Death and taxes – one’s really going to hurt

As you will be aware, between February and May each year, the State Revenue Office issues land tax assessments for the calendar year to Victorian land owners (except where all landholding is exempt). The 2019 land tax assessment assesses landholdings owned by a land owner as at midnight on 31 December 2018.

With property prices decreasing you may be surprised to see an increase on your 2019 land tax assessment.

It is important to review your assessment closely to identify any errors, as you have the option to object to your land tax assessment on numerous grounds including if you consider that the site value of the landholdings is too high. The 2019 land tax assessment uses the 1 January 2018 site value of the land. Ordinarily, objections to valuations are undertaken when Council Rate Notices are issued in the prior year. However, for land owners who may have missed the deadline to object to values on time, the good news is that the land tax assessment provides an opportunity to challenge the site value by lodging an objection with the State Revenue Office that is then passed on to the valuation authority.

Objections to land tax assessments must be lodged within 60 days of receipt, and the time limits are enforced strictly.

In our experience, the most common grounds for making an objection to a land tax assessment include:

• Exemptions are missing or are incorrectly identified
• Interests held by various persons have not been correctly apportioned
• Land which has been disposed of by the land owner prior to 31 December in the previous year is still included in the assessment
• Land values or land descriptions do not reflect those in the Council Rate Notice(s)
• Lands that have been valued as a single property are shown broken down in separate occupancies with apportioned values
• The description of the land is not correctly stated in either the valuation or the assessment
• Land held in separate trusts is aggregated in a single assessment

It is important to note that in addition to the right of land owners to object to a land tax assessment, they also have an obligation to notify the Commissioner of errors and omissions, which result in less land tax payable by the land owner. The notification must be made within 60 days, or penalty tax may apply. These circumstances are where:

• The land owner is assessed on one assessment for different lands it owns by itself
• Land is omitted from the assessment
• An exemption is incorrectly applied
• The land tax assessment does not reflect the trust or absentee ownership

Managing your land tax is an important consideration for any land owner, particularly if you are unable to recover land tax from your tenants covered by the Retail Leases Act 2003 (Vic).

Our team at Gadens has plenty of experience with land tax assessments and we would be pleased to assist you with your 2019 assessment.

Please do not hesitate to contact us if you would like to discuss.

Authored by: 

Biljana Apostolova, Partner

Michael Mercier, Associate

Jessica Merola, Lawyer