How does windfall gains tax work?
The windfall gains tax will be administered by the Commissioner of State Revenue and will be payable by the landowners. The Windfall Gains Tax will apply to rezoned land in Victoria after 1 July 2023 with limited exceptions. The windfall gain will be calculated by the difference in the capital improved value of the land prior to the rezoning and after the rezoning has occurred. The capital improved value of the land prior to the rezoning can be found on the most recent land council rates notice. This tax will apply when the value of land has increased above $100,000.00. If the uplift value is above $100,000.00 but less than $500,000.00 the tax will be calculated at a rate of 62.5%. If the uplift value is above $500,000.00 the tax will be calculated at a rate of 50%. This tax will be payable once the rezoning has occurred however can be deferred until the property is sold/transferred or 30 years after the rezoning has occurred, whichever event occurs first. If the landowner chooses to defer payment of the tax, interest will be payable.What land is exempt from this tax?
- Residential land not exceeding two hectares if there is a residential dwelling on the property, this dwelling does not need to be the landowners principal place of residence.
- Land which is included in the Urban Growth Zone, recognising that these properties are already subject to the Growth Areas Infrastructure Contribution area.
- Land which needs to be rezoned due to errors in the Victorian Planning Provisions or planning scheme.
At Phillips & Wilkins, Chris practices in the areas of Property Law, Conveyancing and Family Law. Chris has grown up in the Northern Suburbs and continues to be a part of the local community as being a member of the Old Paradians Amateur Football Club and the Mill Park Cricket Club. Learn more about Chris' legal experience.
