The site value of your land is used to calculate land tax.
The capital improved value of your land is used to calculate vacant residential land tax.
Site value and land tax
Site value is the unimproved value of your land, which means it excludes capital improvements such as buildings. Site value is determined as part of the annual statewide general valuation process by the Valuer-General Victoria.
We are not involved in the site valuation process, but we use the valuations to calculate land tax. From the 2020 land tax year, valuations are made annually as at 1 January of the previous calendar year.
Therefore, 2021 land tax assessments were based on valuations made on 1 January 2020 while 2022 land tax assessments are based on the valuations made on 1 January 2021.
On your land tax assessment, site value is referred to as taxable value. You can find the total taxable value of your land on the right hand side of your Statement of Lands, which accompanies your assessment.
How site value affects land tax
Land tax is assessed on the total value of your taxable land. It also uses tax rates that progressively increase as land values rise.
If the site value of any of your land increases, a higher tax rate may apply, increasing your land tax bill.
In some cases, the percentage increase in your land tax bill will be higher than the percentage increase of your total taxable land value.
Changes in land valuations
Land valuations change for a number of reasons. If you are an existing land tax customer, your most current land tax assessment may have increased compared to your previous year assessment. This could be because your land’s site value has increased. If the value of your land has increased significantly, there may be a significant increase in land tax.
If you have received a land tax assessment for the first time, it may be because your taxable land's site value has increased past the $300,000 land tax threshold ($25,000 for trusts) for the first time.
Remember, your 2022 land tax assessment uses the value of your land at 1 January 2021 and reflects the market conditions as at that date.
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 rate 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.
Disagreeing with site or capital improved values
If you disagree with either the site value (for land tax purposes) or the capital improved value (for vacant residential land tax purposes) on your assessment or on your council rate notice you can object.
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 or vacant residential land 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.
If you do not pay, interest continues to 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 rate notice - site value or capital improved value||State Revenue Office assessment notice - land tax (site value) or vacant residential land tax (capital improved value)|
|Who should I object to?||The relevant council.||The State Revenue Office.|
|When must I object by?||Within two months of receiving your rate notice.||Within two 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 a council valuation, we forward your objection to that council.
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 four 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 a council valuation, we forward your objection to that council, which has four months from receiving the objection to make a decision (see more information in the column to the left).
If you are objection 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 Valuer-General, 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.||
If the valuation was carried out by a council, they will advise you in writing of their decision.
If the council 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 two months of receiving it from the council, the Valuer-General is deemed to have disallowed the recommended adjustment.