It is the time of the year again. The Victorian State Revenue Office (SRO) is currently issuing land tax assessments for the 2019 land tax year. With a notable softening of the Victorian property market, many expected that this year’s assessments would show little, if any, increase in the site value of land (which is the basis for assessments). However, we are seeing quite the opposite with many taxpayers being shocked at significant increases in Victorian land tax assessments.

If you have received a higher than anticipated Victorian land tax assessment, then in this article we explore why this may have occurred and your options to address this.

Why has my land tax liability increased this year?

The taxable (site) value of land can increase as a result of the acquisition of additional property, the removal of an exemption that applied to the land or the value of the land increasing. There has been a notable increase in valuations of land (which flows on to your land tax assessments and council rates).

In 2017 the Andrews Labor Government announced “fairer and more consistent” valuations would, from 2019, be conducted annually by the Valuer-General instead of by local councils which have historically undertook the process every second year. The identified value of your land as at 1 January 2018 is reflected in your 2019 land tax assessment.

Can I object to my land tax assessment?

Yes, land tax assessments can be objected to on a number of reasons. This includes:

Site or capital improved valuation. We discuss this in more detail below.
Factor changes, for example removing land that you do not own or adding land you do own.
Legal basis for the assessment, for example if you believe you qualify for one of the exemptions from land tax (such as the principal place of residence and primary production exemptions).

You have 60 days from receiving your land tax assessments to lodge an objection. If you’re outside of the 60-day time-frame, you can make an application for an out of time objection (although the SRO is not bound to accept it).

If your land tax assessment contains any incorrect data (e.g. wrong lands included, exemptions that have not been applied) you should seek legal advice.

Should I object to the land site values?

If you would like to object to the land site values contained in your 2019 land tax assessments you will need to consider whether the values identified are reasonable. Some initial factors to consider may include:

Seeking an independent market valuations or appraisal for the unimproved land as at 1 January 2018.
Considering historical council rates notices to compare the Capital Improved Value (CIV) and Site Values of your land as at 1 January 2018 (the valuation date for your 2019 assessment) and 1 January 2017 and seeing if the change in values is in line with the market movements. The Victorian Valuer-General’s website has resources, including a list of median house prices by suburb from 2007 to 2018.
Comparing the sale price of similar properties in your local market that have been sold on or about 1 January 2018 and comparing this to the CIV and underlying Site Value identified for your land. An example of a free resource for this is www.oldlistings.com.au.

How we can help

The process of objecting to your land tax assessment and/or land site values can be confusing and convoluted.

Our team will help you understand your land tax assessments in assessing whether it is correct, if you qualify for any exemptions and to understand what you need to lodge an valuation objection. We can assist with managing a stressful objection process by:

Applying our experience in assisting clients with large and complicated land holdings to provide you with specific advice to your matter.
Preparing objection(s) and identifying the supporting documentation you should provide.
Managing correspondence required with multiple government bodies (Valuer-General, Council and Victorian State Revenue Office).

If your objection to a land tax assessment, including to the land site value (unimproved value) is successful, this should result in a lower land tax bill.

If you would like to discuss you land tax or any other state tax issue, please contact our specialist team:

Denise Tan
Senior Associate
Sladen Legal
T +61 3 9611 0160 | M +61 438 714 965
Level 5, 707 Collins Street, Melbourne, 3008 Victoria, Australia
E: dtan@sladen.com.au

Laura Spencer
Senior Associate
Sladen Legal
T +61 3 9611 0110
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
lspencer@sladen.com.au

Phil Broderick
Principal
Sladen Legal
T +61 3 9611 0163 l M +61 419 512 801
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: pbroderick@sladen.com.au