Business advice
and accounting

Our purpose is to help you on your journey as you grow. Learn more about our history, partners and purpose.

Our purpose is to help you on your journey as you grow. Learn more about our history, partners and purpose.

Your partners for Business Service and Advisory, Taxation, Audit, Fraud and Risk.

Whatever your business, industry or family office, from local or international institutions we bring extensive expertise.

We're one team with a purpose and passion for what we do. Learn about our culture and career opportunities available to you.

Uncovering insights, trends and inspiration to help business grow in an ever-changing world.

We are always looking for ways to engage and give back to our community.

Telephone: +612 9283 1666
Email: admin@esvgroup.com.au

Level 13, 68 York Street,
Sydney NSW 2000

Why us

Our purpose is to help you on your journey as you grow. Learn more about our history, partners and purpose.

What we do

Your partners for Business Service and Advisory, Taxation, Audit, Fraud and Risk.

Who do we help

Whatever your business, industry or family office, from local or international institutions we bring extensive expertise.

Work with us

We're one team with a purpose and passion for what we do. Learn about our culture and career opportunities available to you.

What we think

Uncovering insights, trends and inspiration to help business grow in an ever-changing world.

Working to give back

We are always looking for ways to engage and give back to our community.

Contact us

Telephone: +612 9283 1666
Email: admin@esvgroup.com.au

Level 13, 68 York Street,
Sydney NSW 2000

Windfall Gains Tax - One Step Closer to Implementation

22 November 2021

by Karli Connors

The proposed legislation enacting the Windfall Gains Tax (WGT) has been introduced into the Victorian State Parliament.  If enacted the WGT from 1st July 2023 will impact landowners in Victoria whose land is rezoned.

What is WGT and does it affect me?

First announced by the Victorian Government prior to its 2021-22 budget, WGT is now one step closer to implementation. Its commencement will result in landowners paying WGT when there is an uplift of more than $100,000 in the value of land due to a rezoning.

Tax Rates

Aggregated Taxable Value Uplift WGT Rate
$0 to $100,000 Nil
$100,001 to $499,999 62.5% of uplift above $100,000
$500,000 or more 50% of total uplift

The trigger event for the tax is a rezoning event (unless its specifically an excluded event) and therefore a taxpayer may not have the funds to settle the liability.  WGT can be deferred (refer below) but it attracts interest at the 10 year bond rate.

Who is liable?

In circumstances where there is one owner at the time of rezoning, the sole owner is liable for WGT. In more complex ownership situations, the liability is as follows:

  • Where land is owned by multiple persons, the owners will be jointly assessed for WGT without regard to the separate interest of each owner.
  • Where land is held on trust, the trustee will be assessed for the WGT in relation to all land subject to the trust, without regard to land held by the trustee for any other trust or for the trustee’s own benefit.
  • Where land is held by related corporations or trusts, members of a ‘related’ group are jointly and severally liable for WGT on all the land held by members of the group, that is rezoned by the relevant WGT event.

 Do I have to pay WGT?

As noted above, a landowner will become liable for WGT at the time of the rezoning event which will be due at the date specified in the assessment notice.  A deferral of WGT is possible, with it being payable at the earliest of:

  • A dutiable transaction on the land;
  • A relevant acquisition in respect of a landholder who is the owner of the land; or
  • 30 years after the WGT event.

Like land tax, any unpaid WGT, accrued interest and penalty tax will be the first charge on the land in respect of which WGT is payable. This means that it will have priority over any other encumbrances over the land.

There are a number of proposed exemptions from WGT including a residential land exemption where the land is less than 2 hectares.

If you are a current or prospective landowner in Victoria and are concerned about how WGT may impact you, please reach out to your ESV Engagement Partner for more information.