New Tax Alert in VICTORIA

On the 12th of October 2021, the Victorian Treasurer, Mr Tim Pallas, announced that the proposed windfall gains tax (WGT) legislation would be introduced into the Victorian parliament. The proposed start date will be on 1st of July 2023.

Proposed transitional arrangements will apply to certain contracts, option arrangements and proponent-led rezoning underway when the Windfall Gains tax was originally announced on 15th of May 2021 as part of the 2021-22 Victorian Budget.

The Windfall Gains Tax and State Taxation and Other Acts Further Amendment Bill 2021 (proposed to be renamed to the Windfall Gains Tax Act 2021 once enacted)

It is proposed that a new windfall gains tax will be applied to land rezoned by a planning scheme decision made on or after 1 July 2023 where the decision results in an increase in the value of the land by $100,000 or more. The effective rate of tax will be up to 50% of the value uplift.

The proposed rate of WGT

The proposed rate of WGT is set out in the below table:

Item

Taxable Value Uplift

Rate of WGT

1

Not more than $100,000 Nil

2

More than $100,00 but less than $500,000 62.5% of that part of the taxable value uplift that exceeds $100,000

3

$500,000 or more

50% of the taxable value uplift

Grouping and aggregation provisions will apply so that the $100,000 threshold applies only once to properties owned by the same owner or group of owners and rezoned under the same planning scheme amendment.

Menu