The Windfall Gains Tax (“WGT”) comes into operation in Victoria on 1 July 2023.

The relevant legislation is the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Act 2011 (Vic) (the “Act”).

What is WGT?

Unlike Capital Gains Tax (which is a federal tax), WGT will be a tax imposed on Victorian landowners arising from the rezoning of land. As a landowner, if the land you own in Victoria is rezoned and the rezoning results in a value increase of your land, you may be taxed on the “value uplift”, i.e. on the difference between the property’s capital improved value (“CIV”) pre-rezoning and the CIV post-rezoning.

No WGT applies if the taxable value uplift is under $100,000. However WGT will apply where the value uplift is:

  • $100,001 to $499,999: at a taxable rate of 62.5% on the value uplift that exceeds the tax-free threshold of $100,000

i.e. WGT = (taxable value uplift – $100,000) x 0.625

  • $500,000 or more: at a taxable rate of 50% on the total value uplift

i.e. WGT = taxable value uplift x 0.50

Landowners will receive a notice from the Victorian State Revenue Office (“SRO”) shortly after the rezoning occurs advising them of the “taxable uplift value” and the WGT due. The due date for payment is anticipated to be 14 days from the date of the notice.

Who is liable for WGT?

The landowner of the property is liable for WGT. For joint owners, the land will be assessed as a single owner. If the land you hold comprises of more than one title, or you own multiple separate properties affected by the rezoning, the taxable value uplift for all the land will be assessed on an aggregated basis.

In relation to properties held by various related entities (i.e. involving companies and trusts), these entities may be grouped and WGT will be assessed on the taxable value uplift of all properties effected by a WGT event which are held by the group on an aggregate basis.

Responding to errors in a WGT assessment

Under the Act, a landowner must notify the SRO of any error or omission in the notice of assessment within 60 days from the date the notice of assessment is issued.

The error may relate to the SRO failing to include additional land which should have been included in the assessment. Penalties may apply to landowners who fail to provide this additional information.

Landowners may also submit notice if they are of the view that there is an error in the calculation of the taxable value uplift (i.e. they object to the assessment). The challenge is that the landowner will need to obtain evidence in support of their view, i.e. valuations of the property CIV both immediately pre- and post-rezoning.


Landowners may elect to defer up to 100% of their WGT by notice to the SRO prior to the date the tax is payable.

Interest will apply to deferred WGT at the 10 year Australian government bond yield rate. As at 31 January 2023, this is a rate of 3.54%.

Any unpaid WGT (including any penalties and interest) will be registered as a first charge on the title of the land. If WGT is deferred where a plan of subdivision is later registered, the tax liability will be apportioned across the lots in the plan based in the area.

When is deferred WGT payable?

Deferred WGT is payable by no later than 30 days after the earlier of:

  • a dutiable transaction occurring in relation to the land (e.g. sale of the land);
  • a relevant acquisition occurring in relation to a landholder that owns the land;
  • 30 years after the WGT event (i.e. the rezoning occurred).

There are some dutiable transactions and acquisitions which do not trigger payment of deferred WGT. These exclusions are provided for under section 28 of the Act.


There are some properties which are exempt from WGT, including:

  • residential land not exceeding 2 hectares. This includes commercial residential premises, residential care facilities, retirement villages and supported residential services.
  • land rezoned to or from the Urban Growth Zone within a GAIC area;
  • land zoned to a Rural Zone (other than a Rural Living Zone);
  • land subject to pre-existing contracts of sale for land or option agreements entered into prior to 15 May 2021 which have not been completed or varied before 1 July 2023;
  • land used and occupied by a charity for charitable purposes for 15 years after rezoning takes place.

The way forward

Be aware that as a landowner, you may be liable for WGT pursuant to rezoning occurring on or after 1 July 2023.

For more information, please follow the link:

If you have any queries regarding how WGT may affect you, please do not hesitate to contact us at NextGen Legal on (03) 9039 2142 to make an appointment.