Land Tax Victoria 2026-27: Rates, Thresholds and Calculator Guide

Victoria has the lowest land tax threshold of any Australian state — just $50,000 in taxable land value. That means virtually every Melbourne investment property owner pays land tax, regardless of when they bought or how much the property cost. A single inner-suburb investment property will almost always trigger a bill.

Use the Land Tax Calculator to estimate your exact Victorian land tax liability.

Quick answer: The Victorian land tax threshold is $50,000. For land valued at $800,000, the standard 2026-27 land tax bill is approximately $5,675 per year. Trusts pay an additional 0.5% surcharge. Foreign investors and absentees pay a further 4% on total land value.

Victorian land tax rates and thresholds 2026-27

Source: State Revenue Office Victoria, sro.vic.gov.au. Rates are for individuals. Trust and absentee surcharges apply in addition to standard rates.

Taxable land value	Annual land tax
Under $50,000	Nil
$50,001 – $100,000	$500 flat
$100,001 – $300,000	$975 + 0.20% of amount above $100,000
$300,001 – $600,000	$1,375 + 0.50% of amount above $300,000
$600,001 – $1,000,000	$2,875 + 0.80% of amount above $600,000
$1,000,001 – $1,800,000	$6,075 + 1.30% of amount above $1,000,000
$1,800,001 – $3,000,000	$16,475 + 1.90% of amount above $1,800,000
Over $3,000,000	$39,275 + 2.65% of amount above $3,000,000

Assessment date: 31 December each year. Your land tax liability is based on the total taxable land value you hold in Victoria as at 31 December.

Worked example: $800,000 land value in Victoria

Scenario: You own a single investment property in Melbourne. The State Revenue Office has assessed your land's unimproved value at $800,000 as at 31 December 2026.

Standard rate calculation (individual):

Land value: $800,000 — falls in the $600,001–$1,000,000 bracket
Base: $2,875
Plus: 0.80% × ($800,000 − $600,000) = 0.80% × $200,000 = $1,600
Total standard land tax: $4,475

If held in a discretionary trust:

Standard land tax: $4,475
Trust surcharge: 0.5% × $800,000 = $4,000
Total land tax in trust: $8,475

If you are a foreign investor / absentee owner:

Standard land tax: $4,475
Absentee owner surcharge: 4% × $800,000 = $32,000
Total land tax as absentee: $36,475

The trust and absentee surcharges apply to the total taxable land value, not just the portion above the threshold — making them highly punitive at higher land values.

What "taxable land value" means in Victoria

The taxable land value is the unimproved value of the land — the value of the block alone, assessed by the Valuer-General Victoria (VGV) annually. It excludes the value of buildings, improvements, fixtures, and landscaping.

This figure is not the same as:

The price you paid for the property
The council rates valuation (Capital Improved Value)
The total market value of the property

For a $1.2 million townhouse in Melbourne's inner suburbs, the unimproved land value might be $600,000–$800,000, depending on land size. The SRO uses the VGV assessment, which you can check on the SRO portal or via the State Revenue Office's property search.

Victorian land tax: key rules

Aggregation

The SRO aggregates all taxable Victorian land you own — across all properties — to calculate your total land value. There is no separate threshold per property. If you own three properties with land values of $200,000, $250,000, and $300,000, your total taxable land value is $750,000 and you pay tax on the full $750,000 (not on each property separately).

Principal residence exemption

Your principal place of residence is exempt from Victorian land tax. The exemption applies to the land under and surrounding your home. You must occupy the property as your principal residence, and you can only claim the exemption on one property.

Trust surcharge (0.5%)

Trusts holding land in Victoria pay an additional 0.5% surcharge on top of the standard rate. This applies to discretionary trusts, unit trusts, and fixed trusts. The surcharge is applied to the total taxable land value — not just the amount above the threshold.

Who this catches: Property investors who hold investment property in a family trust for asset protection or estate planning reasons. The trust surcharge in Victoria is one reason many advisers now recommend individual ownership over trust ownership for Victorian investment property.

Absentee owner surcharge (4%)

If you are a foreign national or an Australian living overseas (ordinarily resident outside Australia), a 4% absentee owner surcharge applies to your total taxable Victorian land value. This surcharge is in addition to standard land tax rates.

The absentee surcharge was introduced in 2016 and has been increased over time. It applies to each taxable landholding regardless of value — there is no threshold exemption for the surcharge itself.

Vacant residential land tax

A separate vacant residential land tax (VRLT) applies to residential properties left vacant in certain Melbourne council areas. If a property is a principal place of residence or used for genuine investment (tenanted or actively marketed for rent), it is exempt.

Vacant for less than 3 years: 3% of capital improved value per year
Vacant for 3+ years (from 1 January 2026): 6% of capital improved value

Capital improved value (the basis for VRLT) is different from unimproved land value and is typically significantly higher. A $1.2 million property left vacant would face VRLT of $36,000 per year (3% rate) — substantially more than the standard land tax on the unimproved value.

Assessment date: 31 December

Victorian land tax is assessed on 31 December each year. If you settle on an investment property on 1 January, you don't pay land tax for that calendar year. If you settle on 30 December, you do. Settlement timing around year-end matters for land tax in Victoria.

Reducing your Victorian land tax bill

Timing of purchases and sales: Settlement before 31 December triggers land tax for that year; after 31 December means the first bill is the following year.

Ownership structure: Individual ownership avoids the trust surcharge (0.5%). Run the numbers before deciding whether trust ownership's asset protection benefits outweigh the ongoing land tax cost.

Seek a reassessment: If you believe the VGV has overvalued your land, you can object to the land valuation. If successful, the reduced land value flows through to your land tax bill.

Multiple states: Holding properties across different states gives you a separate threshold in each jurisdiction. Moving some investment property exposure to NSW (threshold $1,075,000) or QLD (threshold $600,000) may reduce total land tax across your portfolio compared to concentrating all holdings in Victoria.

Frequently Asked Questions

What is the land tax threshold in Victoria for 2026-27?

The Victorian land tax threshold is $50,000. Any taxable land value below this is exempt. This is the lowest threshold in Australia.

How is Victorian land tax calculated?

Land tax is calculated on the total taxable unimproved land value you hold in Victoria as at 31 December, using the rate table above. The SRO applies the standard rate table to individuals. Trusts pay an additional 0.5% surcharge, and absentee owners pay an additional 4%.

Do I pay land tax on my principal residence in Victoria?

No. Your principal place of residence is exempt from Victorian land tax. The exemption applies automatically to one property that you occupy as your main home.

What is the absentee owner surcharge in Victoria?

The absentee owner surcharge is a 4% additional land tax charge applied to the total taxable land value held by foreign nationals or Australians ordinarily resident overseas. It applies on top of standard land tax rates.

When is Victorian land tax assessed?

Victorian land tax is assessed as at 31 December each year. The SRO issues notices of assessment during the following year (typically February–May). Payment can be made in instalments.

This article is for general information only and does not constitute financial, tax or legal advice. Land tax thresholds and rates are set by the Victorian Government and subject to change. Verify current rates with the State Revenue Office Victoria before making financial decisions.