New Victorian Windfall Gains Tax

  • TurkAlert
  • Published 14.12.2021

Key Takeaways

The new Windfall Gains Tax (WGT) will apply to land that increases in value by more than $100,000 attributable to the change in zoning. The tax liability will rest with the land owner at the time of rezoning.

The WGT will take effect from 1 July 2023. 

New Legislation

On 12 October 2021, the Victorian Government introduced the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Bill 2021 (Bill). 

On 30 November 2021, the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Act 2021 (Act) received Royal Assent.

The Act will impose a WGT on the increase in land value resulting from the rezoning of land, and is due to commence 1 July 2023.

How does it apply?

WGT will apply when the taxable value uplift of the land resulting from rezoning exceeds $100,000.

Value Uplift Tax Payable
$0 - $99,999 $0
$100,000 to $499,999 62.5% of the uplift exceeding $100,000
$500,000 and over  50% on the whole uplift 


WGT is assessed on the 'aggregated taxable value uplift' of all the land owned by the taxpayer after rezoning. Taxable value uplifts is the difference in the capital improved value of the land before and after the re-zoning. The Valuer-General will be responsible for determining the value of the land before and after rezoning.

Who pays and when?

The land owner at the time the rezoning takes effect will be subject to the tax liability. In the case of multiple land owners they will be jointly assessed as if the land was owned by a single person. 

Owners who are liable to pay WGT are able to defer payment of up to 100% of the tax until the earlier of: 

  • 30 years after the rezoning event;
  • a dutiable transaction (other than certain excluded dutiable transactions) occurring in relation to the rezoned land; and
  • a relevant acquisition (other than an excluded relevant acquisition) occurring in respect of a landholder who is the owner of the rezoned land.

Unpaid or deferred WGT (along with any accrued interest) will constitute a first charge on the relevant land.

Are there any exemptions?

A number of exemptions apply as follows:

  • residential land which does not exceed 2 hectares and only land owned by a taxpayer that is rezoned (does not apply to commercial residential premises, residential care facilities or retirements villages unless separately titled);
  • land owned and used exclusively for charitable purposes, provided it continues to be used for this purpose 15 years after the rezoning;
  • land rezoned to correct technical errors;
  • transitional arrangements and rezoning of land subject to pre-existing contracts of sale or options arrangements entered into or underway prior to 15 May 2021; and
  • rezoning in relation to Growth and Infrastructure Contribution areas and land rezoned to a public land zone are excluded from the scope of the tax. 


Victorian landowners will need to be aware of this tax in addition to any other existing federal and states taxes payable, should their land be subject to any rezoning. The tax will have significant consequences for landowners and speculators expecting substantial profits from the rezoning of the land. Purchasers will also need to account for any WGT and accrued interest where Vendors have chosen to defer this liability.

Helpful link 

For further details of the changes to the Act click here. 

Stephen Teale


P: 03 8600 5008

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