Insights Library

Windfall Gains Tax – Update

Joel Snyder

Following a significant amount of industry consultation, and uncertainty from the developer community on how the Treasurer’s announce on Windfall Gains Tax would be applied, the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Bill 2021 has been introduced into parliament.

The Windfall Gains Tax (WGT) has been introduced to capture an uplift in value of private land caused as a result of rezoning. The Victorian Government has sought to gain benefit from these profits by way of a redistribution of the uplift to fund services and infrastructure in communities.

This does not apply to Victoria’s growth areas which are already subject to Growth Areas Infrastructure Contribution (GAIC).

The key points are as follows:

  • The liability arises on a “WGT event”, which is a rezoning by way of amendment to a planning scheme.
  • The owner of the land at the time of the WGT event will be liable for the WGT.
  • WGT will be assessed on an aggregate taxable value uplift of all the land owned by the taxpayer or related parties that is rezoned.
  • There are limited exemptions

Rate of Windfall Gains Tax

The rate for which the WGT will be applied depends on the uplift in taxable value of the property:

  Taxable value uplift Rate
  Not more tan $100,000   Nil
  More than $100 000 but less than $500 000   62⋅5% of that part of the taxable value uplift that
exceeds $100 000
  $500 000 or more   50% of the taxable value uplift


There will be an exemption for up to 2 hectares of residential land (including primary production land with a residence). It appears that, at the least, a building permit for a dwelling must have been issued before the rezoning to be eligible for this exemption.

Land which is subject to a contract of sale entered into prior to 15 May 2021 that has not been completed before the WGT event will also be exempt.

Similarly, if rezoning was “underway” by 15 May 2021 may also be exempt. This appears to relate only to developer-led rezonings.

Other less common exemptions may also apply.

Deferral of Liability

There will be an ability for a person to defer up to 100% of the WGT liability (subject to interest). It appears that such deferral will likely end in most circumstances upon the occurrence of a dutiable transaction or after 30 years, whichever is earlier. There may be limited opportunity for a further deferral on a dutiable transaction where there is no consideration paid for the land.


A right to an objection on value appears to be removed where the value of land is based on an assessment made by a valuation authority under the Valuation of Land Act 1960. Otherwise, we would expect the usual process for objections under that Act apply. This means that it is important for an owner to object as soon as any notice of assessment is received if the owner believes that the valuations are not reflective of the correct values.

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

Best Hooper has a rich history as being the longest-serving and most prominent developer focused law firm in Victoria. We are at the forefront of the development industry and continuously recognised as industry leaders in a variety of publications, including Doyles Guide and Best Lawyers.

If you have any questions about this article or require more information, please contact Joel Snyder, (03) 9691 0211 or

Joel Snyder

Managing Principal
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