Victoria land tax rates

At Account(able) Accountants, we deal with ATO and related federal tax issues, so don’t know as many details on state government taxes.  However, with recent changes, we have more clients asking about Victorian state taxes and charges, which the main one being land tax charges.

The following is a brief summary of land tax in Victoria:

1. Land tax is calculated on the land only value (not the capital improved value, so the value of the house/building is irrelevant).
2. Which it only applies to the land you own in Victoria, not other states.
3. It’s an annual tax that gets charged by Victorian government, to each individual person.
4. Which your main residence is exempt from it (as well as farmland)
5. Which all properties in your name will be accumulated, and the land tax assessment be on the total land value.
6. Land owned as an individual, the following rates apply from the 2024 year:

1. First $50,000 is exempt
2. $500 payable on total land value between $50k to $100k
3. $975 payable on total land value between $100k to $300k
4. $1,350 payable plus 0.3% on total land value over $300k up to $600k
5. $2,250 payable plus 0.6% on total land value over $600k up to $1M
6. $4,650 payable plus 0.9% on total land value over $1M to $1.8M
7. $11,850 payable plus 1.65% on total land value over $1.8M to $3M
8. $31,650 payable plus 2.65% on total land value over $3M

1. So, it’s a bit like personal income tax rates – where the more you own, the higher the land tax rate is.
2. If it is a Joint ownership of land, you will be sent a joint ownership land tax assessment, that is jointly payable by the owners.  This property is also apportioned on your personal land ownership share and assessed in your own name, which you get a credit for your share of the joint land tax assessment that was paid by the joint owners, so this comes off your land tax payable assessment in your own name (this is not applicable if you don’t own other land in your own name).
3. If ownership is via a Trust, the trust will be sent a trust ownership land tax assessment, that is jointly payable by the trust.  This property then needs to be nominated to a trust beneficiary, so the property is assessed in their personal land ownership share and assessed in their own name, which you get a credit for your share of the joint land tax assessment. So, what the trust pays in land tax, comes off your personal land tax payable assessment in your own name (this is not applicable if you don’t own other land in your own name).

Note that land tax rates are different from state to state.  For example, land tax in Queensland, is only payable when the land value goes over $600k.  And then has incremental increases like Victoria does.  NSW land tax is only $100 for up to $1.075M for land value, and then charges 1.6% on the value over that.

Unfortunately, with Victoria’s recent land tax changes and increased charges, we are hearing of more and more people who are choosing not to be rental property owners in Victoria, which this won’t help the housing crisis and lack of rental properties available to people residing in Victoria (not to mention the flow on effects that less houses are being built, so less work for people).

By Pat Hoey