The alert explains Victoria’s newly introduced Windfall Gains Tax (WGT), which applies to most land rezoned after 1 July 2023. Liability arises when a rezoning creates a value uplift exceeding $100,000, after allowable deductions. The tax is payable by the landowner (or joint owners/trustees) and is a first‑ranking charge on the land until settled. Key features include: - Exemptions for residential land up to two hectares with a dwelling, charitable land used for charitable purposes, and certain rezoning types (technical errors, intra‑zone changes, Urban Growth Zone, public land, Treasury‑declared rezones). - Transition concessions for contracts or options entered before 15 May 2021, provided terms are unchanged and transfer has not occurred before the WGT event. - Deferral of payment for up to 30 years, subject to interest tied to the 10‑year Australian government bond yield, and ending upon certain dutiable transactions or acquisitions. - A strict 60‑day deadline to object to an assessment notice. - Calculation methodology based on the difference between pre‑rezoning and post‑rezoning valuations, with aggregation across multiple properties. - Rate structure: 0 % for uplift ≤ $100,000; 62.5 % on the amount above $100,000 up to $499,999; 50 % on uplift ≥ $500,000. - Practical risk‑management steps for solicitors and conveyancers: update checklists and precedents, advise clients early, consider special conditions to shift WGT costs, and provide staff training.
Topics
Introduction to Victoria’s New Windfall Gains Tax (WGT) and Its Scope
Overview of the legislation, commencement date (1 July 2023), and the broad application to land rezoned after that date.
Mechanics of the Tax: Value Uplift, Deductions, and Thresholds
How liability is measured using the difference between post‑rezoning and pre‑rezoning values, the role of allowable deductions, and the $100,000 taxable uplift threshold.
Exemptions for Residential Land and Charitable Use
Specific criteria for residential land exemption (up to 2 ha, dwelling or permit, sole residential land) and charity waiver provisions.
Specific Rezoning Types Exempt from WGT
List of rezoning categories that are excluded, such as technical error corrections, intra‑zone schedule changes, Urban Growth Zone with infrastructure contribution, first post‑2023 growth‑area rezoning, public land, and Treasury‑declared rezones.
Transition Concessions for Pre‑May 2021 Contracts and Options
Conditions under which land subject to contracts or options entered before 15 May 2021 may avoid WGT, including unchanged terms and timing of transfer.
Who Bears Liability: Owners, Joint Owners, and Trustees
Clarifies that the landowner is liable, with joint owners treated as a single owner and trustees of trusts also liable.