Property finance and windfall gains tax

The Windfall Gains Tax and State Taxation and Other Acts Further Amendment Act 2021 (Vic) (WGT Act) received Royal Assent on 30 November 2021. It will come into effect on 1 July 2023.

The WGT Act imposes a tax (WGT) on the increase in value of land resulting from a rezoning of that land (WGT Land) where the uplift value exceeds $100,000. Liability for WGT arises on the occurrence of a particular rezoning event, known as a ‘WGT event’ – there are some exceptions to the rezoning events that trigger WGT.

WGT is calculated by reference to the ‘taxable value uplift’ in land arising from a WGT event. The taxable value uplift is the difference between the value of the land before and after the WGT event. The applicable WGT rate depends on the uplift value. If the taxable value uplift is between $100,000 and $500,000, the rate of WGT is 62.5% of the uplift that exceeds $100,000. Whereas if the uplift is greater than $500,000, the rate of WGT is 50% of the entire uplift.

The WGT Act secures any unpaid WGT including accrued interest as a statutory charge over the WGT Land. This gives WGT priority over an existing or future registered mortgage or equitable charge, notwithstanding whether or not the WGT arose before or after the registration of the mortgage or the date of the equitable charge.

Among other deferral events, payment of WGT may be deferred until 30 days after the occurrence of a dutiable transaction under the Duties Act 2000 (Vic). If an election is made to defer payment of WGT until a dutiable transaction is triggered, interest accrues at the 10-year bond rate.

If a plan of subdivision is registered over WGT Land, WGT and any accrued interest are apportioned to each lot created under the subdivision by reference to the area each lot bears to all lots of the subdivision.

Property financiers should ensure appropriate due diligence is undertaken over both current and future property finance transactions to identify and account for any potential WGT.


If you have any questions about this article, please get in touch with the author or any member of our Banking & Finance, Corporate & Commercial or Tax teams.


This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.