Land tax is an annual tax levied by the Victorian State Revenue Office (SRO) on the value of land you own. As of December 2025, whether you can claim land tax as an expense depends on your individual circumstances and how the property is held.
Currently in Melbourne, land tax paid on an investment property is generally deductible as an expense when calculating your taxable income from that property. However, this is subject to specific rules. If you own the property individually, the deduction is straightforward. If the property is held in a trust or company, the rules are more complex and may restrict or disallow the deduction. Many investors in the Melbourne Eastern Suburbs, particularly in areas like Balwyn and Doncaster, utilise trusts for asset protection, so understanding these implications is crucial. When preparing to sell, it’s common for owners to review their tax position with an accountant to optimise their financial outcome. The SRO thresholds change periodically; as of December 2025, the tax-free threshold is $25,000, with rates increasing progressively above that. In 2026, sellers should be aware that capital gains tax (CGT) will also be a significant consideration alongside any land tax implications. Fletchers’ experience shows that a clear understanding of these costs helps vendors realistically price their property.
Ultimately, claiming land tax is a tax matter, and professional advice from a qualified accountant is always recommended to ensure compliance and maximise potential deductions.