Land Tax Impacts on Commercial Property
Understanding which commercial properties are exempt from land tax — and which ones have been hit hardest by legislative changes — is essential for property owners navigating a changing regulatory environment.
Which Commercial Properties Are Exempt from Land Tax?
Some commercial properties may qualify for exemptions under specific circumstances. These can include:
- Properties used for charitable, religious or educational purposes
- Land owned and used by not-for-profit organisations
- Land used primarily for primary production (e.g. farming), in certain cases
However, exemptions are tightly defined and assessed by the State Revenue Office, so it’s important to seek advice if you believe your property may qualify.
Which Commercial Properties Have Been Impacted the Most by Changes in Land Tax Legislation?
Recent changes to land tax thresholds and surcharge rates have had the greatest impact on:
- High-value commercial sites in inner Melbourne and city-fringe suburbs
- Properties held in discretionary trusts or by foreign entities, due to specific surcharges
- Land-banked development sites, particularly where exemptions do not apply
- Commercial portfolios where multiple holdings push total taxable value into higher tiers
These changes have increased holding costs and, in some cases, led owners to restructure ownership or re-evaluate development timelines.
