Land Tax no longer adjustable
The proposed amendments to the Sale of Land Act 1962, Property Law Act 1958
and Windfall Gains Tax Act 2021 prohibit settlement adjustments for land tax or
an existing WGT liability between a vendor and purchaser in all contracts for the
sale of land in Victoria from 1 January 2024.
Currently, contracts for the sale of land typically provide that the land tax liability
in relation to the year of sale apportioned to the period up to, and including the
day of settlement, are to be paid by the vendor, and the land tax for the
remainder of the year is to be paid by the purchaser as an adjustment to the
purchase price.
Vacant residential vacant land tax
In Victoria, a vacant residential land tax of 1% of the capital improved value is
applied to residential properties that have been vacant for an aggregate of six
months or more in the previous calendar year (some exemptions apply). To date
this tax has only been applied to 16 inner and middle Melbourne council areas.
Changes are proposed in two key areas:
Vacant residential land tax will be expanded from the current inner and
middle Melbourne council areas to all vacant residential land throughout
Victoria. These changes will take effect from 1 January 2025 (that is, the
2025 land tax year) but the period to determine a developed property’s
vacancy will generally start on 1 January 2024.
Want to know more? Please call.