of an excluded trust must notify us in writing that they act for an excluded trust. Beneficiaries of excluded trusts are not required to pay land tax on land held on trust for them.

A trust may qualify as an excluded trust if it is a:

charitable trust
concessional trust established for a person who has a disability or is subject to a guardianship order
public unit trust scheme (e.g. listed trust)
wholesale unit trust scheme (registered under Division 7, Part 2, Chapter 3 of the Duties Act 2000)
trust of which one or more of the beneficiaries is a club as referred to in s73 of the Land Tax Act 2005 or a member of such a club
complying superannuation trust (including approved deposit fund and pooled superannuation trust).

Implied or constructive trusts

These trusts are created by law when someone holds property for another person, even though no formal trust has been set up. The trust surcharge does not apply to the trustee who will be:

separately assessed on trust land at the general land tax rates
assessed as if the trust land was the only land owned by the trustee.

If the trustee holds land for more than one implied or constructive trust with the same beneficiaries, we will assess the trustee as though all lands were held by a single trust.

If a trustee of an implied or constructive trust acquires additional land, they must lodge the following within one month of acquiring the land:

A Notice of Acquisition of an Interest in Land (LTX-Form-01) with Land Use Victoria.
A Notice of Trust Acquisition of an Interest in Land (LTX-Trust-08) with us.

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