History of Land Tax in Victoria
Land tax is an annual tax based on the total taxable value of all the property you own in Victoria, excluding exempt land such as your home (principal place of residence). Land tax is calculated using the site values (determined by the Valuer-General Victoria) of all taxable land you owned as at midnight on 31 December of the year preceding the year of assessment - refer Land Tax Act 2005.
You may have to pay land tax if you own, either individually or jointly with others:
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investment properties, including residential rental properties
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commercial properties such as retail shops, office premises and factories
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holiday homes
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vacant land
Some of the key impacts of this increasing land tax on small businesses (SMEs) are:
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Increase to cost of business therefore lower profit
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Reduced capacity to employ extra personnel
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Reduction in our ability to compete with local and interstate similar businesses
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Increased stress on business owners trying to cover costs and make a profit
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Reducing property values as they now come with a significant land tax burden attached
See the Land Tax Calculator Table below:
Historical Victorian Land Tax General Rates Calculation
Year | Threshold Value | Land Tax Payable On Threshold Value | % Land Tax Charged On Value Over Threshold | Note |
|---|---|---|---|---|
2025 | $3,000,000 | $31,650 | 2.65% | $26,500 for every $1 million of value over the threshold |
2024 | $3,000,000 | $31,650 | 2.65% | |
2022 | $3,000,000 | $27,975 | 2.55% | $25,500 for every $1 million of value over the threshold |
2020 | $3,000,000 | $24,975 | 2.25% | $22,500 for every $1 million of value over the threshold |
2015 | $3,000,000 | $24,975 | 2.25% | |
2009 | $3,000,000 | $24,975 | 2.25% |
Note:
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Property land values less than $3,000,000 have a separate land tax calculation.
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Industrial land in Victoria is currently ~$1,000 per square m, so three quarters of an acre (~3000 square m) is ~$3,000,000.
Have you noticed that the property threshold value ($3,000,000) in 2025 is the same as it was in 2009?
The former premier and former treasurer have made numerous amendments to the Land Tax Act 2005 over the past 10 years but have allowed the threshold value to remain the same so that this tax calculation has not been indexed to reflect the significant increase in property values over this time. Is this negligent or deliberate?
Property values have risen by at least 150%-200% in the past 16 years so the land tax threshold value should have risen by a similar amount. Further to this, why has the land tax percentage above the threshold increased from 2.25% to 2.65% over this period? This should be indexed down to reflect the increasing value of property over time. All taxes should be indexed against something e.g. CPI, inflation, cost of living or increase in property values. This land tax calculation has not been indexed since 2009 and is a shameless grab for more money from small business owners and property investors who already pay significant taxes to the federal government.
All state politicians should be ashamed to have allowed this tax calculation to go on unchecked for the past 15 years.
I wonder how many times the retirement benefits for Victorian Parliamentarians have been indexed up since 2009?