“Who pays land tax in Victoria?”
It’s one of the most common questions we hear from commercial property investors and owner occupiers.
The reason for this is that land tax can directly impact your bottom line — affecting not just holding costs but also how a lease is structured and, ultimately, the long-term profitability of your investment.
What is Land Tax?
Land tax in Victoria is a state-imposed, annual tax assessed on the total taxable value of all land you own, excluding your principal place of residence. For those with commercial property interests, like our clients, it’s a key consideration in both commercial acquisition strategy and asset management.
Who is Responsible for Land Tax?
So, who pays land tax in Victoria? The legal liability sits with the landowner as at midnight on 31 December each year. This includes individuals, companies, trusts, and foreign owners — with varying thresholds, rates and surcharges depending on the ownership structure.
What catches many by surprise is how land tax obligations can differ across ownership types, and how they can influence lease negotiations.
Impact on Commercial Leases
In most commercial leases — particularly net leases — land tax is a recoverable outgoing, meaning the tenant may be responsible for covering the cost, depending on the terms agreed.
Key Points to Know About Victoria Land Tax:
- Calculated on the total value of all taxable land held in Victoria (excluding exempt land such as a primary residence)
- Different rates apply for trusts, companies and absentee owners
- The Absentee Owner Surcharge may apply to certain foreign property holders
For property owners and investors, understanding how land tax applies — and how it can be managed — is crucial to minimising costs and maximising returns.
To find out how Victoria’s land tax rules apply to your commercial property portfolio, or to review how your lease handles outgoings like land tax, get in touch with CPN Commercial Group today.
