C&G's Guide to Understanding Land Tax

Tips & Advice

Land Tax is the amount of tax that must be paid to your relevant State and Territory Government. This amount can be calculated either annually or quarterly depending on which state you’re in and is based on the value of the land that you own. This includes both vacant land and land where a property has been built. In this C&G Blog, we break down the Land Tax essentials that all Australian homeowners need to know.

How Is Land Tax Calculated?

In Victoria, your land tax is calculated by the State Revenue Office. They will apply the appropriate tax rate to the total taxable landholding. This does not include your primary residence. Land tax is assessed on the total value of your taxable land. It also uses tax rates that progressively increase as land values rise.

Is Land Tax Tax-Deductible?

No matter what state you live in, your land tax is deductible from the ATO, however, it can only be deducted from land with a property dwelling. There is a land tax registration form available from the ATO. Once this has been completed you will be issued an assessment notice which determines the land tax that you owe on your property. In Victoria, you can register for a My Land Tax account through the State Revenue Office, which will allow you to view and pay assessments, update property ownership information, apply for land tax exemptions, and update your contact information. You can set up your account here.

Do I have to pay Land Tax?

In Victoria, if your home is the only property you own you will not have to pay land tax because your home is exempt. This means that land tax is predominantly a concern for property investors. Land Tax applies to rental and investment properties, commercial properties, factories, holiday homes, and vacant land.

Does everyone have to pay the same amount?

In Victoria, Land Tax is calculated at the end of the calendar year based on the total value of the taxable land above the threshold, which operates on a sliding scale (as seen below.)  Note: homeowners whose land is held by a trust will need to pay additional premiums and surcharges, as will absentee owners.

●     $250,000 to less than $600,000; $275, + 0.2% of land value above $250,000

●     $600,000 to less than $1m; $926, + 0.575% of land value above $600,000

●     $1m to less than $1.8m; $2938, + 0.875% of land value above $1m

●     $1.8m to less than $3m; $15,838, + 0.7614% of land value above $1.8m

●     $3m-plus; $24,975, + 2.25% of land value above $3m