What is special land tax, and who must pay it?
Special land tax is a land tax imposed where land that used to be exempt from land tax ceases to be exempt under one or more of the following categories:
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primary production land that is wholly or partly within the greater Melbourne area;
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sporting, recreational or cultural land;
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rooming houses;
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residential care facilities and supported residential services;
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caravan parks;
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land owned by public statutory authority with a taxable value of more than $224,999.00; and
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land used as a mine.
Special land tax is calculated at a rate of 5% of the taxable value of the land at the time of the change of use. Where land ceases to be exempt immediately upon or within 60 days of a change of ownership, special land tax is payable by the owner of the land before the change of ownership takes place. Outside of this timeframe the tax is payable by the owner of the land at the time of cessation of exemption (which will be the purchaser).
Care should be taken when buying and selling land to ensure it is clear if the responsibility for payment is to be different to that stated above.
