The site value of your land is used to calculate land tax. We refer to this as ‘taxable value’ on your land tax assessment notice.
What is a site value?
A site value is the unimproved value of your land, which means it excludes capital improvements such as buildings. Site values are determined as part of the annual statewide general valuation process conducted by the Valuer-General Victoria. These valuations are made annually as at 1 January of the previous calendar year.
The State Revenue Office is not involved in the property valuation process, but we use these valuations to calculate certain taxes.
For 2023 land tax assessments, we are using valuations made on 1 January 2022.
You can find the total taxable value of your land on the right hand side of your Statement of Lands, which accompanies your land tax assessment. You can also access this data by registering for My Land Tax.
How site value affects land tax
Land tax is assessed on the total value of your taxable land. It uses a sliding scale of tax rates that progressively increases as your total taxable value gets higher.
If the site value of any of your land has increased, it may push you into a higher tax bracket, increasing the amount of land tax you pay.
Changes in land valuations
Land valuations fluctuate with the state of the property market. If you are an existing land tax customer, your most current land tax assessment may have increased compared to your previous year’s assessment.
Under legislation, land tax is calculated using the previous year’s valuations. This means property valuations on your 2023 land tax assessment were determined by the Valuer-General as at 1 January 2022.
At this time, the mean house price in Victoria had risen by approximately 21% (when compared to the 1 January 2021 valuation).
Capital improved value and vacant residential land tax
Unlike land tax, vacant residential land tax is calculated using the capital improved value of a property, which is the value of the land plus the buildings on it and any other capital improvements. Capital improved value is also determined as part of the annual statewide general valuation process. Councils also use this value to calculate the rates you pay on your property.
Your council rates notice will display both your property’s site value and capital improved value.
On your vacant residential land tax assessment, capital improved value is referred to as taxable value. We calculate vacant residential land tax by applying the tax rate of 1% to the capital improved value of your vacant property.
Capital improved value and windfall gains tax
Similarly to vacant residential land tax, windfall gains tax is calculated using the capital improved value of your land.
Following a rezoning, we will request a supplementary valuation from the Valuer-General Victoria, which will assess the value of the land as if the new zone applied at the time of the last general valuation. This supplementary valuation (CIV2) will be compared to the valuation in force immediately before the rezoning (usually the last general valuation) (CIV1). The value uplift is the difference between the 2.
The amount of the value uplift will determine if windfall gains tax is applicable and at what rate it will apply.
As the same valuation date is used for CIV1 and CIV2, this valuation process only captures the immediate value uplift from a rezoning decision. It does not capture any market movements in the value of the land, or changes to the land post the valuation date.
Disagreeing with your valuations
If you disagree with either the site value (for land tax purposes), the capital improved value (for vacant residential land tax purposes) or the CIV1 or CIV2 (for windfall gains tax purposes) on your assessment or on your council rate notice you can object.
It is important to note that you cannot object to the value solely on the basis of an increase in your tax liability.
Objecting to the values set out on your assessment is a different process to objecting to those set out in your council rate notice:
- council rate notice – lodge your objection with the council that issued you the rate notice
- land tax, vacant residential land tax or windfall gains tax assessment – lodge your objection with the State Revenue Office.
If you are objecting to anything other than the site or capital improved value, refer to our changes and objections information.
Sometimes we use valuations made by the Valuer-General on behalf of the Commissioner of State Revenue. These are called Commissioner’s valuations and if your assessment is based on this valuation, we consult with the Valuer-General before making a decision on your objection. Your objection will be determined by the Commissioner under the Taxation Administration Act 1997.
Read more on changes and objections to your assessment, including objecting to valuations.
Paying your assessment while you object
You should pay your land tax or vacant residential land tax in accordance with your assessment while you are waiting for a decision.
You should pay or defer your windfall gains tax in accordance with your assessment while you are waiting for a decision.
If you do not pay, interest will accrue on the outstanding amount. If your objection is allowed or partially allowed, you will be refunded any overpayment with interest.
|If you want to object to the valuations on your:||Council rates notice - site value or capital improved value||State Revenue Office assessment notice - land tax (site value), vacant residential land tax (capital improved value) or windfall gains tax (CIV1 or CIV2)|
|Who should I object to?||The relevant council.||The State Revenue Office.|
|When must I object by?||Within 2 months of receiving your rates notice.||Within 2 months of receiving your assessment notice.|
|How do I object?||Complete the appropriate council valuation objection form.||Complete and lodge a Land Valuation Objection Form online.|
|What happens next?||Check with the council as this is a matter between you and them.||
We acknowledge receipt of your objection in writing and explain the next steps.
If the site value or capital improved value of the land is based on an annual general valuation, we forward your objection to the Valuer-General of Victoria for consideration.
If the site value or capital improved value of the land is based on a Commissioner’s valuation, we consult with the Valuer-General before making a decision on your objection.
|How long will it take for a decision?||
A council has 4 months from receiving your objection to make a decision. If it is not made within this time, the council is deemed to have disallowed the objection. You can then apply to the Victorian Civil and Administrative Tribunal (VCAT) for a review or apply to refer the matter to the Supreme Court if the VCAT president is satisfied the matter raises questions of unusual difficulty or general importance.
If the site value or capital improved value of the land is based on an annual general valuation, we forward your objection to the Valuer-General of Victoria, which has 4 months from receiving the objection to make a decision (see more information in the column to the left).
If you are objecting to a Commissioner’s valuation, we have 90 days from the date of receiving your objection to make a decision. If it is not made in this time, you can request that we refer the matter to VCAT or treat the objection as an appeal to the Supreme Court of Victoria.
|Can a council or the Commissioner make a determination after those time frames?||Yes||Yes|
|What can result from my objection?||It can be allowed in full, in part, or disallowed.||
It can be allowed in full, in part, disallowed or deemed invalid.
If the site or capital improved value of the land is reduced by the valuation authority’s valuer, we will amend your tax assessment and refund any overpaid tax, including the appropriate interest amounts payable under the Tax Administration Act 1997.
|How will I find out the result of my objection?||The council will let you know in writing.||
The Valuer-General of Victoria’s valuer will advise you in writing of their decision.
If the valuer recommends to the Valuer-General to adjust the site value of the land, the Valuer-General will notify both you and us, in writing, of the decision.
If the Valuer-General does not confirm the recommendation within 2 months of receiving it from the Valuer-General’s valuer, the Valuer-General is deemed to have disallowed the recommended adjustment.