Land tax is administered by the State Revenue Office under the *Land Tax Act 2005* (Vic). It is generally assessed by reference to the taxable land owned by a person at the relevant assessment date, with exemptions applying to some land, including an eligible principal place of residence. The applicable rates can depend on the combined taxable holdings and ownership structure, including whether land is held through a trust.
Section 10G of the *Sale of Land Act 1962* (Vic) restricts the passing on of a vendor's land tax liability to a purchaser. For contracts within the restriction, a clause requiring the purchaser to pay land tax for which the vendor is or may become liable is void to that extent, and it is an offence for a vendor to include such a provision. The threshold is indexed and should be checked for the relevant contract date. As at 1 January 2026, the threshold is $10.7 million. Contracts entered into before 1 January 2024 are treated differently under the transitional rules.
Where a land tax adjustment is permitted, a single holding basis means the calculation is made as if the land being sold were the vendor's only taxable land, rather than applying the vendor's aggregate holdings rate. That distinction can materially affect the adjustment. Land tax, vacant residential land tax, absentee owner surcharge and other charges are separate liabilities and should not be treated as interchangeable.
CMK Legal's property and conveyancing team can help with this.
Check the contract date, sale price, any land tax clause, the vendor's land tax position and the current statutory threshold. Do not assume land tax is automatically adjustable simply because the contract contains an adjustment clause.
Law referenced: *Land Tax Act 2005* (Vic); *Sale of Land Act 1962* (Vic) ss 10G and 10I. Current official guidance: https://www.sro.vic.gov.au/owning-property/land-tax/ownership-structures-and-changes/changes-ownership