Victorian State Taxes: What’s Changing in 2025 and Beyond?

Victoria’s state tax system is undergoing major reform, with implications for property owners, investors, and businesses. Here's what’s changing—and what you need to consider.

1. Emergency Services and Volunteers Fund (ESVF) Reforms

From 1 July 2025, the fire services property levy will be replaced with emergency services and volunteers fund and will continue to be collected via council rates notices.

How it’s calculated:

ESVF = fixed charge + variable charge – concession (if eligible) – rebate or other relief (if applicable)

To help reduce this rate you can make sure you have applied for all the appropriate concessions and rebates you are entitled to.

Fixed Charge - The fixed charge is based on the property’s classification and is linked annually to CPI, so make sure the classification is correct for your property.

Variable Charge - The variable charge is based on the capital improved value of the property, so if you disagree with this value, you have two months from the date of your rates notice to lodge an objection either with your local council or the Valuer-General Victoria’s website.

Concessions - Single Farm Enterprise Concession – Allows farms under common ownership to be assessed as one holding, reducing the fixed charge levy amounts. This concession must be applied for and is not automatic so check your rates notice carefully and contact your shire council if you need information on this.

Rebates - Volunteer Rebate – For CFA, SES volunteers and Shepparton Search and Rescue Squad members who own residential or farm property. They can apply for a rebate from the Vic Services website from late July 2025. Go to https://service.vic.gov.au/find-services/housing-and-property/eligible-volunteers-rebate-scheme

2. Land Tax Changes & Exemptions

Since 2024 the Victorian land tax thresholds changed with many landholders feeling the financial impact of these changes. The main adjustments were:

Threshold Adjustments

The general threshold dropped from $300,000 to $50,000 in addition to increasing the land tax rates. Land valued between $50,000 and $100,000 will have $500 to pay in land tax and those in the next banding up to $300,000 will pay $975. For full details see State Revenue Office website: https://www.sro.vic.gov.au/about-us/rates-and-statistics/current-rates/land-tax-current-rates#general24

Trusts: Trust surcharge rates have increased and apply when the total taxable value of land held by the trust is $25,000 or more, making it considerably more expensive to hold property in a trust structure. Some trusts, such as charitable trusts and non-profits may be exempt from the surcharge, and notifying the State Revenue Office (SRO) about beneficiaries can impact the assessment. https://www.sro.vic.gov.au/

Primary Production Land (PPL) Exemptions

Land used primarily for primary production may be exempt from land tax. The eligibility criteria varies depending on the location of the land (inside or outside greater Melbourne) and the nature of its use. Recent rulings have clarified what constitutes 'preparation' for primary production, which can also qualify for the exemption. sro.vic.gov.audr.www.sro.vic.gov.au

Action Point: Given the complexity and recent changes, it's advisable to review your land tax assessments carefully, as we have seen a rise in the number of incorrect assessments. If you believe an exemption applies or if you're uncertain about your liability, contact our office or the SRO directly..

3. Commercial and Industrial Stamp Duty Reform (CIPT)

From 1 July 2024, Victoria is transitioning from upfront stamp duty to an annual property tax model for commercial and industrial properties. This annual tax will be know as Commercial and Industrial Property Tax (CIPT).

How it works:

From 1 July 2024, commercial or industrial properties will transition to the new model if they meet certain criteria when sold. Only properties that have a change in ownership will be impacted, those properties that continue to be held by the same owners with no change in use will not be affected.
Properties will transition into CIPT reform if there is an eligible dutiable transaction or relevant acquisition, defined as an entry transaction.
Duty is still payable on the entry transaction, then ten years after the entry transaction, CIPT will be payable if there has been no change in use.
Annual property tax called CIPT is a flat rate of 1% of the property’s (unimproved) site value.
Once transitioned, the property is exempt from stamp duty for future owners.
CIPT is different to land tax, so as a commercial or industrial land owner you may be liable for both land tax and CIPT.

Note, land that is exempt for land tax purposes will normally be exempt for CIPT.

CIPT only applies to qualifying commercial and industrial land, not residential.

4. Short Stay Accommodation Levy (SSL)

From 1 January 2025, a 7.5% levy will apply to revenue earned from short-stay accommodation (e.g. Airbnb, Stayz).

Applies to:

Residential short-term rentals (less than 28 consecutive days and excludes hotels and motels).
Can be collected through booking platforms or if you rent your property out directly and collect the money yourself you are still liable to report and remit 7.5%.
Based on gross revenue, not number of nights and includes add on charges such as cleaning and GST but excludes credit card fees.

Funds raised will support affordable and social housing initiatives.

5. Vacant Residential Land Tax (VRLT) – Expanded

From 1 January 2025, VRLT will apply statewide, not just to inner and middle Melbourne.

Key features:

Applies to homes vacant more than 6 months per year.
Annual tax of 1% of capital improved value (CIV).
Residentially zoned land is targeted.

Some exemptions exist (e.g. deceased estates, genuine holiday homes, renovations) but are strict and must be documented.

6. Windfall Gains Tax (WGT)

Introduced in 2023, the WGT applies when land is rezoned and its value increases by more than $100,000. The amount of WGT depends on the amount of uplift, being:

Uplift between $100,000–$500,000 taxed at a marginal rate of 62.5% on the uplift above $100,000
Uplift of $500,000 or more will have the entire uplift amount taxed at 50%.

Can be deferred up to 30 years or until the property is sold.

There are a number of exemptions including:

Residential land exemption
Land entitled to a transitional exemption
Charitable and university land

What Should You Do Now?

Reassess land holdings, exemptions, and property usage
Apply for eligible concessions like the Volunteer Rebate or Single Farm Exemption.
Act early to prepare for land tax, ESVF, SSL, VRLT, WGT and stamp duty changes.
Visit the Victorian State Revenue Office website for more information on all the above items. https://www.sro.vic.gov.au/

Need support or clarification?

We're ready to help with land tax reviews, levy planning, or assessing transaction strategies. Reach out to ensure you're not paying more than necessary. (03)5571 0111

< Older Post

Newer Post >

Aged Care “Deposits” Explained

By Cogger Gurry • December 17, 2025

Aged Care “Deposits” Explained: RADs, DAPs and What Families Need to Know When a loved one moves into residential aged care, one of the biggest (and most confusing) costs is the accommodation payment — often referred to as an “aged care deposit”. In practice, there are a few different ways to pay, and the best option depends on cash flow, assets, and your broader plans. Step 1: Start with the room price Before entry, you’ll agree on a room price with the aged care home. Providers must publish their prices and you can negotiate (but you generally can’t be charged more than the published price for that room). If a provider wants to charge above a government-set threshold, they may need approval from the Independent Health and Aged Care Pricing Authority. Step 2: Your means assessment affects what you pay Services Australia assesses income and assets to determine whether you’ll pay the full accommodation cost yourself or receive some government support. Those with support may pay an accommodation contribution instead of the full price. The three common payment methods Most residents will be offered one (or a mix) of the following options: 1) Refundable Accommodation Deposit (RAD) A RAD is a lump sum paid upfront (think of it like a large bond). It is refundable when the resident leaves care, less any agreed deductions (for example, unpaid fees). The RAD is also treated as an asset in the means assessment. 2) Daily Accommodation Payment (DAP) A DAP is a non-refundable daily amount, like paying “rent” instead of a lump sum. It’s calculated using the government-set Maximum Permissible Interest Rate (MPIR), applied to the unpaid portion of the room price. In simple terms: DAP = (Unpaid RAD × MPIR) ÷ 365 3) A combination of RAD + DAP Many families choose to pay part of the RAD upfront (to reduce the daily cost) and pay a smaller DAP on the balance. This can help manage cash flow while keeping some funds available. An additional option is to use the part payment of the RAD to fund the payment of the DAP. This helps with cashflow but does have the effect of increasing the amount of the DAP as the RAD diminishes over time. A note on recent reforms Rules can differ depending on when someone enters care. Recent reforms introduced RAD retention for eligible residents (a small non-refundable amount deducted over time, capped) and changes affecting how accommodation costs are managed under newer arrangements. If you’re arranging entry now, it’s worth checking which “entry date” rules apply before signing. How we can help Aged care decisions are often made quickly, under stress. Before you commit to a RAD, DAP, or a mix of both, it’s wise to consider how the choice affects: ongoing cash flow and affordability sale/retention of the family home Centrelink outcomes and estate planning General information only: This article is not personal financial advice. We recommend seeking advice tailored to your circumstances before making decisions. Before you choose a RAD, DAP or a combination, get advice tailored to your circumstances. Call us to book an aged care funding review, so you can feel confident about the decision and avoid surprises.

Start Your Year-End Payroll, Tax And Employee Leave Planning Now

By Cogger Gurry • November 13, 2025

Start Your Year-End Payroll, Tax And Employee Leave Planning Now The end-of-year holiday period can be make or break for your business. Whether you’re gearing up for a rush or planning a shutdown, the key is early planning for payroll, tax and super, alongside careful compliance with workplace laws. Start by checking whether any year-end paydays will fall on public holidays or during your closure. If so, you’ll need to bring the pay run forward so staff are paid before bank cut offs, and tell employees about any temporary date changes in writing. While the ATO generally allows lodgement and payment on the next business day when a due date falls on a weekend or public holiday, that doesn’t extend to paying wages late. Report each pay run through Single Touch Payroll (STP) on or before payday, including any brought forward payments you’re processing before year-end closure. Keep your PAYG withholding and BAS lodgements on track. If you’ll have difficulty meeting due dates, contact your tax adviser and the ATO early to discuss options. Don’t overlook super guarantee (SG) contributions on wages and paid leave taken over the break; annual leave and public holiday pay are part of ordinary time earnings for SG purposes. October to December quarter super must be received by employees’ funds by 28 January, so pay early to allow for bank processing times and so you don’t trigger the SG charge, interest, penalties and loss of deductibility. If you provide year-end bonuses or staff gifts, process bonuses through payroll and withhold tax, and consider whether FBT applies to functions or presents. The minor benefits exemption may cover low cost, infrequent items, but good records are essential. Remember that full-time and part-time employees who would normally work on a public holiday are entitled to their base rate for ordinary hours if they don’t work. You can ask employees to work public holidays, but requests must be reasonable and employees can refuse on reasonable grounds. If they do work, apply the correct penalty rates or time off in lieu under their award or agreement. Where a public holiday happens during an employee’s annual leave, it counts as a public holiday, not a leave day. For holiday shutdowns, you can only direct employees to take annual leave if an applicable award or registered agreement allows it, usually with advance written notice. Where staff don’t have enough leave, many awards allow leave in advance or unpaid leave by agreement; make sure to document any agreement in writing. Check whether leave loading applies to annual leave taken over this period, and ensure your payroll system calculates it correctly.

PayDay Super

By Cogger Gurry • November 13, 2025

PAYDAY SUPER - Next step for payday super: legislation introduced to Parliament The government’s payday super reforms have taken another step towards implementation with the introduction of legislation to Parliament. Requiring employers to pay employee super contributions on payday, the reforms are designed to ensure that employees benefit from more frequent and earlier super contributions that grow and compound over their working life and reduce instances of unpaid super. Contribution timeframes are now measured in “business days” rather than “calendar days”, and employers will have 7 business days to make contributions. The legislation still needs to pass through both the House of Representatives and the Senate before it becomes law, but you shouldn’t wait to start planning. Recognising that employers need time to deploy, test and embed changes in their payroll systems and business processes, the ATO has released a new draft Practical Compliance Guideline that outlines its proposed compliance approach for the first year of payday super (starting 1 July 2026). It plans to use a risk-based framework where employers will be categorised as at low risk, medium risk or high risk of not meeting their payday super obligations. What’s next? Start preparing now. Review your payroll systems and processes to ensure they’re ready for payday super by 1 July 2026; consider whether more frequent super payments could have cash flow implications for your business that you need to act on; and look for alternatives if you use the SBSCH, as it will be closed from 1 July 2026. Planning ahead will help you be compliant with the law and make a smooth transition. Keep an eye on developments as the legislation progresses through Parliament and as the ATO finalises its compliance guideline. Changes could still be made before the reforms take effect.