What is the windfall gains tax?

What is the windfall gains tax?

What is the windfall gains tax?

From 1 July 2023, a windfall gains tax applies to land subject to a government rezoning resulting in a value uplift to the land of more than $100,000. In determining the value uplift, all land owned by the person or group and subject to that rezoning is considered.

For a rezoning of land that results in a taxable value uplift:

More than $100,000 but less than $500,000: the tax will apply at a marginal rate of 62.5% on the uplift above $100,000

$500,000 or more: a tax rate of 50% will apply to the total uplift

In determining the value uplift of the land, all land owned by the person or group and subject to that rezoning is considered.

Exemptions and exclusions from the windfall gains tax

There are a few exemptions or exclusions from the windfall gains tax, including:

  • Residential land exemption.
  • Land entitled to a transitional exemption from the windfall gains tax.
  • Land rezoned to or from the Urban Growth Zone within the Growth Areas Infrastructure Contribution (GAIC) area.
  • Charitable and university land.
  • Land rezoned to Public Land Zones.
  • Land rezoned to correct an obvious or technical error in the Victoria Planning Provisions or a planning scheme.
  • Land rezoned to a Rural Zone (other than the Rural Living Zone).

Give us a call to help you understand how this tax will apply and assess your options.

Source from: State Revenue Victoria

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