Windfall Gains Tax

On 1 July 2023 the State based Windfall Gains Tax (WGT) comes into effect.

What is WGT?

The WGT is imposed on land owners where their land has been rezoned by an applicable Authority and the rezoning results in the value of the land increasing by over $100,000.00. This increase in the value of the land from the rezoning is known as the Value Uplift. The WGT is applied to the Value Uplift, not the total value of the property after the rezoning.

The Value Uplift is difference between the Capital Improved Value (CIV) of the land immediately before the rezoning and the CIV of the land immediately after the rezoning.

The CIV figures used to determine the Value Uplift are set by the Valuer General. The current Capital Improved Value of your land is contained on your rates notice assessment issued by Council.

Should a rezoning event occur and you do not agree with the Capital Improved Values contained in the WGT liability notice, you can make an objection to these values to have them reviewed by the Valuer-General.

Calculating WGT

The WGT liability is not a fixed percentage and is calculated depending on the amount of the Value Uplift. Where a rezoning event results in a Value Uplift of:

  1. less than $100,000.00, the WGT will be nil;
  2. more than $100,000.00 but less than $500,000.00, 62.5% of the value uplift above $100,000.00 will be payable as WGT; and
  3. more than $500,000.00, 50% of the total value uplift will be payable as WGT.

Where a landowner owns multiple parcels of land which are rezoned in the same rezoning and this results in a Value Uplift, the Value Uplift across all the parcels of land subject to the same rezoning event will be aggregated to determine the WGT liability. The WGT liability is then payable on a proportional area basis per parcel.


Landowners will have two options in relation to how they choose to pay a WGT liability.

When the WGT liability is assessed by the State Revenue Office (SRO), you as the land owner in the first instance will have 30 days to pay the amount in full.

Alternatively, you may within 30 days of receiving the WGT liability notice opt into a deferred payment arrangement with the SRO for up to 30 years. Part or the whole of the WGT can be deferred.

The deferred WGT Liability will become payable within 30 days of the earliest of:

  1. a dutiable transaction involving the land (such as a transfer of the land);
  2. a relevant acquisition in respect of the landholder (such as the transfer of shares in a company that owns the land); or
  3. the day that is 30 years after the rezoning.

If you decide to defer the payment of the WGT liability, interest will accrue on the deferred liability at a rate equal to the 10 year Treasury Corporation of Victoria bond interest rate, being 4.38% as at the 31 May 2023.

If the land is subsequently subdivided after a WGT liability has been deferred the WGT is apportioned across the lots the land is subdivided into in the proportion which each lot bears to all the lots created by the subdivision. This apportioned WGT liability is payable on the earliest trigger above for that lot which allows for the staged subdivision and settlement of land by the Owner of the land.


There are exemptions from the WGT even where land has been rezoned resulting in a Value Uplift of more than $100,000.00.

Residential Land

Residential land is defined as land with a residential premises affixed which is lawfully being used as a residence or land where a residence is being constructed or renovated and a building permit has been issued in relation to construction/renovation of the residence.

Residential land that does not exceed 2 hectares will be exempt from the WGT. Where residential land exceeds 2 hectares after the rezoning event, the WGT will be payable on the portion of the land exceeding 2 hectares only.

Commercial Residential land such as a commercial residential premises, residential care facilities, retirement villages and supported residential services do not qualify for the residential exemption from the WGT.

Contracted Land Pre 15 May 2021

Land which is already under a Contract of Sale which was entered into before 15 May 2021 and a rezone event occurs before settlement of the Contract, the rezoning will be exempt from a WGT liability. After settlement of the Contract, if a rezoning event which triggers a WGT liability occurs, the land will become subject to the WGT the same as any other non-exempt land.

Rezonings Which Were Under Way Pre 15 May 2021

For owner led rezonings, the owner may be entitled to an exemption from WGT if it can be demonstrated that prior to 15 May 2021:

  1. the owner approached council or the Minister for Planning to request rezoning;
  2. the owner incurred significant costs in relation to that rezoning; and
  3. the rezoning request was prepared and registered by council, the Minister for Planning has agreed to prepare the rezoning as the responsible planning authority, or the Minister has authorised another person to undertake the amendment as the planning authority.
Charitable and University Land

Land which is continuously used for charitable purposes for 15 years after the WGT event is exempt from the WGT liability, as is land which is owned by universities provided the income derived from that land is used for the charitable purposes of the university.

Rural Zone rezoning

Land that has been rezoned to the following zonings will be exempt from WGT as a result of that rezoning event:

  1. Green Wedge Zone
  2. Green Wedge A Zone
  3. Rural Conservation Zone
  4. Farming Zone
  5. Rural Activity Zone
Growth Area Infrastructure Contribution 

Land which is rezoned to and from the Urban Growth Zone within the Growth Infrastructure Contribution (GAIC) area are also excluded from the WGT as these properties are already subject to GAIC.

If you would like to discuss your personal circumstances with us to determine your potential WGT liability or structuring of transactions to take advantage of deferral mechanisms and potential exemptions where a potential rezoning may occur, please get in contact with our Property Law team on 5445 3333.

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