Windfall Gains Tax is now live / 意外增值税(暴利税)制度

First announced on 15 May 2021 and then delayed 12 months, the Windfall Gains Tax (WGT) commenced on 1 July 2023.


Below is a refresher of how the WGT will apply, how much it will be, the relevant exemptions and our observations.


What is it and how does it work?


The WGT is a new tax imposed when a WGT event occurs. A WGT event is defined to mean any rezoning other than an excluded rezoning.


A rezoning will occur when:


  • it is approved by the Minister for Planning, and


  • the Notice of Approval is gazetted in the Victorian Government Gazette – unless the notice provides for a different commencement day, in which case the rezoning takes effect on the commencement date specified in the notice.


Accordingly, the first thing to consider is whether a rezoning is an ‘excluded rezoning’. Broadly, an excluded rezoning can include:


  • a rezoning between schedules in the same zone;


  • a rezoning that causes land to be brought within the growth area infrastructure contribution (GAIC) area;


  • the first rezoning after 1 July 2023 of land that was in the GAIC area immediately before the rezoning;


  • a rezoning that causes land that was not in a public land zone to be in a public land zone;


  • a rezoning that causes land that was in a public land zone to be in a different public land zone;


  • a rezoning that causes land to be in a zone declared to be in an excluded zone by the treasurer by notice in the government gazette; or


  • a rezoning of land that, immediately before the rezoning, was declared to be an excluded zone by the Treasurer.


The tax comes into effect from 1 July 2023 and will operate as a charge on the land. Where a property subject to WGT is subdivided, the WGT will be allocated proportionately to the new subdivided lots.


How much is it?


When rezoning occurs, and provided no exemption applies, the taxpayer will be liable for WGT on the taxable value uplift of the land. This is calculated as the difference in the capital improved value of the land before and after the rezoning.


The tax will be applied at different rates depending on the gain made in accordance with the below table:


Taxable value uplift
Applicable tax rate
Less than $100,000




$100,000 to $500,000


62.5% on the part of the gain that exceeds $100,000


More than $500,000


50% on the whole of the gain.



Where an entity owns multiple parcels of land that are impacted by the same rezoning, WGT is levied on the aggregate taxable value uplift of the land, ignoring any decreases in taxable value.


Grouping provisions also apply to aggregate the taxable value uplift of all land held by associated entities. Unlike the land tax regime, the grouping provisions here are broader, enabling the landholdings of associated trusts to be aggregated.


It is important to note that if the taxpayer disagrees with a WGT assessment, there is a two-month limit to object to the relevant valuation. There is no discretion for the Commissioner to extend this period.


Who pays and when?


Who needs to pay? The owner of the land at the time of the rezoning is liable for the WGT.  Taxpayers will be issued with a notice setting out their WGT liability and the date by which payment must be made.


Like the GAIC, landowners are able to elect to defer their liability until 30 days from the first to occur of the following:


  • when a dutiable transaction (other than an excluded dutiable transaction) occurs in relation to the WGT land – such as the sale of the relevant land; or


  • where a relevant acquisition (other than an excluded relevant acquisition) occurs in respect of a landholder who is the owner of the WGT land – ie under the landholder duty provisions; or


  • the day that is 30 years after the WGT event.


‘Excluded dutiable transactions’ include:


  • a dutiable transaction for no consideration;


  • transfers between charities where the land has and will continue to be used and occupied by the charities for a charitable purpose;


  • the acquisition of an economic entitlement; and


  • the transfer to a legal personal representative of a deceased individual.


An ‘excluded relevant acquisition’ occurs where there is a further acquisition of an interest in a landholder under the landholder duty rules.


While liability is deferred, it continues to accrue interest daily at the 10-year bond rate.




Although responsibility for the WGT is that of the landowner, and would ordinarily be triggered upon the sale of WGT land, it is possible for a purchaser of affected land to assume liability for the WGT where:


  • the transaction involves no consideration and the transferee elects to assume the liability; or


  • in some cases, for transfers between charities where the land is used and occupied for a charitable purpose.


In these circumstances, the 30-year deadline for the payment of the WGT does not reset; it remains 30 years from the WGT event (the rezoning).


Exemption: Residential land


Residential land that does not exceed two hectares and is used primarily for residential purposes (or primary production) will be exempt.


To be considered ‘residential land’ there must either be:


  • a building affixed to the land which, in the opinion of the Commissioner of State Revenue (Commissioner), is designed and constructed primarily for residential purposes and may lawfully be used as a place of residence; or

根据州财政专员(Commissioner of State Revenue)的意见,该土地上的建筑物主要设计和建造用于居住,并且可以合法地用作住宅;或

  • a residence:


    • that is being constructed or renovated on the land; and / 正在进行建造或翻新;且
    • before work started, the land was either capable of being lawfully used as a place of residence or there was an uninhabitable residence on the land; and / 在工程开始前,该土地可以合法用作住宅用地,或该土地上有一座无法居住的住宅;且
    • once the works are complete, the land will be capable of being lawfully used as a place of residence. / 一旦完工,该土地可以合法用作住宅用地。

The effect of the definition is that the exemption cannot apply to vacant land. For residential land greater than two hectares, the tax is chargeable on the uplift attributable to the portion of the land exceeding two hectares.


This two-hectare limitation could cause concern for farmers with significant landholdings that are caught by a rezoning decision. Additionally, land that is on a separate title to that of the farm’s residence will not be considered residential land and will be subject to WGT.


Exemption: Pre-existing contracts of sale and options


Sale contracts (or, in some cases, options) in place before 15 May 2021 should not trigger a WGT liability.


For example, WGT is not imposed where:


  • a contract of sale was executed before 15 May 2021;


  • a WGT event occurs after 1 July 2023; and


  • settlement occurs after the WGT event.


A similar exemption extends to unexecuted options granted before 15 May 2021, provided the terms of the sale were agreed at the time the option was granted.


Exemption: Rezoning substantially underway


Projects ‘substantially underway’ before the announcement of the WGT may also be exempt.


Where rezoning activities are underway, the relevant exemption depends on whether the planning scheme amendment was prepared by a Council or by (or at the request of) the Planning Minister.


Where the planning scheme amendment is prepared by a Council, an exemption applies where the Commissioner is satisfied that:


  • the planning scheme amendment constituting the rezoning was prepared by a Council; and


  • the request for the amendment was created and registered in the Amendment Tracking System by the Council before 15 May 2021; and


  • before 15 May 2021, the owner of the land requested the rezoning from Council and:


    • paid for, was liable to pay for, or had otherwise performed or procured relevant work in relation to the rezoning; or / 土地所有者已支付、应支付或以其他方式履行与土地重新规划相关的工程费用;或
    • paid, or was liable to pay, relevant costs to support consideration of the rezoning; and / 土地所有权人已支付或应支付与土地重新规划有关的相关费用;且
  • the total value of the relevant work is greater than:


    • $100,000; or / 10万澳元;或
    • 1% of the capital improved value of the land before the rezoning (if less than $100,000). / 重新规划前土地价值的1%(如果工程总价值低于10万澳元)。

In relation to rezonings prepared or requested by the Planning Minister, the same requirements as those above apply, except that the exemption does not take into account when the request was lodged in the Amendment Tracking System. Rather, before 15 May 2021, the Planning Minister must have agreed to prepare the amendment.


It is important to note that ‘relevant work’ and ‘relevant costs’ have defined meanings in the legislation, and not all costs and work generally will be captured when determining if the 1%/$100,000 threshold is met.

需要注意的是,"相关工程"和"相关费用"在法律中有明确定义,并非所有费用和工程都适用或符合1% / 10万澳元的要求。

Exemption: Charities


Charities are one of the few entities that are able to obtain a full exemption from the WGT in the form of a waiver. If a WGT liability is imposed on a charity in respect of charitable land (being land that is used and occupied by the charity for exclusively for charitable purposes) and it has remained charitable land for 15 years, the WGT liability can be waived.


Bottom line


Refreshingly, the WGT rules are relatively clear. The general consensus is that the law is well drafted and that the Victorian Government has taken into account a number of recommendations from industry groups. But that is only a small windfall, compared against its potential cost.


The tax has been marketed as a means of making sure that developers pay their fair share. However, the reality is that this cost will likely be passed on to homebuyers.  This, coupled with existing inflationary pressures and rising material and labour costs, will certainly not help housing affordability.


A real concern is that there is no larger carve out for primary production land. It is conceivable that an unwilling farmer may be forced to sell part of their land to fund the tax liability when it comes due. A tax that forces taxpayers to sell their land, is not an efficient one.


Perhaps the WGT is truly the Government wanting its share of Government-actioned increases in land value – on wind fall gains. But at what cost to businesses and Victorians given the current economic climate?




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