Victoria taxes land from $50,000 of site value, the lowest threshold in the country, and the COVID levy settings run to 2033. The rate table is fixed. What is open is which exemptions apply, what the vacant residential and absentee surcharges catch, and how the settlement date changes the bill.
Most Victorian land tax content explains the rate table. The State Revenue Office already does that better than anyone. This covers the parts they do not: what is exempt, what the surcharges catch, and the one variable you can actually move.
If an assessment has just arrived and the number is larger than you expected, the cause is almost certainly the threshold rather than the rate. Victoria now taxes land from $50,000 of site value. Before 2024 the figure was $300,000. Nothing about your property changed. The line moved, and tens of thousands of ordinary owners crossed it without doing anything.
Land tax is assessed on site value, not on what the property is worth. Site value is the land on its own, with no house on it. A $1.2 million house in Bentleigh might carry a site value near $700,000, and the tax is calculated on the second number.
Everything you own in Victoria is aggregated and assessed together, based on what you held at midnight on 31 December.
| Aggregated site value | Land tax payable |
|---|---|
| Under $50,000 | Nil |
| $50,000 to $100,000 | $500 |
| $100,000 to $300,000 | $975 |
| $300,000 to $600,000 | $1,350 plus 0.30% above $300,000 |
| $600,000 to $1,000,000 | $2,250 plus 0.60% above $600,000 |
| $1,000,000 to $1,800,000 | $4,650 plus 0.90% above $1,000,000 |
| $1,800,000 to $3,000,000 | $11,850 plus 1.65% above $1,800,000 |
| $3,000,000 and above | $31,650 plus 2.65% above $3,000,000 |
Those figures already include the COVID levy. There is no separate line to add.
At $50,000, Victoria has the lowest land tax threshold in the country. New South Wales sits above $1 million. A modest block in a middle suburb clears the Victorian threshold without effort, which is why an investment property that cost nothing to hold five years ago now generates a four-figure bill.
The 2023-24 State Budget introduced the COVID Debt Repayment Plan. From the 2024 land tax year it cut the general threshold from $300,000 to $50,000, added flat charges of $500 and $975 at the lower brackets, and lifted marginal rates by 0.10 percentage points above $300,000. Treasury expected it to raise about $5.65 billion over four years, roughly a fifth of all land tax revenue.
It is legislated to run until 30 June 2033.
The 2026-27 State Budget, handed down on 5 May 2026, changed nothing. Rates, thresholds and surcharges all continue as they are.
Your bill can still move, though, because new Valuer-General valuations apply each year. A rising site value raises the assessment with no policy change at all. That is the part most owners miss when they compare one year to the next and assume something must have been altered.
Your principal place of residence is exempt in most cases, and the exemption can extend to adjoining land in some circumstances. Primary production land is exempt where it genuinely qualifies.
Several exemptions were widened from 1 January 2026, including a new partial principal place of residence rule and longer protections for owners who are temporarily absent. If you moved out, took a posting overseas, or part-let a property you live in, the position may have improved and it is worth checking rather than assuming.
One warning sits behind all of this. The State Revenue Office has published a 2026 compliance program aimed squarely at incorrect principal place of residence and primary production claims, alongside trust holdings. Claiming an exemption you are not clearly entitled to has moved from unlikely to be noticed to reasonably likely to be examined.
This is the one that produces the shocking bills, and it now applies state-wide after the 2025 expansion.
It applies to residential land left vacant for more than six months in a calendar year. The critical difference is the base: it is calculated on capital improved value, meaning land plus building, not site value. On the same property it is a far bigger number than ordinary land tax. It starts at 1 per cent and escalates for consecutive years of vacancy.
The holiday home exemption continues, but it has conditions, and a property sitting empty between tenants or through a renovation is not automatically covered.
Four per cent, applied from the first dollar with no threshold at all. If you live overseas, this dwarfs the base assessment.
The trust threshold is $25,000, half the general figure, and the rates are higher. Moving a title into a trust for asset protection is a decision with an annual cost attached, and that cost is frequently larger than the protection is worth on a single residential property. Run the numbers before the transfer, not after.
Everything follows from a single date: midnight on 31 December.
Settle a purchase in December and you can receive a full year's assessment on a property you have owned for a fortnight. Settle in January and the liability for that year sits with the vendor. On a site value of $600,000 that is roughly $2,250 for the sake of moving a settlement date by a few weeks. It is the cheapest saving available in a Victorian purchase and almost nobody negotiates for it.
There is a second point worth knowing. For contracts below an indexed threshold, set at $10.7 million for the 2026 calendar year, land tax cannot be adjusted between vendor and purchaser at settlement. On an ordinary residential purchase the vendor carries it, full stop. If anyone suggests otherwise in a negotiation, they are wrong, and it is worth saying so.
If an assessment looks incorrect, you generally have 60 days to object. Check the site value line on the notice against your rates notice before you pay.
Aggregation is where portfolios get caught. The State Revenue Office sees one owner across your entities, so land held personally, through a company and through a trust is added together. A single extra car park title has tipped plenty of investors into a higher bracket.
The more important shift is not in the rates at all.
Until now, a Victorian land tax bill on an investment property was partly cushioned. It formed part of the holding costs that reduced your taxable income. From 1 July 2027, on established property bought after 7:30pm on 12 May 2026, those losses can no longer be applied against salary. The land tax rate has not moved. What it actually costs you has gone up.
That interaction is set out in more detail in what the negative gearing changes mean for Melbourne investors, and the wider picture of holding costs sits in the Melbourne property investment guide. If you are weighing a purchase, stamp duty and land tax should be modelled together rather than one at a time, because the two of them decide whether a deal works far more often than the purchase price does. That modelling is a standard part of how investor purchases get assessed before an offer goes in.
It starts at $500 for aggregated site values between $50,000 and $100,000, and $975 up to $300,000. Above that it becomes marginal, running from $1,350 plus 0.30 per cent to $31,650 plus 2.65 per cent at the top bracket. Your principal place of residence is generally exempt.
$50,000 of aggregated site value for individuals, $25,000 for land held in trust. Both are the lowest in Australia. The general threshold was $300,000 until the 2024 land tax year.
Assessments are based on land held at midnight on 31 December and generally issue from late January, with the first payment falling due shortly after. Instalment options are available. Objections are generally due within 60 days of the assessment.
In most cases yes, provided you use and occupy it as your main home. The exemption can extend to adjoining land in some circumstances, and a partial exemption rule was introduced from 1 January 2026. The State Revenue Office is actively auditing this exemption in 2026.
A separate tax on residential land left vacant for more than six months in a calendar year, now applying state-wide. It is assessed on capital improved value rather than site value, which makes it substantially larger than ordinary land tax on the same property, and it escalates for consecutive years of vacancy.
No. It is legislated to apply until 30 June 2033, and the 2026-27 State Budget confirmed no changes to rates, thresholds or surcharges.
Not on an ordinary residential purchase. For contracts below an indexed threshold, $10.7 million for the 2026 calendar year, land tax cannot be adjusted between vendor and purchaser.
The rate table is fixed until 2033 and there is nothing to be done about it. The site value, the exemptions and the settlement date are all open, and together they are usually worth more than the rate itself.
If you are about to sign on something and want the land tax position modelled before you do, send me the address and the site value.
This is general information, not tax or financial advice. Land tax depends on your total holdings, your entities and your circumstances. Check current rates with the State Revenue Office and speak to your accountant before acting.
If you’d like to talk it through, we can map out the next steps.
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