Updated August 2023

The Victorian Government has now introduced the Windfall Gains Tax (WGT) which commenced from 1 July 2023. With the new tax now in effect, landowners must be aware of any WGT they may be liable for and understand the implications of this new tax.

As previously explained, WGT it is a tax which applies to land that is rezoned and the rezoning results in an increase in value of more than $100,000 to the land.

What land does Windfall Gains Tax apply to?

The application of WGT will involve the rezoning of land to different zone rather than changes between schedules within the same zone. With the latter not constituting a windfall gains tax event.

There are a number of exemptions or exclusions from windfall gains tax:

  1. Residential land exemption
  2. Land entitled to a transitional exemption from windfall gains tax
  3. Land rezoned to or from the Urban Growth Zone within the Growth Areas Infrastructure Contribution (GAIC) area
  4. Charitable and university land
  5. Land rezoned to Public Land Zones
  6. Land rezoned to correct an obvious or technical error in the Victoria Planning Provisions or a planning scheme
  7. Land rezoned to a Rural Zone (other than the Rural Living Zone)

(Source, SRO 2023).

How is Windfall Gains Tax calculated?

The taxable value uplift is the difference in the capital improved value of the land before and after the rezoning takes effect, less any deductions. However, at this stage, no prescribe allowable deductions relating to reducing the taxable value uplift have been prescribed by the Government. Valuations, based on the capital improved value of land, will be undertaken by the Valuer-General Victoria on the pre-rezoning value and the post-rezoning value of land.

Aggregated Taxable Value UpliftWGT Rate
$0 to $100,000Nil
$100,001 to $499,99962.5% of uplift above $100,000
$500,000 or more50% of total uplift

The State Revenue Office has prepared a fact sheet that provides further information on how WGT is calculated and applied along with an example you can work through. Further, the SRO has created a Frequently Asked Questions page has also been created in relation to WGT.

Who pays Windfall Gains Tax and when is it payable?

The owner of the land is liable for any WGT and the liability arises at the time the rezoning occurs.

It is possible for landowners to defer payment of the liability until the earlier of:

  • 30 years after the rezoning
  • a dutiable transaction (other than certain excluded dutiable transactions) occurring in relation to the rezoned land
  • a relevant acquisition (other than certain excluded relevant acquisitions) occurring in respect of a landholder who is the owner of the rezoned land

The State Revenue Office will administer the WGT regime.  It is important to note that any deferred WGT liability will accrue interest daily at the 10-year bond rate and will also constitute a first charge on the relevant land, with the provision to include WGT information on property clearance certificates.

Contact Us

The introduction of WGT will have a significant impact on some landowners so it is important you are aware of this regime and how it may apply to you. Should you require further assistance in relation to WGT and how it may affect you, please contact your Davidsons team member on (03) 52216399 or at info@davidsons.com.au.

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This article was written by Tax and Business Services Manager Carolyn Grills-Harte.

Disclaimer: This information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.


Department of Treasury and Finance Victoria. (2022, February 24). WINDFALL GAIN TAX. Department of Treasury and Finance Victoria.

Windfall Gains Tax | State Revenue Office (sro.vic.gov.au)

Windfall gains tax — frequently asked questions | State Revenue Office (sro.vic.gov.au)