The Victorian State Revenue Office (SRO) has begun issuing land tax assessments for the 2021 land tax year.

Landowners are encouraged to carefully scrutinise and review their assessment notices on receipt, having regard to the appropriateness of their properties’ values and any potential errors in the assessment notice.

Property values are expected to remain fairly consistent to those in 2020, given valuations utilised are conducted as at 1 January 2020 – before the COVID-19 pandemic hit and the material impact of the pandemic was felt by landlords.

However, with a raft of State Government incentives introduced last year as a means to mitigate the devasting effects of the COVID-19 pandemic, landowners who have provided rent relief to their tenants in 2021 (or who do so prior to 28 March) should ensure they enjoy the full benefit of the 25% reduction and payment deferral (which also captures any outstanding 2020 liability).

Taxpayers have a statutory obligation to draw errors to the SRO’s attention, with penalties applying for failing to do so where the land tax is under assessed as a result.  More usual though in our experience is spotting errors made by the SRO that lead to an over assessment of land tax, warranting an objection (and in many cases, sizeable reductions in the assessed tax, or refunds for errors that have flowed through from prior years).

The objection window is tight – being within 60 days of receipt of the assessment – thus swift review is recommended.

Common errors or other issues to look out for include:

  • exemptions being incorrectly applied or overlooked, including landlords who have a charity occupying their building being unaware this generally entitles them to a land tax exemption;
  • land incorrectly appearing on a taxpayer’s assessment, that was sold prior to 31 December or is not otherwise owned by the taxpayer in the noted capacity;
  • taxable values in the assessment not aligning to corresponding valuation notices (leading in most cases to an overassessment of tax);
  • a taxpayer not being assessed as trustee despite holding certain land on trust;
  • COVID-19 relief having not been correctly applied; and
  • nominations of beneficiaries as the notional owner of trust property no longer being financially prudent.

Macpherson Kelley’s Tax and Not-for-Profit teams have in-depth State taxes expertise and assist land owning clients by undertaking an annual legal review of their land tax assessments to identify errors and available savings in land tax. We also work with a number of valuers to ensure clients’ land valuation reviews are managed effectively.

We have recently had success obtaining significant refunds for private landowners who lease premises to a charity (such as a Red Cross Blood Bank or a Salvation Army opportunity shop), on the basis that the tenant used the property solely for charitable purposes and falls under the charitable occupancy exemption.

In many cases, our reviews achieve sizeable savings and refunds for clients (both in current and prior land tax years) and create land tax savings for future years, or otherwise ensure clients are avoiding future land tax reassessment surprises (with penalties and interest).