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Amendments to State Taxes

The State Taxation and Treasury Legislation Amendment Act 2022 introduces a number of changes to State taxation, some of which were announced in the 2022–2023 Victorian Budget.

Land Tax for Principal Place of Residence (PPR) under construction

To date, when constructing or substantially renovating your PPR, owners were required to pay land tax during the period of construction. Owners would later be entitled to a refund of that land tax upon resuming or commencing occupation of their home.

From 1 July 2022 land tax is exempt for recently built or renovated homes subsequently used as a PPR. However, this is subject to certain requirements:

  1. The land was not used or occupied as a PPR as at 31 December in the preceding year because a residence was being constructed or renovated.
  2. The land is intended to be used and occupied as a PPR for at least 6 months commencing by the Qualifying Occupation Date, being the earlier of:
    1. 6 months after the Works Finish Date; and
    2. 4 years after the Works Start Date.
  3. No income was derived from the land in the preceding land tax year.
  4. The PPR exemption was not claimed in relation to any other land.

Failure to satisfy the six month occupancy requirement may result in the property being reassessed for land tax with penalties and interest.

The previous ‘refund’ regime under section 61 will still apply if construction or renovation of the home was completed before 1 July 2022. The new regime applies where construction has not been completed by 1 July 2022.
Please contact us if you require assistance claiming this exemption, as there are also new, stringent notification requirements which can result in penalties if they are not complied with.

Land Tax exemption for specialist disability accommodation (SDA) under construction

The Land Tax Act 2005 has also been amended to expand the exemption for residential services for people with disabilities to land on which an “SDA enrolled dwelling provided by an SDA provider within the meaning of the Residential Tenancies Act 1997” is being constructed. The exemption will apply for a maximum of two tax years.

The exemption has been made available retrospectively from the 2020 land tax year onwards.

Windfall Gains Tax exemption for universities

The new Windfall Gains Tax regime commences on 1 July 2023. See our previous article for more background.

The relevant Act has been amended to introduce a new exemption for universities. For this exemption to apply:

  1. the land must be owned by a university;
  2. the university must be a Charity; and
  3. any revenue derived from the land must be used to further the university’s charitable purposes.

Stamp duty on penalty interest

As a result of the decision in Commissioner of State Revenue v 1043 Melton Highway Pty Ltd [2020] VSC 820 the State Revenue Office has confirmed that stamp duty is now payable on penalty interest arising from a delayed settlement.

As an interim position, for contracts entered into between 1 July 2022 and 30 June 2023,  the threshold dutiable amount of penalty interest is $5,000. After that time, any amount of penalty interest will attract stamp duty.

Purchasers need to be mindful of this additional cost associated with defaulting under a contract of sale.

About Best Hooper – Victoria’s Property, Planning and Land Development Advisory Law Firm

Best Hooper are the oldest and most prominent developer focused law firm in Victoria who have served our community since 1886; through wars, recessions, depressions and pandemics. We are actively advising clients in relation to the COVID-19 outbreak on all property related matters including leasing, disputes, property transactions and planning advices and applications. We are continuously recognised as industry leaders in a variety of publications, including Doyles Guide and Best Lawyers.

Brett and Gian are members of our Property Law and Transactions team, if you require more information please call Brett on (03) 9691 0216 or email on or contact Giancarlo on (03) 9691 0220 or email on


Brett Taback

Associate Principal Lawyer
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Giancarlo Romano

Principal Lawyer
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