Understanding Land Tax
You may need to pay land tax if you own an investment property, holiday home, commercial property or vacant land in addition to your primary home.
How does land tax work?
Land tax is a state revenue. In Victoria, you pay land tax if the total taxable value of all the Victorian land you own, individually or jointly, as at 31st December is equal to or exceeds $50,000 ($25,000 for trusts).
Exempt land is not included in the total taxable value of land you own. The rate of tax you pay depends on the total taxable value of all your taxable land.
You may have to pay land tax if you own, either individually or with others, any of the following in Victoria:
- Investment properties, including residential rental properties
- Commercial properties such as retail shops, office premises and factories.
- Holiday homes
- Vacant land
The absentee owner surcharge is an additional amount payable over the general and trust surcharge rates of land tax. From the 2024 land tax year a 4% absentee owner surcharge (previously 2% from 2020-2023 land tax year, 1.5% from 2017-2019 land tax year and 0.5% for the 2016 land tax year) on land tax applies to Victorian land owned by an absentee owner.
From 1 January 2025, vacant residential land tax will be expanded to apply to all vacant residential properties in Victoria. Properties which are exempt from land tax are not liable for vacant residential land tax. However, a property which is exempt from vacant residential land tax may be liable for land tax. Land tax and vacant residential land tax are different. You may receive an assessment for both.
What Land is Exempt?
Land tax does not apply to exempt land, such as: your home, known as your principal place of residence (PPR) your farm, known as primary production land (PPL) rooming houses and charitable institutions.
How is it calculated?
Your 2025 land tax is calculated on the site value of all taxable land you owned on 31 December 2024. The State Revenue Office (SRO) use the site values prepared by the valuation authority for councils in 2024 to calculate your 2025 land tax. Land tax assessments are generally issued between January and June each year.
Manage your Land Tax
Manage your land tax information quickly and easily via the My Land Tax website. There, you can:
- view and pay assessments
- apply for exemptions
- update property ownership
Is it Claimable?
If you paid Land tax that relates to your property being rented or genuinely available for rent, you can include this under your rental expenses on your return.
For any further assistance on calculating your claimable deductions, or if you have questions about the financial elements of your investment property, please don’t hesitate to contact us – just one conversation may change your financial future.
