Land Tax – An Overview

Land Tax – An Overview

Land tax is an annual tax on land ownership in Victoria, assessed at 31 December each year, on the total unimproved value of taxable land that you own in the state, excluding your home.

As from 1 January 2025, the tax-free threshold dropped from $300,000 to $50,000 for properties owned by individuals and $25,000 for properties held in trusts.

Rates are applied on a sliding scale ranging from flat surcharges to 2.65% for high-value land.

Also, a new tax known as the Vacant Residential Land Tax, applicable to any residential property left vacant for more than 6 months in a calendar year, has been introduced which means that almost anyone who owns a second property that is used as a holiday home in Victoria will be subject to land tax.

This tax is assessed annually on the previous year’s occupation of the property, the type of residential land, where it is located and the year in question and is based on a property’s vacancy in the relevant tax year, calculated at 1-3 per cent of the Capital Improved Value of the land. Whilst exemptions exist, each comes with eligibility rules and documentary requirements, so keeping detailed records will be essential.

For further information about the changes or to discuss your circumstances, please contact our office.