Increased land tax rates for high-value landholdings

The land tax rate for taxpayers with larger property holdings will increase from 1 January 2022 by:

  • 25 percentage points for taxable landholdings exceeding $1.8 million
  • 3 percentage points for taxable landholdings exceeding $3 million.

This change will apply to both the general and trust surcharge rates.

Increased tax-free threshold for land tax
1 January 2022 will also see the tax-free threshold for general land tax rates increase from $250,000 to $300,000. This means for land not held on trust, land tax will only be payable where the total taxable value of Victorian land is equal to or greater than $300,000.

Windfall gains tax for high-value landholdings
A tax will also apply to large windfall gains from 1 July 2022 if they are associated with planning decisions to rezone land. It is proposed that the total value uplift from a rezoning decision will be taxed at 50 per cent for windfalls above $500,000, with the tax phasing in from $100,000.

The tax is expected to be payable on rezonings across Victoria except on rezonings to and from the Urban Growth Zone within existing Growth and Infrastructure Contribution areas, and rezonings to Public Land Zones.

Vacant residential land tax exemption for new developments
It was announced that from 1 January 2022, the vacant residential land tax exemption for new developments will be extended to apply for up to two years.

Removal of land tax exemption for private gender-exclusive clubs
Private gender-exclusive clubs will no longer be eligible for the land tax exemption available for societies, clubs or associations, effective from 1 January 2022.