With 2026 land tax assessments just around the corner, these changes bring key obligations and deadlines that warrant close attention. 

Absentee owner surcharge – notification by 15 January 

The absentee owner surcharge (AOS) is an additional land tax imposed on properties owned by absentee individuals or entities (essentially foreign owners of Victorian land). As of 2026, the AOS is a 4% surcharge on the taxable land value, levied on top of regular land tax. It applies broadly to both residential and commercial land holdings.  

15 January 2026 was the cut-off for absentee owners to notify the SRO of their status, if they were an absentee as of 31 December 2025. Every year, foreign owners must declare their absentee status by 15 January so that the SRO can apply the surcharge in the upcoming land tax assessment. If an owner fails to notify but is later identified as foreign, the SRO will back-charge the surcharge and may impose penalties for the late notification. 

It’s worth noting that exemptions from AOS are very limited. Generally, only developers undertaking substantial development projects (which provide economic benefits to Victoria) might obtain a temporary exemption from the surcharge. Passive foreign investors or landlords are unlikely to be eligible for the exemption. Therefore, affected owners should ensure they have notified the SRO on time and factor the surcharge into their investment returns. 

If you’re an absentee owner and did not yet notify for 2026, contact the SRO immediately. Although the 15 January deadline has passed, making a late notification voluntarily may help reduce penalties. 

Short stay levy – first annual returns due 30 January 2026  

The short stay levy applies to short stays in Victoria from 1 January 2025, on bookings that are less than 28 consecutive days (not including the checkout day). The levy of 7.5% of the total booking fee is to be collected and paid by either: 

The first annual short stay levy return is due on 30 January 2026, with owners, booking platforms, and tenants being required to register before lodging their first return if they have a liability. It should be noted that booking platforms do not need to register individual properties. 

Booking platforms and property owners or tenants who accepted short-stay bookings during 2025 must register for the short stay levy and submit their first annual return by 30 January 2026, provided their total booking income did not exceed $75,000. 

Providers whose short-stay accommodation bookings generated more than $75,000 in 2025 are required to lodge quarterly returns, with the next instalment due by 30 April 2026. 

Failure to register and comply with payment obligations may result in the SRO initiating recovery action for any outstanding levy amounts, along with applicable penalties. 

Vacant residential land tax – notification by 15 February & expanded scope  

VRLT is a state tax designed to discourage empty properties and increase housing supply. Since 2018 it has applied an annual tax (1% of a property’s value, increasing to 3% for long-term vacancies) on residential homes in Melbourne that were vacant for more than 6 months in the preceding year. From 1 January 2025, residential houses in regional Victoria are also subject to VRLT.   

Owners of such properties must notify the SRO each year and then pay VRLT on their land tax bill if liable. Owners of vacant residential land in 2025 are required to notify the SRO by 15 February 2026 of the property’s vacancy status. This notification is mandatory even if you believe an exemption applies (e.g. for newly built homes, holiday homes, or other exempt categories). The SRO uses these notifications to issue VRLT assessment notices for the 2026 tax year. Failure to notify the SRO by 15 February may result in penalties being applied. Owners who have already notified that they are exempt (such as under a holiday home exemption) do not need to notify the SRO again, provided their circumstances have not changed.

Perhaps the biggest change is the expansion in the scope of VRLT. From 1 January 2026, VRLT will apply to land in Metropolitan Melbourne that is capable of residential development but has remained undeveloped for at least 5 years. This will apply to land that is vacant and land with a residence that is partly built but has not been occupied. In other words, long-term ‘land banking’ will now likely attract VRLT. 

The Commissioner of State Revenue (Commissioner) has a discretion to extend this 5-year period. Broadly, the Commissioner will consider residential land as ‘not vacant’ for a tax year if construction of a residence has not commenced after five years and the owner: 

In considering whether to exercise discretion, the Commissioner may take into account factors such as site access limitations, findings related to cultural heritage, environmental or ecological constraints, extreme weather events, delays in utility connections, and ongoing planning appeals. More information on the factors considered can be found in the Government Gazette. 

Heightened SRO compliance focus in FY2026 

The SRO has significantly ramped up its compliance efforts for the 2025–26 financial year, following a year in which more than 90% of its 13,300+ investigations uncovered non-compliance, resulting in $888 million in assessed liabilities. This year, the SRO is targeting high-risk areas across land tax, vacant residential land tax, and absentee owner declarations, with a particular focus on incorrect exemption claims, undeclared absentee ownership, and failure to notify vacant or undeveloped land. 

Property owners and investors should expect increased scrutiny, especially where land is incorrectly receiving principal place of residence or primary production exemptions, or where VRLT and absentee owner surcharge notifications have not been lodged. The SRO is also closely monitoring properties claiming the holiday home exemption and land held in a trust or by foreign owners. With advanced data-matching tools, the SRO is well-positioned to detect and penalise non-compliance. Early engagement, accurate reporting, and professional advice are essential to avoid reassessments and penalties. 

How SW can help 

Navigating Victoria’s 2026 land tax environment can be complex, with new levies, expanded obligations, and heightened SRO scrutiny. SW can assist you in navigating these obligations by assessing landholdings to determine potential liabilities under the rules, ensuring all relevant notifications are submitted on time, and implementing strategies to minimise exposure to penalties and reassessments. 

Contributor

Blake Trad

The post Navigating Victoria’s 2026 land tax environment appeared first on SW Accountants & Advisors.

Updated Landholder duty ‘associate transaction’ ruling 

Newly updated Revenue Ruling DA-057v2 replaces the former DA-057 which provided taxpayers with the Commissioner’s view on the meaning of ‘associated transaction’ in the Victorian landholder duty provisions. The updated ruling reflects the Court of Appeal’s decision in Oliver Hume and has other minor amendments. 

To recap, the Victorian Court of Appeal in Oliver Hume upheld the VCAT decision which found that the share acquisitions by 18 independent investors under a widely distributed Information Memorandum (IM) were subject to landholder duty as an associated transaction. For further details on the case, please refer to our previous alerts here. 

The updated ruling stated that when considering whether an ‘associated transaction’ was made, the focus is on the relationship between the acquisitions and not the parties involved in the acquisitions. Thus, the relationship of the people in a share or unit issue should not be the deciding factor when assessing the existence of an associated transaction. Instead, the focus should be on the circumstances surrounding the share or unit acquisition and whether the relevant agreements and the parties’ conducts infer a unity or oneness between the acquisitions. The Commissioner makes it clear that interests acquired by independent members of the public under a genuine public offer may constitute an associated transaction.  

The updated ruling also qualified the Commissioner’s previous statements that he would not impose the associated transaction provisions in circumstances concerning genuine public offers made under a product disclosure statement or prospectus lodged with Australian Securities and Investments Commission (ASIC). This is now limited to circumstances where the public offer results in a conversion to a public unit trust or listed company and the transaction is subject to duty under sections 89B or 89C. 

Voluntary Disclosure Regime (‘VD’) 

Emboldened by the Court of Appeal decision, the Commissioner has set up a VD regime to encourage taxpayers to self-report the potential landholder duty liability that they might have taken an alternative position on prior to Oliver Hume.  

The VD amnesty program will run until 31 March 2025, with compliance activities commencing after this date. For VDs made before 31 March 2025: 

• all penalty tax will be remitted and  

• interest will only be imposed at the market and reduced 3% premium rates  

After this period, the Commissioner will commence a compliance program on capital raisings in landholders and impose penalties and interest on any landholder duty assessments identified.  

How SW can help 

The Victorian landholder duty landscape has changed significantly following Oliver Hume.  The Commissioner’s updated ruling further tightens the scope for arguments against the imposition of landholder duty.  Property funds and landholding entities looking to raise capital through a public raising process should pay close attention to the potential duty implications. Receiving the appropriate landholder duty advice before such transactions (before entering the contract to purchase the property) is critical to ensure that double duty does not arise.  

Property trusts that have had past capital raises should also review the transactions with their duty advisors to assess whether a voluntary disclosure should be made to take advantage of the amnesty program before the commencement of any SRO investigations.  

At SW, our stamp duty experts can assist you in assessing any past transactions and advise you on future transactions to achieve the most effective duty outcome.   

Please contact our state taxes team if you would like to discuss possible duty liabilities arising from capital raising participation. 

Contributors

William Zhang

Blake Trad 

Robert Parker

The post Oliver Hume Case update | State Revenue Office emboldened to review past capital raises for property trusts under an IM  appeared first on SW Accountants & Advisors.

The NSW and VIC Revenue Authorities have recently published harmonised revenue rulings (Revenue Rulings PTA-041) following similar rulings in QLD and SA. These rulings confirm the Revenue Authorities official position that payroll tax is likely to apply to payments made by medical practices to medical practitioners under the ‘relevant contracts’ payroll tax provisions irrespective of whether the fees under contractual arrangements are merely processed on behalf of the medical practitioner.

This ruling has far-reaching implications for medical centres, dental clinics, physiotherapy practices, radiology centres, and similar healthcare providers that have not been treating these payments as subject to payroll tax. We recommend that immediate action to assess compliance both retrospectively and on an ongoing basis as well as consider whether arrangements are optimally structured. If retrospective issues are found, employers can consider voluntary disclosure or amnesty/exemptions if available. The SW Team is here to guide you through these complex changes.

Introduction

Followed by rulings in QLD and SA, the Victorian State Revenue Office and Revenue NSW have issued rulings that may subject many medical practices to payroll tax on practitioner payments processed through the practices. We have provided links to each of the rulings below:

• NSW | PTA 041 Payroll Tax Act- Relevant Contracts – Medical Centres | Revenue NSW
• VIC | Relevant contracts – medical centres | State Revenue Office (sro.vic.gov.au)
• QLD | Public Ruling PTAQ000.6.1 Relevant contracts—medical centres – Queensland Revenue Office (qro.qld.gov.au)
• SA | PTASA003 | RevenueSA

These rulings, influenced by recent court decisions, aim to impose payroll tax on practitioner payments processed by medical practices which would not ordinarily be considered derived as income or treated as an expense when paid by the medical practices for income tax or accounting purposes. It casts a wide net, potentially impacting a broad spectrum of healthcare providers.

While it is important to recognise that the rulings are harmonised, meaning they are consistent across different jurisdictions, each jurisdiction has responded differently to the impact of the changes, with responses mainly in relation to General Practitioner (GP) medical practices. See below for details on concessions in ACT, SA, QLD and NSW.

The rulings provide clarity on the harmonised position adopted by the Revenue Authorities but also raises urgent concerns for medical practices. It applies to existing arrangements and can have retrospective effect depending on whether amnesty or an exemption is available.

Relevant contract provisions

The recent payroll tax rulings and court decisions centre around the application of the Relevant Contract provisions and understanding how these provisions work is essential for medical practices.

A relevant contract is an agreement that can be characterised as a contract for the performance of work, such as a service or contracting agreement. Prior to the recent court decisions, it was generally only payments that were directly referrable to services rendered which were treated as subject to payroll tax. This meant many medical practices may not have included payments distributed to practitioners as subject to payroll tax on the basis that patient fees were directly derived by the practitioners as income (though the collection and distribution of the patient fees was processed by the medical practice). The medical practice then earned its income from a proportion of patient fees charged by the medical practitioner as payment for administration and facility services.

In other words, the rulings and court decisions expanded the conventional understanding of the types of payments which could be subject to payroll tax.

The rulings have determined that if a medical centre engages a practitioner to practice from its premises, or if it provides patients with access to the medical services of a practitioner, a relevant contract likely exists. Payments while not derived or treated as income by the medical practice are considered taxable payments under the ‘relevant contract’ provisions.

In other words, the medical centre is deemed to be an employer, and the practitioner is deemed to be an employee, making any payments under the contract subject to payroll tax.

While the rulings have broadened the scope of what constitutes a relevant contract and the type of payments the provisions capture, certain exclusions may still apply to mitigate or eliminate payroll tax liability. The exemptions that are more likely to apply to a contract between a medical centre and a practitioner include:

• the practitioner providing services to the public generally (e.g. if the practitioner provides services to more than one medical practice)
• the practitioner performing work for no more than 90 days in a financial year
• services performed by two or more persons (e.g., a practitioner personally providing a nurse or assistant).

It’s essential for medical centres to carefully evaluate their contractual arrangements on a case-by-case basis to determine if the work performed by the medical practitioner is considered services for the practice, whether the payments are capture by the provisions and if so, whether any of these exclusions apply. Professional advice is recommended to ensure complete understanding and accurate compliance with these provisions, and whether arrangements should be re-structured or clarified on a go forward basis.

Medical centres should also consider whether the employment agent provisions may apply to the arrangement (meaning that the Relevant Contract exclusions do not apply).

It is important to note that there are a number of jurisdictions which have not issued the harmonised ruling and we briefly summarise the “state of play” in these jurisdictions:

• ACT – Has recently announced concessions for general practitioners so it is likely that a similar position is adopted
• NT and TAS – There has not been any indication in these jurisdictions as to whether a similar view will be adopted
• WA – The legislation in WA is significantly different and in a letter to the RACGP, confirmed that most General Practitioners will continue to be treated as independent contractors (i.e. not subject to payroll tax).

What concessions have been made available?

Certain concessions have been announced/offered in ACT, SA, QLD and NSW which we briefly outlined below:

• ACT – the ACT Government announced that payroll tax on payments made to General Practitioners (GP) is waived to 30 June 2023 with the compliance deadline extended to 2025. Further, an exemption to 30 June 2025 will be available for GP payments for practices which bulk bill 65 percent of all patients and have registered for MyMedicare. Applications will need to be made to the ACT Revenue Office by 29 February 2024
• SA – An amnesty is available on GP payments up to 30 June 2024 for designated medical practices that make a voluntary disclosure and register for payroll tax if necessary. Medical practices must comply with payroll tax obligations post 30 June 2024. Expressions of interest must be made by 30 September 2023
• QLD – An amnesty is available on GP payments up to 30 June 2025 for medical practices that make a voluntary disclosure prior to 30 June 2025 and register for payroll tax if necessary. Expressions of interest must be made by 29 September 2023
• NSW – the NSW Government announced that they will pause audits on medical centres for 12 months to consult with GP groups. Interest and penalties accrued will be paused.

Who is impacted?

• Medical centres not only including GPs
• Dental clinics, physiotherapy practices, radiology centres, optometrist centres
• Other allied healthcare providers contracting with medical, dental, and other health practitioners.

It should be noted that while the cases and rulings focus on the medical industry, it would not be inconceivable for the Revenue Authorities to apply the principles to other industries which rely on similar legal constructions for structuring work performed and payments. Examples could include veterinarian practices, personal trainers in commercial gyms or sports coaches, nail technicians in nail salons etc.

What is the impact?

Immediate action is required given the ruling’s retrospective and prospective application.

The impact will differ depending on whether the medical practice is a GP medical practice. 

All medical practices will need to consider how their medical practitioner arrangements should be treated under payroll tax law, whether payroll tax shortfalls arise on a retrospective basis and whether an increase in the payroll tax oncost is likely on an ongoing basis. If payroll tax shortfalls do arise there is a potential for interest and penalties to accrue which can be mitigated by making voluntary disclosures.

GP medical practices should consider the various concessions that are available to reduce any payroll tax shortfalls or ongoing oncost, as well as interest and penalties. In particular, practices should ensure that applications or expressions of interest have been lodged by the due date if relevant.

How can SW help?

Medical practices must review their current agreements to assess whether they evidence a relevant contract and consider whether agreements should be updated or changed and any voluntary disclosures which may need to be made (even if amnesty applies).

There are essentially three limbs for payroll tax to apply under the Relevant Contract provisions:

1. that services are provided to the medical centre
2. that there is a payment for payroll tax purposes and
3. whether an exclusion applies.

Each of these should be considered in the review of retrospective arrangements, but also with a view to compliance or risk mitigation on an ongoing basis.

The SW Team, with its expertise in tax law, is ready to assist you in navigating these complex changes. Our dedicated team can:

• conduct a comprehensive review of your existing agreements and structures
• provide tailored advice on compliance and potential exclusions
• work with the business to restructure arrangements to mitigate risk with ongoing payroll tax obligations
• assist with private rulings on for prospective arrangements with the SRO
• assist with voluntary disclosure if needed
• offer ongoing support to ensure alignment with the latest legal requirements.

Contact the SW Team today to schedule a consultation and ensure that your practice is prepared for these significant payroll tax implications. Our expert team is here to support you every step of the way.

The post Payroll tax implications for medical practices – are you prepared? appeared first on SW Accountants & Advisors.

Usual Land Tax Assessment process

Each Council/Shire engages a Licensed Valuer for the purpose of valuing each property in their municipality in respect of:

1. The Capital Improved Value (CIV) – Land plus any improvements
2. Site Value/Unimproved Land Value – Land Only

Previously, this was done every two years, however valuations are now done annually.

If you conduct any building activity including obtaining certain permits, the council/shire can issue an Amended Rates Notice at any time.

The Council/Shire will declare a range of rates during their annual budgeting process that will then been multiplied usually by the CIV to determine the annual council/shire rates payable by the land owner.

The rates will vary depending upon the use and the relevant planning scheme that applies to the land. For instance there will generally be different rates per dollar for:

1. Residential Land containing a dwelling
2. Vacant Residential Land
3. Industrial Land
4. Vacant Industrial Land
5. Farm Land
6. Native Vegetation etc.

Objecting a Council/Shire Rates Notice

You usually have 60 days to object to a Council/Shire Rates Notice from the issue date, with most objections being:

• Inappropriate valuation
• Assessed area being incorrect
• Incorrect classification/rate applied
• Property no longer owned etc.

The Council/Shire then provides the following two values to the SRO:

1. Site Value – used to produce the Land Tax Assessments
2. CIV – used to calculate Vacant Residential Land Tax

The 2021 Land Tax Assessments take into account land held at midnight on 31 December 2020 and use the value as prepared by councils in 2020.

Is your Land Tax assessment correct?

You also have 60 days to object to a Land Tax Assessment from the issue date.

In addition, as Land Tax is a self-assessment system you need to consider whether:

1. All the land you or the entity owns is included and the apportionment is correct
2. Dimensions and description of the land being valued are correct
3. Is any land which you have bought/sold disclosed?
4. If you receive multiple assessments for the same own – for instance individuals name may be spelt wrong etc
5. Any exemptions are correctly applied – for instance primary production land, principal place of residence, exempt status etc
6. Whether Absentee Owner Surcharge should be or should not be charged
7. Whether any Vacancy Residential Land Tax has been correctly assessed
8. Land subject to the Trust surcharge has been correctly assessed
9. Correct ownership is disclosed – Trust as opposed to Trustees etc.

It is often easier to object against the Council Rates Notice  as in essence this information is then fed through to the SRO.

Where the valuation is not appropriate, it is prudent to obtain supporting evidence which in many cases will  include a formal Valuation from a Property Valuer to support a lower and correct valuation.

There is a cost/benefit assessment to be done when lodging an objection.

How we can help

To assist you we can:

• Review the Land Tax Assessments to ensure that you are correct – remembering that it is a self-assessment system
• Consider whether the Site Value is appropriate and if not consider lodging an objection.

 “This year has seen Land Tax notices and due dates for payment issue much earlier than prior years. We have seen recent  Land Tax Assessments which are factually incorrect and the valuations that are not appropriate given the circumstances.

Given the movement in property values and tenancy issues, Land Tax assessments are significant and need to be reviewed.”

Daren McDonald 

Get in touch

The post Land Tax Assessments 2021 appeared first on SW Accountants & Advisors.