Beneficial owners
Beneficiaries of a fixed trust.
Notification of beneficial owners
A fixed trust can notify the State Revenue Office of the beneficial owners using the Notification or Change of Beneficial Interests/Unit holdings in Land Form. The notification will apply from the following year’s land tax assessment.
If a notification is in place, all lands owned will be assessed at general land tax rates.
If a notification is not in place, lands owned will be assessed at surcharge land tax rates. This will exclude any principal place of residence (PPR) or primary production land (PPL) if eligible for exemption.
Notification of unit holdings
A unit trust can notify us of the unit holdings using the Notification or Change of Beneficial Interests/Unit Holdings in Land Form. The notification will apply from the following year’s land tax assessment.
If a notification is in place, all lands owned will be assessed at general land tax rates.
If a notification is not in place, lands owned will be assessed at surcharge land tax rates. This will exclude any PPL eligible for exemption. If a notification is not in place, a PPR beneficiary can be nominated and the PPR land will be assessed at general land tax rates on a single holding basis.
Fixed trust
A fixed trust is any trust that is not an excluded trust, a discretionary trust or a trust to which a unit trust scheme relates.
The beneficiaries of a fixed trust usually cannot be changed. The proportion of a beneficiary’s interest cannot be varied.
Joint ownership
A joint ownership exists where more than one individual, company or trust own land together.
Each unique combination of owners is considered a different joint ownership and is a separate customer for land tax purposes.
Joint ownerships can be liable for land tax and will receive a joint ownership assessment. Joint owners may be individually liable for their share of jointly owned land if they own other taxable land.
Land
All land in Victoria is potentially taxable for land tax purposes, including all vacant land and land with buildings affixed.
Generally the land contained in a certificate of title is land for land tax purposes.
Nominated beneficiary
A discretionary trust had a one-off opportunity to nominate a beneficiary of the discretionary trust for land held prior to 31 December 2005. The closing date for this nomination was 30 September 2006.
If a beneficiary was nominated at this time, all land held prior to 31 December 2005 is assessed at general rates. However, if a nominated PPR beneficiary is using land as their PPR, it will be assessed at general land tax rates on a single holding basis.
Any land acquired after 31 December 2005 will be assessed at surcharge land tax rates unless a nominated PPR beneficiary is using the land as their PPR.
Own
Generally, you own land if you have an interest in land, either on your own or with other individuals, companies or trusts. You may also be considered an owner of land if you are a life tenant or have a lease or licence from the Crown.
Principal Place of Residence beneficiary
If land held by a trustee of a discretionary or unit trust is occupied by a beneficiary as their principal place of residence (PPR), the trustee can nominate the beneficiary as a PPR beneficiary.
To be eligible, the nominated PPR beneficiary must use and occupy the land as their PPR.
The PPR land will be separately assessed, as though it were the only land owned by the trustee, at the general rates of land tax. The PPR beneficiary will not be assessed on the PPR land.
A trustee can nominate a PPR beneficiary of a discretionary or unit trust by submitting a Nomination of PPR Beneficiary Form.
Only one PPR beneficiary can be nominated per trust. A unit trust that has notified us of the unit holdings cannot nominate a PPR beneficiary.
Primary production
Primary production land (PPL) includes farming activities such as cultivation of crops, maintenance of animals or poultry, bees, commercial fishing and the cultivation of plants, seedlings, mushrooms or orchids.
To be eligible for an exemption, there must be a sale of the products resulting from the primary production activity.
Three separate exemptions are available for land used for primary production. The eligibility criteria for the exemption will depend on where the land is located.
Land being prepared for primary production may be exempt for up to two years.
Principal place of residence
A principal place of residence (PPR) is land used and occupied by a natural person (an individual) as their principal home.
For a PPR exemption:
- The owner or beneficiary must live there as their main residence for at least six months, beginning in the year before the assessment, and
- The land must have a building on it which can lawfully be used as a residence
Taxable value
Land tax is calculated using the taxable value (site value) of land provided by municipal councils.
Site value is the unimproved value of the land excluding capital improvements such as buildings and is available on your council rate notice.
Total taxable value
The total taxable value is the sum of the values of all taxable land owned. This value is used to calculate land tax liability.
Exempt land is excluded from the total taxable value.
Trust
Land can be held by an entity for the benefit of another. This is called a trust.
If land is held in a trust, the trustee legally owns the land (that is, the trustee’s name will be on the certificate of title for the land) and the beneficiary owns the land beneficially (that is, the trust legally holds the property for the benefit of the beneficiary).
Examples include discretionary trust, fixed trust, unit trust, administration trust and superannuation trust.
Trustee
A trustee is an entity who holds and manages land on behalf of beneficiaries of a trust.
The trustee legally owns the land (that is, the trustee’s name will be on the certificate of title for the land) and holds it in trust for the benefit of the beneficiaries of the trust.
Trustees may include executors, administrators or guardians.
