LTX-02-20
Frequently asked questions
Annual land tax assessments are issued to owners of taxable land in Victoria, as at midnight on 31 December of the year preceding assessment.
Assessments are based on information from the land titles register, local governments and land owners themselves. However, sometimes this information is outdated or inaccurate and, as a result, you may be assessed for an incorrect amount of land tax.
You are obliged under the Land Tax Act 2005 to ensure your assessment is correct. If you do not notify us of any of the following circumstances within the specified timeframes, a notification default occurs and penalty tax may apply.
Errors or omissions
You must notify us of errors or omissions in your assessment within 60 days of the assessment being issued, especially if:
- land you own or jointly own in Victoria is not listed
- land you own is incorrectly identified as exempt.
Land held on trust
If you are a trustee of land, you must notify us within one month of:
- acquiring or disposing of land
- the trust becoming a different category of trust
- changes to the beneficial interests of land held under a fixed trust or to the unit holdings of a unit trust
- the completion of administration of a deceased estate for which you hold land on trust
- a nominated beneficiary of a unit or discretionary trust ceasing to use trust land as their principal place of residence.
Absentee owner
If you are an absentee owner of land at 31 December, you must notify us before 15 January of the following year as the absentee owner surcharge may apply.
Vacant residential land
If you own residential land within inner and middle Melbourne which has been unoccupied for a total of more than six months in a calendar year, you must notify us before 15 January of the following year as the vacant residential land tax may apply.
Why is penalty tax applied?
Penalty tax is a financial penalty applied for not meeting tax obligations. It is designed to encourage people to comply with all aspects of tax laws, including notifying us promptly about factors affecting their liabilities.
What is the standard rate of penalty tax?
The standard rate of penalty tax applied is 25% of the additional amount of tax that would have been assessed had you notified us within the specified timeframe.
When does a higher rate of penalty tax apply?
A penalty tax rate of up to 90% may apply in situations where you have intentionally disregarded your land tax obligations and/or have concealed information during an investigation by the State Revenue Office.
When does a lower rate of penalty tax apply?
The penalty tax rate may be reduced to:
- 5% if you voluntarily notify us after the specified timeframe but before we start investigating you, or
- 20% if you notify us after we start investigating you.
Penalty tax will not apply if you have notified us within the specified timeframes, or if we believe you have taken reasonable care to notify us, or if circumstances beyond your control have caused the notification default.
Can I object to penalty tax?
If you believe you should not have been charged penalty tax or the amount should have been lower, you have the right to lodge an objection.
You must lodge an objection within 60 days of the date of service of the notice of assessment, stating your reasons in detail and providing relevant supporting documents. Where the 60 days have passed, you must provide reasons why your objection is late along with supporting documents.
If your situation falls into one of the categories below, it is unlikely your objection will be successful:
- If you made a voluntary disclosure before or during an investigation, or if your notification failure was due to an oversight rather than a deliberate attempt to avoid land tax, and your penalty tax rate has already been reduced to reflect this.
- If you have paid a previous land tax liability by its due date or have co-operated during the course of the investigation.
- If you did not know that you had an obligation to notify us, or were not told this by your accountant or adviser. This is because your land tax assessment clearly states your notification obligations and you are generally responsible for the actions of the representative you have authorised to act on your behalf in the conduct of your tax affairs.
Even if you have lodged an objection, you must pay your liability in full by the due date or you may be charged late payment interest. If your objection is successful, we will refund any amount overpaid with interest.
What if I can’t pay the full amount by the due date?
If you will be unable to pay the full amount on your assessment by its due date, you can organise for the liability to be paid by instalments using our AutoPay service before the due date has passed. Interest does not apply to instalments set up within AutoPay.
If you have not set up an instalment plan using AutoPay and were unable to pay the full amount by its due date, you can apply for a payment plan. This can only be done once the due date for the assessment has passed. Interest may be charged on payment plans.
Revenue Ruling — interest and penalty tax
Read our comprehensive ruling on penalty tax and interest.
