Windfall Gains Tax – Landowners and prospective Purchasers beware

The Windfall Gains Tax (WGT) was introduced by the Victorian Government under the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Act 2021 (Vic) (the Act). Property Lawyer Shubha Rao summarises the tax implications for landholders.


The Windfall Gains Tax (WGT) targets windfall gains of more than $100,000.00 that property owners can accrue when the value of their land increases due to a WGT Event. A WGT Event is defined as a rezoning of land after 1 July 2023 that is not excluded under the Act.

How much is the WGT?

The WGT is calculated by determining the difference in capital improved value of the land prior to the rezoning and after the rezoning, less any deductions. The difference in the value of a parcel of land at the relevant points in time is called the ’value uplift’. (Rateable Land)

For rateable land, the value of the land at the relevant point in time is determined by valuations pursuant to the Valuation of Land Act 1960 (Vic).

Non-Rateable Land

For non-rateable land, the value of the land at the relevant point in time is determined by valuations obtained by the Valuer General.

What is the land 'value uplift' and where does it apply?

  • The Value uplift applies to both rateableand non-rateable land

  • WGT iscalculated on the ‘value uplift’ at the following rates:

o  For value uplifts up to $100,000.00 –Nil.  

o  For value uplifts between $100,001 and $499,999, the WGT rate is 62.5 percent on amounts above $100,000.00.

o  For value uplifts of $500,000 or more, the WGT rate is 50 percent (including the first $100,000).

There are also aggregation and grouping provisions thataffect the amount of WGT, which should be accounted for.

When must WGT be paid?

The WGT must be paid when the rezoning occurs and an assessment is provided to the landowner. The Commissioner of State Revenue may allow a deferral of the payment to the earlier of the following dates:

1.  30 years after the rezoning; or

2. A relevant acquisition occurs in relation to the corporate or unit trust landholder, or

3. A dutiable transaction occurs in respect of the land (commonly a sale of the land). Note that the following are excluded dutiable transactions.

(a) acquisitions of economic entitlements of land

(b) no consideration dutiable transactions

(c) land owned and used by charities which is transferred to a charity to be used for charitable purposes

(d) acquisitions in landholders that results from a pro rata increase in interests of all unitholders or shareholders; and

(e) acquisitions of further interests in landholders.

Interest is payable on any deferral and is calculated daily at the 10 year Australian government bond yield rate from time to time.

Does WGT apply to all property transactions?

No. Some transactions are excluded or exempt from WGT. The key instances are listed below:

  • Residential land (whether on one or more titles) that does not exceed two hectares, if the land is the only residential land owned by a taxpayer that is rezoned by a WGT Event. Residential land can include primary production land and must have a residential building on it or a building permit to build a residence. Generally, residential land does not include land that is occupied primarily as commercial residential premises, residential care facilities, supported residential services or retirement villages. There may be some exceptions for individual units within such premises that are separately owned and titled.
  • Land owned by a charity if the land continues to be used for charitable purposes for 15 years after the WGT is incurred.
  • Land rezoned to and from the Urban Growth Zone within the Growth Areas Infrastructure Contribution (GAIC) area, recognising that these properties are already subject to a separate additional charge.
  • Land rezoned to Public LandZones and used for public purposes.
  • A rezoning from one schedule to another in the same zone. Some transitional arrangements also apply in certain situations:
  • a) Land that is subject to a pre-existing contract of sale entered into before 15 May 2021 that has not been completed by the transfer of the land before the WGT Event occurred;
  • b) Land is subject to an option to enter into a contract of sale granted before 15 May 2021 that has not been exercised before the WGT Event occurred or has been exercised and the contract of sale to which the option relates has not been completed before the WGT event occurred, but only if the terms of the contract of sale were settled at the time the option was granted.

Landowners must be careful to ensure that there are no changes to the terms of an option contract after 15 May 2021 which may result in transitional exemption being lost.  

Rezonings that were underway before 15 May 2021:

Request through Council

  • The Landowner had requested the amendment before 15 May 2021;
  • The request must have been created and registered in the Amendment Tracking System by the Council before 15 May 2021; and
  • The Landowner had incurred costs above a threshold amount in relation to relevant work for the rezoning or relevant costs to support consideration of the rezoning.


Request through Minister for Planning

  • The Landowner had requested theMinister for Planning to make the amendment before 15 May 2021; and
  • The Minister agreed before 15 May 2021 to prepare the amendment; and
  • The Landowner had incurred costs above a threshold amount in relation to relevant work for the rezoning or relevant costs to support consideration of the rezoning.


Before purchasing any property or land, it is prudent to conduct due diligence. Windfall gains tax can be a substantial expense and prospective buyers should factor in the likelihood of a WGT event arising when contemplating a land purchase.

How Can Sharrock Pitman Legal Help?

Our Property team frequently advises purchasers, land developers and construction companies on taxation obligations relating to property transactions.

Please contact our Property team by calling 1300 205 506 or email by


The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

For further information contact  
Shubha Rao

Shubha Rao is a Senior Associate in the Property Law team at Sharrock Pitman Legal. Contact Shubha directly on (03) 8561 3372 or by emailing


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