Changes to Land Tax and Windfall Gains Tax
The way vendors are allowed to share the cost of land tax and windfall gains tax with purchasers has changed.
As of 1 January this year, vendors are banned from passing on land tax and windfall gains tax to purchasers in a contract of sale (and option agreements in the case of windfall gains tax) where:
- For land tax, the sale price of their property is less than $10 million. From 1 January 2025, this threshold will be adjusted annually based on the Consumer Price Index.
- A windfall gains tax liability has been assessed before the vendor signs the contract of sale or option agreement.
These changes apply to contracts of sale (and option agreements in the case of windfall gains tax) signed on or after 1 January 2024 and make the process fairer and more transparent for property buyers.
These changes do not affect contracts signed before 1 January 2024 (or, for windfall gains tax, option agreements made before that date and contracts of sale of land entered into under the exercise of an option granted before that date), regardless of when settlement is due to occur.
Penalties apply to individuals and bodies corporate who breach these new prohibitions.
Further information can be found on: consumer.vic.gov.au/housing/buying-and-selling-property/selling-property/conveyancing-and-contracts-for-sellers
(Source: Consumer Affairs Victoria)
To discuss any property related matter, please contact Mark Ruttner, Managing Director
email@example.com 0411 419 674