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Land tax – are you overpaying?

03 March 2020

#Property & Real Estate, #Dispute Resolution & Litigation

Land tax – are you overpaying?

Between now and May 2020, the State Revenue Office (SRO) Victoria will send close to 510,000 land tax assessment notices to customers.

If you consider that the valuation placed on your property is too high, you must lodge an objection within 60 days of receiving your land tax assessment notice

Even relatively small variations in valuations can result in large savings to landlords in relation to land tax and council rates.  Therefore, it is important to seek advice on the prospects of objecting to a valuation placed on a property within the time limits to ensure landlords are not paying too much.

Background

As at 1 January 2019, Victoria's 3.1 million rateable and leviable properties, including residential, industrial, commercial and rural properties were valued at $2.29 trillion. This compares with $2.30 trillion in 2018 and $1.85 trillion in 2016.

From 1 July 2018 land valuations were centralised under Valuer-General Victoria (VGV), with a new annual cycle of valuations for land tax, the Fire Services Property Levy and council rates setting purposes. As a result of re-valuations in 2018 there was a substantial increase in the land tax revenue collected by the SRO for the 2018/2019 financial year, which showed an increase in land tax revenue of 37 per cent from the previous financial year.  

Higher land values will of course lead to higher land tax, however given recent fluctuations in the property market, and considering that the total value of Victoria’s rateable and leviable properties actually dropped in 2019 from the previous year, owners should consider how their property is being valued in the current climate and whether they could be paying too much land tax.

How do I object?

If you do not agree to the valuation placed on your property, you must lodge an objection within 60 days of receiving your land tax assessment notice

You must lodge your objection with the correct rating authority. If you disagree with the value of your property as listed on your council rate notice, you must object to your local council. Objections to the valuation given on your land tax assessment notice are to be lodged with the SRO. 

If your land tax is due for payment in full or by instalment while you are awaiting a decision on your valuation objection, you must still pay the amount set out in your assessment. If you do not pay your assessment by the due date, interest may accrue daily on any outstanding amount. If you are successful in your objection and your property valuation is changed, you will be given a refund.

Are there exemptions from land tax?

There are various exemptions for your principal place of residence, primary production land and charities. Also if you have been impacted by the recent 2019/2020 bushfires, the SRO has placed a hold on land tax assessments for impacted postcodes.

If your property is destroyed or substantially damaged by the bushfires, you will receive relief in your 2020 land tax assessment for these properties. In certain circumstances, land tax will also be reduced on properties used to provide free accommodation for people who need it.

Authors: Chris Brodrick & Kristin Watkins

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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Chris Brodrick

Chris Brodrick

Partner

Melbourne

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Kristin Watkins

Kristin Watkins

Special Counsel

Melbourne

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Gerard Timbs

Gerard Timbs

Partner

Brisbane

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