What Land Value Is Used for Victorian Land Tax?

If you are trying to estimate Victorian land tax, choosing the correct property value is essential.

A common mistake is to use the property's purchase price, current market value or the value of the house and land combined. Victorian land tax generally does not use any of these figures.

Instead, land tax is generally calculated using the site value of your taxable Victorian land.

Site value represents the value of the land itself, excluding buildings and other capital improvements. If you own multiple taxable properties in Victoria, the relevant site values may also be combined before the applicable land tax rate is determined.

For the 2026 Victorian land tax assessment, the State Revenue Office uses valuations made as at 1 January 2025.

Understanding which value to use can make the difference between a useful land tax estimate and a calculation that is significantly misleading.

What Value Is Used for Victorian Land Tax?

Victorian land tax generally uses the property's site value, which may also appear as the taxable value on a land tax assessment.

Site value is essentially the value of the land without buildings and other capital improvements.

It is not normally the same as:

• the property's current market value

• the purchase price

• the value shown by an online property estimate

• the amount a bank might lend against the property

• the capital improved value

This distinction is important because the site value can be substantially lower than the overall market value of a developed property.

For example, an investment property might have:

For an ordinary Victorian land tax estimate, the relevant starting figure would generally be the $480,000 site value, not the $950,000 market value.

What Does Site Value Mean?

Site value refers to the value of the land itself, excluding capital improvements such as buildings.

Think of it as the underlying value of the land rather than the total value of the developed property sitting on it.

For a residential property, improvements might include:

• the house

• garage

• other buildings

• structural improvements

This is why two properties with similar market values may have very different site values.

For example, a newer house on a smaller parcel of land may have a high overall market value but a lower site value than an older property sitting on a large or more valuable parcel of land.

For land tax purposes, it is the relevant taxable site value that matters.

What Valuation Is Used for Victorian Land Tax in 2026?

For the 2026 land tax assessment, Victoria uses valuations made as at 1 January 2025.

This is an important detail because landowners sometimes use a current property value when trying to calculate their 2026 liability.

However, the valuation used for the land tax assessment is tied to the relevant statutory valuation date.

The State Revenue Office uses valuations determined by the Valuer-General Victoria.

This means a property's current sale price or a real estate agent's estimate in late 2026 is not necessarily the figure being used for the 2026 land tax assessment.

Where Can You Find Your Site Value?

You do not normally need to estimate the site's value yourself.

The relevant value can generally be found on:

• your Victorian land tax assessment

• your council rates notice

• My Land Tax

On your land tax assessment, the site value may be shown as the property's taxable value.

Using the figure from an official document is generally more appropriate than estimating the land component from the property's current market price.

If you are planning ahead before receiving an assessment, your latest council rates notice can be a useful starting point.

Site Value vs Market Value

Site value and market value are different concepts.

Market value generally reflects what the entire property could sell for in the open market.

For a residential property, that can include:

• the land

• the house

• renovations

• improvements

• location

• property condition

• buyer demand

Site value, by contrast, focuses on the underlying land and excludes capital improvements.

Consider this example:

A Melbourne investment property has:

Estimated market value: $1,100,000
Site value: $620,000

If the owner entered $1.1 million into an ordinary land tax calculation when the relevant taxable site value was $620,000, the estimated liability could be significantly overstated.

This is why checking the correct site value should be one of the first steps when estimating Victorian land tax.

Site Value vs Capital Improved Value

Another figure property owners may see on a council rates notice is the capital improved value, commonly called CIV.

Capital improved value generally represents the value of the land together with buildings and other capital improvements.

Therefore:

Site value = land without capital improvements

Capital improved value = land plus buildings and other capital improvements

For ordinary Victorian land tax, site value is generally the relevant figure.

However, capital improved value is important for some other Victorian property taxes.

A notable example is Vacant Residential Land Tax, which uses capital improved value rather than site value.

This distinction matters because ordinary land tax and Vacant Residential Land Tax are separate taxes.

Site Value vs Purchase Price

The amount you paid for a property is also not necessarily its land tax value.

Suppose an investor purchases a Victorian property for $850,000.

The purchase price reflects the property transaction as a whole. It may include the value of:

• the land

• residential buildings

• renovations

• other improvements

• market conditions at the time of sale

If the property's site value is $430,000, the ordinary land tax calculation would generally use the relevant taxable site value rather than simply using the $850,000 purchase price.

Therefore, investors should avoid assuming:

Purchase price = land tax value

They are different concepts used for different purposes.

How Do You Use Site Value in a Land Tax Calculation?

Once you have identified the correct taxable site value, you can use it to estimate land tax.

Suppose an investor owns one taxable Victorian property with a site value of $500,000 and the general rates apply.

The relevant general rate band is:

$300,000 to less than $600,000

The calculation is:

$1,350 + 0.3% of the amount over $300,000

The amount above $300,000 is:

$500,000 − $300,000 = $200,000

The percentage component is:

$200,000 × 0.3% = $600

Estimated general land tax:

$1,350 + $600 = $1,950

The key point is that the calculation begins with the correct taxable site value, not the market value of the whole property.

Property owners can also use a Victorian land tax calculator to make a general estimate once they have identified the correct land value and applicable rate.

What If You Own More Than One Property?

If you own multiple taxable Victorian properties, identifying the site value of each property becomes particularly important.

Relevant taxable holdings may be aggregated.

Consider an investor with:

For a simplified general calculation, the investor would not simply calculate each property as though it had no relationship to the others.

The combined taxable value may determine the applicable land tax rate.

In this example, the relevant combined taxable value is $1 million.

Under the general rates, the starting land tax amount at $1 million is $4,650.

This shows why an investor should identify the site value of all relevant taxable Victorian land when estimating potential liability.

Does Your Home's Site Value Count?

An eligible principal place of residence is generally exempt from Victorian land tax.

For example, assume someone owns:

If the principal residence qualifies for the relevant exemption, the $700,000 site value would generally not simply be added to the $500,000 taxable investment property for an ordinary land tax calculation.

The taxable value in this simplified example would therefore focus on the investment property.

However, eligibility conditions apply to the principal place of residence exemption.

Property owners should verify that an exemption actually applies rather than excluding a property based only on how they describe or use it informally.

What If the Property Value Has Increased?

Property values can change over time.

The site value used for land tax is determined through Victoria's valuation process rather than simply tracking the property's current asking price or recent comparable sales.

For the 2026 assessment, the relevant valuations were made as at 1 January 2025.

If the site value rises between assessment years, the taxable value used for future land tax assessments may also change.

This can affect property investors in two ways:

• a higher site value can increase taxable land value

• a higher combined taxable value can potentially move holdings into a higher rate band

Investors should therefore review the valuation shown on each new assessment rather than assuming the previous year's figure remains unchanged.

What If You Disagree With the Site Value?

Property owners are not necessarily required to accept a valuation without question if they believe it is incorrect.

Victorian land valuations are determined by the Valuer-General Victoria.

If you disagree with the site value used on your land tax assessment, there is a formal objection process.

Under current State Revenue Office rules, an objection to the valuation on a land tax assessment generally needs to be lodged within two months of the issue date on the assessment notice.

Importantly, lodging a valuation objection does not automatically suspend the requirement to pay the assessment by its due date.

If the valuation is later reduced, the assessment can be amended and any relevant overpayment dealt with accordingly.

Landowners considering an objection should check the current State Revenue Office requirements and time limits.

Why Might Site Value Change From One Year to Another?

Site value can change because land is revalued.

The Valuer-General Victoria determines land valuations each year.

Changes can reflect factors affecting the underlying value of the land, including changes in:

• local land values

• development potential

• planning conditions

• surrounding infrastructure

• market conditions

• characteristics of the site

This means your land tax can change even if:

• you have not sold the property

• you have not renovated the house

• your rental income has not changed

Land tax focuses on taxable land value and the applicable rate rather than the owner's rental income or mortgage balance.

Does Renovating a Property Increase Its Site Value?

Renovating a house does not automatically mean that the full cost of the renovation becomes part of the property's site value.

Remember, site value excludes capital improvements such as buildings.

However, property valuations are determined independently, and broader changes affecting the land's value can occur over time.

For land tax purposes, the practical approach is to use the official site value shown on the relevant assessment or council documentation rather than attempting to calculate the effect of individual renovations yourself.

Is Site Value the Same as Council Rates Value?

Council rates notices may show several valuation figures, which can create confusion.

Depending on the notice, you may see values such as:

• site value

• capital improved value

• net annual value

For Victorian land tax, the key figure is generally site value.

The State Revenue Office also uses the valuation information provided through Victoria's valuation system when determining land tax.

Therefore, simply taking the largest value displayed on a council rates notice may lead to the wrong land tax estimate.

Look specifically for site value.

What Value Is Used for Vacant Land?

Ordinary Victorian land tax on taxable vacant land also generally relies on site value.

Because vacant land may not have significant buildings or improvements, its site value may be closer to its overall property value than is the case for a developed residential property.

However, owners should still use the official relevant site value rather than assuming the purchase price or expected sale price is identical.

Vacant residential land may also raise separate Vacant Residential Land Tax considerations where the relevant conditions are met.

That is a separate tax with its own rules and calculation method.

Ordinary Land Tax vs Vacant Residential Land Tax

The difference between site value and capital improved value becomes especially important when comparing these two taxes.

Ordinary land tax generally looks at taxable site value.

Vacant Residential Land Tax uses the property's capital improved value.

The two taxes should therefore not be calculated using the same property value by default.

Using the wrong valuation type can significantly distort an estimate.

Common Mistakes When Choosing a Land Value

Using the Property's Market Value

The full estimated sale value generally includes buildings and improvements and is not the same as site value.

Using the Purchase Price

The amount paid to acquire a property is not automatically the taxable site value.

Using Capital Improved Value

CIV includes improvements. Ordinary Victorian land tax generally uses site value instead.

Using a Current Online Property Estimate

An online estimate may indicate potential market value, but it is not the official taxable site value.

Looking at Only One Property

Where multiple taxable Victorian properties are relevant, their taxable site values may need to be considered together.

Using the Wrong Year's Valuation

The valuation relevant to a particular land tax year may differ from the latest property estimate available today.

Frequently Asked Questions

What land value is used to calculate Victorian land tax?

Victorian land tax generally uses the site value of taxable land. Site value represents the value of the land excluding buildings and other capital improvements.

What valuation is used for 2026 Victorian land tax?

For 2026 land tax assessments, the State Revenue Office uses valuations made as at 1 January 2025.

Is Victorian land tax based on market value?

No. Ordinary Victorian land tax generally uses site value rather than the full market value of the property.

Is site value the same as purchase price?

No. Purchase price represents the amount paid for the property as a whole, while site value relates to the underlying land excluding capital improvements.

Where can I find my site's value?

You can generally find the site value on your council rates notice, Victorian land tax assessment or through My Land Tax.

Is capital improved value used for Victorian land tax?

Ordinary Victorian land tax generally uses site value. Capital improved value is relevant to Vacant Residential Land Tax and includes the value of buildings and other capital improvements.

What happens if I own multiple taxable properties?

The taxable site values of relevant Victorian properties may be combined, with the applicable land tax rate then determined using the total taxable value.

Can I challenge the site value used on my assessment?

There is a formal valuation objection process. Under current rules, objections to the site value shown on a land tax assessment generally need to be lodged within two months of the assessment notice being issued.

Final Thoughts

Using the correct land value is one of the most important steps when estimating Victorian land tax.

For ordinary land tax, the key figure is generally site value, not market value, purchase price or capital improved value.

For the 2026 land tax year, the State Revenue Office uses valuations made as at 1 January 2025.

Property owners should therefore start with the official site value shown on their relevant assessment or council rates notice, identify which properties are taxable and consider the total taxable value of relevant Victorian land holdings.

Using the correct value can make a land tax estimate far more meaningful.

However, exemptions, trusts, joint ownership and absentee owner rules can affect the final assessment. An online calculator should therefore be used as a planning tool rather than as a substitute for an official State Revenue Office assessment.

Disclaimer: This information is general in nature and does not consider your personal circumstances. Victorian land tax rules and valuations can change. Check current State Revenue Office Victoria information and seek professional advice where appropriate.