Who pays land tax in Victoria?
In Victoria, Australia, the person who owns the land is responsible for paying land tax. This tax is assessed annually on the total value of all taxable land that a person owns as of December 31st of each year.
There are certain exemptions and concessions available for certain types of property or land usage, such as primary residences or land used for certain types of farming or business.
How is land tax calculated in Victoria?
In Victoria, land tax is calculated based on the total taxable value of all the land that a person owns as of December 31st of each year. The taxable value is determined by the State Revenue Office, which uses the unimproved value of the land as determined by the Valuer-General.
The current land tax rate for the 2021-2022 financial year is 1.4% for land with a taxable value up to $250,000 and 1.6% for land with a taxable value above $250,000.
However, there are certain exemptions and concessions available for certain types of property or land usage, such as primary residences, land used for certain types of farming or business, and land owned by charitable organizations or government bodies.
Additionally, there are also progressive land tax surcharges that apply to foreign owners of residential property in Victoria.
Can property owners seek an exemption from land tax?
Yes, property owners in Victoria may be eligible to seek an exemption from land tax if they meet certain criteria. Some examples of exemptions that may be available include:
- Primary residence: The primary residence of the landowner is generally exempt from land tax.
- Charitable organizations: Land that is owned and used by charitable organizations for charitable purposes may be exempt from land tax.
- Government bodies: Land that is owned and used by government bodies for public purposes may be exempt from land tax.
- Special disability trusts: Land that is owned by a special disability trust for the benefit of a person with a disability may be exempt from land tax.
- Business or farming: Land that is used primarily for business or farming purposes may be eligible for a concession on the land tax.
- Other exemptions may include land used for primary production, land used for certain types of mining, and land that is used as an affordable housing project.
It’s important to note that these exemptions and concessions are subject to change over time and may also have certain conditions that need to be met in order to qualify. Additionally, Property owners can apply for a land tax reduction or concession if they meet certain criteria.
Is land tax in Victoria adjusted at settlement of a property purchase?
Yes, land tax in Victoria is typically adjusted on a single holding basis at the time of settlement when a property is purchased. When a property is sold, the seller is responsible for any land tax that is due up to the date of settlement on a single holding basis. The purchaser is then responsible for any land tax in Victoria that is due after the date of settlement on a single holding basis.
The adjustment for land tax is typically made as part of the settlement process, and the amount of tax that is due is calculated based on the proportion of the year for which the purchaser will be responsible for the land tax.
For example, if a property is sold on July 1st, the purchaser would be responsible for land tax in Victoria for the second half of the financial year, which runs from January 1st to December 31st. The purchaser would pay half of the annual land tax bill for the property, and the seller would pay the other half.
It’s important to note that the adjustment for land tax in Victoria is usually made between the conveyancer or solicitor of the parties involved, and is not handled by the State Revenue Office.
Who is land tax paid to in Victoria?
In Victoria, land tax is paid to the State Revenue Office (SRO), which is a division of the Victoria Department of Treasury and Finance. The SRO is responsible for assessing and collecting land tax from property owners in Victoria. Once the land tax is calculated, SRO sends the land tax notice to the property owner, who then has to pay the land tax by the due date mentioned in the notice.
The land tax can be paid by various ways such as:
- Online through the SRO’s website
- By mail, by sending a cheque or money order to the SRO
- By phone or in person, by credit card or debit card, at a Australia Post office or at the SRO’s office.
It’s important to note that failure to pay land tax by the due date may result in additional charges and penalties, and in some cases, the SRO may take legal action to recover the unpaid taxes.
Need assistance with land tax in Victoria? Contact our team on (03) 8590 8370 to obtain legal advice from our expert property lawyers and conveyancers. We can assist you with your property matters.
This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.