As part of the 2021 budget to be delivered on 20 May 2021, the Victorian Government has announced that it plans to introduce a new windfall gains tax on profits made by landowners where those profits are made as a consequence of planning decisions to rezone ex-industrial land, or create new residential estates.
The Victorian Government is expected to introduce legislation under which landowners (mostly developers) will face a windfall gains tax of up to 50% that will be applied to planning decisions to rezone land. These measures are set to apply from 1 July 2022.
The total value uplift from a rezoning decision will be taxed at 50% for windfalls above $500,000, with the tax phasing in from $100,000.
Exceptions will apply for instance to land subject to the Growth Areas Infrastructure Contribution.