Wednesday, 15 October 2025

 Danny PEARSON (Essendon – Minister for Economic Growth and Jobs, Minister for Finance) (10:45): In accordance with the Charter of Human Rights and Responsibilities Act 2006, I table a statement of compatibility in relation to the State Taxation Further Amendment Bill 2025:

In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006 (Charter), I make this Statement of Compatibility with respect to the State Taxation Further Amendment Bill 2025.

In my opinion, the State Taxation Further Amendment Bill 2025 (Bill), as introduced to the Legislative Assembly, is compatible with the human rights as set out in the Charter. I base my opinion on the reasons outlined in this Statement.

Overview

The Bill makes a number of amendments to the Building Act 1993 (Building Act), Commercial and Industrial Property Tax Reform Act 2024 (CIPT Act), the Congestion Levy Act 2005 (CGL Act), the Domestic Animals Act 1994, the Duties Act 2000 (Duties Act), the First Home Owner Grant and Home Buyer Schemes Act 2000, the Land Tax Act 2005 (Land Tax Act), the Limitation of Actions Act 1958 (LA Act) and the Taxation Administration Act 1997 (TA Act). The Bill also repeals the Taxation (Interest on Overpayments) Act 1986 and makes consequential amendments to the Planning and Environment Act 1987 and the Development Victoria Act 2003.

Many provisions of the Bill do not engage the human rights listed in the Charter because they merely clarify the operation of the law, do not affect natural persons, or they operate beneficially in relation to natural persons.

Human rights issues

The rights under the Charter that are relevant to the Bill are the right to property, the right to privacy, the right to recognition and equality before the law and the right to protection from retrospective criminal laws.

Right to property: section 20

Section 20 of the Charter provides that a person must not be deprived of his or her property other than in accordance with law. This right requires that powers which authorise the deprivation of property are conferred by legislation or common law, are confined and structured rather than arbitrary or unclear, are accessible to the public, and are formulated precisely.

The right to property under section 20 of the Charter will be limited when all three of the following criteria are met:

• the interest interfered with must be ‘property’

• the interference must amount to a ‘deprivation’ of property, and

• the deprivation must not be other than ‘in accordance with law’.

In PJB v Melbourne Health (Patrick’s Case) ([2011] VSC 327 at [87]), Bell J observed that in the Charter, ‘neither “property” nor “deprived” is defined. On first principles, these terms would be interpreted liberally and beneficially to encompass economic interests and deprivation in a broad sense. “In accordance with law” has a particular meaning in this context.’ Money paid as State taxes is deemed to be property under its ordinary definition.

Building Act amendments

The purpose of the clauses in Part 10 of the Bill is to amend the Building Act so as to:

1. clarify the how the cost of the building work is to be calculated for purposes including the imposition and collection of the building permit levy under Part 12 of the Building Act; and

2. retrospectively validate all past estimates of the cost of building work, the calculation, imposition and collection of building permit levies in the past and all past actions, matters and things taken, arising or done based on those estimates, calculations, impositions and collections of the building permit levy.

The clauses in Part 10 of the Bill have been included as part of a response to the decision made in May21 Pty Ltd v Building Appeals Board [2023] VSC 203, which was affirmed by the Court of Appeal in Victorian Building Authority v May21 Pty Ltd [2024] VSCA 150 (the May21 Decision). The May21 Decision concerned Subdivision 4 of Division 2 of Part 12 of the Building Act which provides for a scheme by which a building permit levy must be calculated and paid before a building permit can be issued. Specifically, the matter considered the basis on which the cost of building work should be estimated by a relevant building surveyor, which has implications for the calculation of the building permit levy by the Victorian Building Authority (VBA) under sections 205I and 205G of the Building Act.

As a result of the May21 Decision, it became clear that the provisions in Division 2 of Part 12 of the Building Act could be improved to ensure that all relevant building surveyors calculate the cost of the building work in a consistent manner. The clauses in Part 10 of the Bill amend various provisions in Division 2 of Part 12 of the Building Act to give effect to this intent.

To the extent the May21 Decision raised doubt about the validity of past estimations of the cost of building work made by relevant building surveyors, or past calculations of the amount of building permit levy payable made based on those estimates, Part 10 of the Bill provides for the retrospective validation of all past estimates of the cost of building work and all past calculations, impositions and collections of the building permit levy. The validation provisions affect all calculations, impositions and collections up to the day on which new section 260A of the Building Act comes into operation.

Part 10 of the Bill inserts new section 260A in the Building Act. This provision retrospectively validates:

• previous estimates of the cost of building work calculated by the relevant building surveyor under the Building Act (section 260A(1)(a));

• previous calculations made under the Building Act of an amount of building permit levy (sections 260A(1)(b), (c) and (d));

• amounts of the building permit levy, and amounts of any penalty levies, previously imposed under the Building Act (sections 260A(1)(e), (f) and (g));

• previous collections, receipts of and recoveries of the building permit levy and any penalty levies (sections 260A(1)(h) and (i));

• previous reassessments made under the Building Act of an amount of the building permit levy (sections 260A(1)(j), (k) and (l));

• previous actions, matters or things taken, arising or done as a result or consequence of, or in reliance upon, an estimate, calculation, imposition, collection, receipt or recovery referred to in section 260A(1) (section 260A(2)).

New section 260A(3) expressly provides that section 260A does not affect a proceeding relating to an estimate, calculation, imposition, collection, receipt or recovery where the proceeding is commenced but not finally determined before the day on which the motion for the second reading of the Bill for the State Taxation Acts Further Amendment Act 2025 is moved in the Legislative Assembly.

The right to bring a claim constitutes property

While the Victorian courts have not determined whether the right to bring a claim against the State constitutes ‘property’ for the purposes of section 20 of the Charter, the Supreme Court has indicated that the term should be ‘interpreted liberally and beneficially to encompass economic interests’. As such, any accrued right to bring an action for the refund of part of a levy which may have been invalidly imposed by the State may be argued to constitute a property right for the purposes of section 20 of the Charter.

Deprivation of property

Further, the Supreme Court has noted that the term ‘deprivation’ should be construed in a similarly broad sense. New section 260A has the effect of altering any accrued rights to bring an action. Removing the grounds on which a claim could be brought could arguably constitute a deprivation of property under section 20 of the Charter.

The deprivation of property is ‘in accordance with law’

However, any deprivation of property is ‘in accordance with the law’ where the law providing for the legal authorisation for the deprivation is ‘publicly accessible, clear and certain’. New section 260A meets these requirements. Further, the retrospective application of these provisions will not, in of itself, contravene the lawfulness requirement.

Existing case law (PJB v Melbourne Health (2011) 39 VR 373) also requires that it be shown that the Bill does not operate arbitrarily. In the context of discussing the meaning of ‘arbitrary’ in section 13(a) of the Charter, the Court of Appeal said that a law is arbitrary where it is capricious, unjust, unpredictable or unreasonable in the sense of not being proportionate to a legitimate purpose in (WMB v Chief Commissioner of Police (2012) 43 VR 446). In my view, the new section 260A of the Building Act is proportionate to the legitimate purpose of the retrospective validation of the estimations, calculations, impositions, actions, matters or things referred to in new section 260A(1) and (2) for the following reasons.

There is a significant public interest in limiting the exposure of the VBA to claims for recovery of part of a levy on the basis of invalid levy calculation. The VBA is reliant on the building permit levy as a significant source of its revenue for the delivery of its regulatory work which includes providing assistance and protection to consumers through its dispute resolution functions and, regulation of the behaviour of industry participants. Drawing a line under all previous estimates of the cost of building work will ensure that the money collected via the building permit levy can continue to be put towards the regulatory work of the VBA rather than toward defending cases about how the cost of building work was estimated by relevant building surveyors.

There would also be significant resource and feasibility implications were the VBA to be required to review all previous instances where the building permit levy has been paid to determine whether the cost of the building work was accurately estimated by the relevant building surveyor. This is because the VBA, when calculating the building permit levy (under section 205I of the Building Act) relies on the accuracy of the estimates of the cost of building work produced to it by the relevant building surveyor. The VBA does not engage or control relevant building surveyors and it does not test the estimates produced by them. Therefore, the VBA has not collected data concerning how these estimates have been calculated in each instance where a building permit levy has been charged. For this reason, it is not possible for the VBA to ascertain whether the estimates of the cost of building work relied on by the VBA when calculating the building permit levy may have been affected by error.

The nature and extent of any limitation on rights is estimated to be low. The number of persons whose rights would be practically affected by the validation provision is likely to be relatively small. Importantly, the provision will not affect the rights of any person who has proceedings on foot at the time when the Bill is moved in the Legislative Assembly (section 260A(3)). Further, noting that the May21 Decision was made by the Supreme Court in 2023, there has been a period of more than two years in which a person who believed that the calculation of their building permit levy was affected by an inaccurate estimate of the cost of the building work, may have commenced proceedings. Accordingly, I do not consider it likely that there will be a significant number of persons who, having not so far chosen to exercise their right to commence proceedings, would, but for new section 260A of the Building Act, subsequently commence proceedings. Moreover, the LA Act imposes a 12-month limit for persons to commence proceedings to recover monies paid that constitute a tax or an amount attributable to tax for the purposes of section 20B of that Act.

On this basis, I do not consider that new section 260A of the Building Act will operate arbitrarily. Any deprivation of property under this provision is therefore ‘in accordance with law’ and does not limit the right to property in section 20 of the Charter.

CGL Act amendments

Clause 10 of the Bill amends the CGL Act to increase the congestion levy rate for category 1 and category 2 levy areas. Clauses 9, 16 and 17 of the Bill amend the CGL Act to expand the current category 2 levy area. These amendments may engage the right to property as car parks owned by natural persons may be subject to increased congestion levy rates or become liable for congestion levy when they were not previously.

However, to the extent that a natural person’s property rights is affected by these amendments, any limit is in accordance with the law, which is clearly articulated, not arbitrary, and sufficiently precise to enable affected natural person levy payers to inform themselves of their legal obligations and to regulate their conduct accordingly.

Duties Act and Land Tax Act amendments: New Zealand citizens

Part 4 of the Bill amends the Duties Act to introduce a requirement that New Zealand citizens must ordinarily reside in Australia after a relevant transfer of property in order to be exempt from the Foreign Purchaser Additional Duty (FPAD). Clause 31 of the Bill amends the meaning of natural person absentee in the Land Tax Act with the effect that New Zealand citizens who are merely present in Australia on 31 December but are not ordinarily resident in the year preceding the tax year will become liable for Absentee Owner Surcharge (AOS). These amendments may engage the right to property as New Zealand citizens that were previously not liable for the FPAD or AOS, may now be liable if they do not meet the amended residence conditions.

However, to the extent that a natural person’s property rights is affected by these amendments, any limit is in accordance with the law, which is clearly articulated, not arbitrary, and sufficiently precise to enable affected natural person taxpayers to inform themselves of their legal obligations and to regulate their conduct accordingly.

LA Act amendments

Clauses 43 and 44 of the Bill amend the LA Act to clarify that section 27 of the LA Act, which allows for a postponement of limitation periods in case of fraud or mistake, does not apply to the limitation period provided for in section 20A(2) of the LA Act.

The purpose of the amendment is to remove any uncertainty about the operation of the limitation periods contained in section 20A(2) and section 27 of the LA Act, and to unequivocally clarify that section 27 does not affect proceedings to which section 20A(2) applies. In so doing, this confirms the original and current intention of section 20A(2).

Section 27 is an original provision of the LA Act. Its purpose is to postpone the commencement of time of limitation periods in cases of fraud and mistake until such time as the plaintiff had discovered the fraud or mistake, or could, with reasonable diligence have discovered it. Section 20A was subsequently inserted into the LA Act by the Limitation of Actions (Recovery of Imposts) Bill 1961 following contemporaneous challenges to the validity of certain government charges and following a decision of the High Court that a New South Wales (NSW) plaintiff was entitled to the recovery of payments made to the NSW government over a period of approximately 17 months.¹

At the time, parliament was informed that the insertion of section 20A addressed a risk that a successful challenge to the validity of a government tax or other impost could affect the ability of the State to ‘meet the claims upon it and at the same time carry on the ordinary financial administration of the State.’ Inserting section 20A into the LA Act addressed this concern and established that ‘actions for the recovery of moneys paid as taxes or other imposts should be limited to the recovery of sums paid within twelve months before the commencement of the action.’ If section 27 was intended to apply to section 20A at the time it was inserted into the LA Act, then section 20A would have no work to do.

In consideration of the history of section 27 of the LA Act and the intended operation of section 20A, it is my view that the proposed amendment to section 27 of the LA Act does not limit the right to property as the amendment does nothing more than confirm the existing operation of the law as parliament intended it to operate upon commencement of section 20A.

Notwithstanding the above, to the extent it may be considered that the amendment to section 27 of the LA Act does limit the right to property, the laws that permit or require a deprivation of property should not operate arbitrarily. Accordingly, an assessment of compatibility will depend upon the extent to which a deprivation of property does not operate arbitrarily and is sufficiently clear and certain to be considered ‘in accordance with the law’.

Both section 20A and section 27 of the LA Act operate as a bar to remedy, by establishing the time period after which a plaintiff is not entitled to the recovery of past money paid – in effect this deprives the prospect of recovery of past payments made.

The right to property protects the right of all persons to own property (alone or with others) and provides that people have a right to not be arbitrarily deprived of their property. Whether property is deprived arbitrarily will depend on whether the property is removed in a way that is capricious, unjust or unreasonable in the sense of being disproportionate to a legitimate aim sought. The amendment of section 27 does not prohibit a plaintiff from seeking to recover money paid by way of tax or purported tax or by way of an amount that is attributable to tax if the plaintiff so chooses to challenge the validity of that tax or purported tax. It does however put beyond doubt that the limitation period for doing so is 12 months from the date of payment.

The balance between the importance of the purpose of the Bill must be considered against the importance of preserving the human rights, taking into account the nature and extent of the limitation. The purpose of the amendment of the LA Act is to provide certainty to the community and to the Victorian Government as to the applicable limitation period that would apply to permit a challenge to the validity of a government tax. In so doing, this ensures there is a level of certainty in the ability of Government to allocate public revenue to support effective economic management, the development and maintenance of public infrastructure and services for the community in a predictable fashion. The countervailing outcome is that this amendment confirms the limit of time in which an individual may be entitled to recover past payments for an invalid tax. In consideration of the broad public benefit of ensuring certainty to Government expenditure, I consider this limitation to be proportionate, reasonable and justifiable.

It is my opinion that there are no less restrictive and reasonably available ways to achieve the purpose of clarifying beyond doubt the intended operation of the LA Act. It is reasonable and justifiable for there to be time limits on the recovery of past payments of taxes to ensure the orderly and predictable functioning of Government and the delivery of services and infrastructure projects that are funded by those payments. If no such time limit existed, this could result in the arbitrary deprivation of property. If such time limits were too long, this could restrain the funding of such projects due to potential funding uncertainty. A limitation period of 12 months ensures prospective plaintiffs have ample time to bring a proceeding should they so choose, while also avoiding the uncertainty that an indefinite limitation period provides.

In my opinion, the potential impact of clarifying beyond doubt the operation of section 27, with respect to section 20A(2) on an individual’s property rights is outweighed by the benefits to the State and its citizens in that it protects the ability to allocate capital to services and infrastructure projects of broad public benefit. In reaching this view, it is significant that taxes are recovered for this purpose and that this purpose is consistent with a free and democratic society based on human dignity, equality and freedom.

Right to privacy: section 13

Section 13(a) of the Charter provides that every person has the right to enjoy their private life, free from interference. This right applies to the collection of personal information by public authorities. An unlawful or arbitrary interference to an individual’s privacy will limit this right.

CGL Act amendments

Clauses 14 and 15 of the Bill requires owners of private and public car parks within the expanded category 2 levy area to register with the Commissioner of State Revenue (Commissioner) for the congestion levy.

To the extent that the collection of any personal information from a natural person in relation to these car park registrations may result in interference with a natural person’s privacy, any such interference will be lawful and not arbitrary as these provisions do not require that a person’s personal information be published. Further, these provisions only require the provision of information necessary to achieve the purpose of determining a person’s liability to congestion levy which is exclusively in the levy payer’s possession. Therefore, there are no other reasonable means available to achieve this purpose.

Duties Act and Land Tax Act amendments: New Zealand citizens

Clause 20 of the Bill amends the Duties Act to impose notification requirements on New Zealand citizens upon becoming aware of certain circumstances that affect their liability to FPAD. Additionally, clause 31 of the Bill amends the Land Tax Act definition of natural person absentee in relation to New Zealand citizens such that individuals who are not currently subject to notification obligations under the Land Tax Act may be required to lodge an absentee owner notification with the Commissioner.

To the extent that the collection of any personal information from a natural person in relation to these notification requirements may result in interference with a natural person’s privacy, any such interference will be lawful and not arbitrary as these provisions do not require that a person’s personal information be published. Further, these provisions only require the provision of information necessary to achieve the purpose of determining a person’s liability to FPAD and AOS which is in the taxpayer’s possession. There are no other reasonable means available to achieve this purpose.

TA Act amendments

Clause 45 of the Bill amends the TA Act to include the Valuer-General Victoria (VGV) as an authorised recipient of information obtained under or in relation to the administration of a taxation law. The types of information that may be disclosed include, but are not limited to, information regarding land ownership and land use. These amendments are necessary to improve the quality of data held by the VGV and the State Revenue Office (SRO), help achieve efficiencies in the way the SRO receives data from the VGV and support the SRO’s administration of taxation and levies.

Permitted disclosures are subject to considerable legislative safeguards. In particular, section 94 of the TA Act prohibits ‘secondary disclosure’, that is, on-disclosure of any information provided by a tax officer under section 92, unless it is for the purpose of enforcing a law or protecting public revenue and the Commissioner has consented, or a disclosure made with the consent of the person to whom the information relates (or at the request of a person acting on behalf of that person). Further, section 95 provides that an authorised officer is not required to disclose or produce in court any such information unless it is necessary for the purposes of the administration of a taxation law, or to enable a person to exercise a function imposed on the person by law.

Accordingly, to the extent that these provisions could interfere with a person’s privacy, any interference would not constitute an unlawful or arbitrary interference.

Right to recognition and equality before the law: section 8

Section 8(3) of the Charter provides that every person is equal before the law and is entitled to the equal protection of the law without discrimination. Discrimination, under section 6 of the Equal Opportunity Act 2010, includes discrimination on the basis of a person’s nationality.

Duties Act and Land Tax Act amendments: New Zealand citizens

Part 4 of the Bill amends the Duties Act to impose FPAD on New Zealand citizens who do not satisfy a residence requirement in relation to certain transfers of property and to notify the Commissioner of circumstances affecting their liability to FPAD. Additionally clause 31 amends the definition of natural person absentee in the Land Tax Act to include certain New Zealand citizens making them liable to AOS and subject to absentee owner notification requirements.

The Charter implications of the original AOS and FPAD provisions were addressed in the Statement of Compatibility accompanying the State Taxation Acts Amendment Bill 2015. Given that FPAD and AOS differentiate between taxpayers’ liability on the basis of a person’s citizenship, Part 4 and clause 31 of this Bill may limit a natural person’s right to equal protection of the law without discrimination.

However, any limitation on those rights would be reasonable and justified in accordance with section 7(2) of the Charter because the amendments are required to ensure that New Zealand citizens who are not ordinarily resident in Australia are subject to FPAD and AOS consistent with other foreign purchasers of property and absentee owners of land. The amendments are consequently necessary to achieve the underlying purpose of collecting surcharge rates of land tax from absentee owners of land, which is to improve housing affordability for Victorians and to fund vital infrastructure by increasing the cost of holding land for foreign persons in the Victorian residential housing market. Differential treatment of foreign natural persons is necessary to achieve this purpose. The Bill ensures that this purpose can be achieved and further ensures citizens of all foreign countries are placed in the same position under Victorian law, limiting the extent of any discrimination between citizens of different foreign countries. There are no less restrictive means reasonably available to achieve these purposes.

Right to a fair hearing: section 24

Section 24(1) of the Charter provides that a party to a civil proceeding has the right to have that proceeding decided by a ‘competent, independent and impartial court or tribunal after a fair and public hearing’. The right may be limited if a person faces a procedural barrier to bringing their case before a court, or where procedural fairness is not provided.

This Bill removes the basis for any legal claims for a monetary refund or compensation in specified circumstances. It affects the substance of relevant civil claims by removing the underlying cause of action, meaning there remains no civil right over which a court may exercise jurisdiction.

It is well recognised that judicial determination of a person’s civil rights and liabilities is a crucial element of the fair hearing right. This right will be engaged where a person is prevented from having their civil rights or liabilities in a proceeding considered by a court. However, this right does not prevent the State from amending the substantive law to alter the content of those civil rights.

As such, I consider that the Bill does not engage or limit the right to a fair hearing in section 24 of the Charter.

Retrospectivity: section 27

Section 27 of the Charter is concerned with the retrospective operation of criminal laws. It provides that a person has the right not to be prosecuted or punished for things that were not criminal offences at the time they were committed.

CIPT Act and Duties Act amendments

Part 2 of the Bill amends the CIPT Act and Division 3 of Part 4 of the Bill amends the Duties Act to make minor clarifications to those Acts which take effect from 1 July 2024. These provisions do not amend any criminal laws and therefore section 27 of the Charter is not engaged. In any event the amendments are necessary to ensure that only certain transactions enter the commercial and industrial property reform scheme under the CIPT Act, and attract appropriate exemptions under the Duties Act on a subsequent transfer, as has always been intended.

Conclusion

For these reasons, in my opinion, the provisions of the Bill are compatible with the rights contained in sections 8, 13, 20, 24 and 27 of the Charter.

Hon. Danny Pearson

Minister for Finance

¹ For example Mason v New South Wales [1959] HCA 5 – 102 CLR 108, and Dennis Hotels Pty Ltd v Victoria [1960] HCA 10.

 Danny PEARSON (Essendon – Minister for Economic Growth and Jobs, Minister for Finance) (10:45): I move:

That this bill be now read a second time.

I ask that my second-reading speech be incorporated into Hansard.

Incorporated speech as follows:

The Bill amends several taxation-related laws to enhance the integrity and sustainability of the tax system. The Bill also delivers reforms to the congestion levy to reduce traffic congestion in central Melbourne and surrounding suburbs, as announced in the 2024–25 Budget Update.

Vacant residential land tax

The Bill amends the Land Tax Act 2005 (Land Tax Act) to exclude residential land in Dinner Plain village from vacant residential land tax (VRLT). This change recognises that accommodation in this area is likely to be vacant for more than 6 months of the year but is unsuitable for long-term residential use. Alpine resort areas have been excluded from VRLT since the tax expanded statewide from 1 January 2025. Dinner Plain is the only Victorian village located at a similar altitude to Victoria’s alpine resorts and has a similar climate, local economy and level of amenities. However, as Dinner Plain properties are predominantly under freehold ownership, VRLT applies to vacant properties in this area. This amendment applies retrospectively from 1 January 2025 when VRLT expanded statewide. The SRO will identify and contact exempt Dinner Plain owners who paid VRLT to arrange refunds.

The Bill changes the VRLT notification date from 15 January to 15 February each calendar year. Currently, owners must notify the SRO in writing if residential land they own was vacant in the previous year, and apply for certain VRLT exemptions, before 15 January. Moving the deadline to 15 February will provide more time for taxation obligations to be met by taxpayers and their legal or tax representatives. This amendment will commence from the day after Royal Assent for the 2026 land tax year.

The Bill introduces a VRLT exemption for land with a residence under construction or renovation, or an uninhabitable residence, at any time during the year prior to the tax year. This ensures that VRLT is not imposed on a residence that was unavailable for occupation for a significant part of the year. This exemption will operate in addition to an existing exemption for construction or renovation being undertaken for a longer period on land. The new exemption does not impose a minimum period of construction or renovation to simplify administration and maintain consistency with similar exemptions. The amendment will take effect from the day after Royal Assent for the 2026 land tax year.

Land tax exemption for low-value land with non-permanent shelter

The Bill amends the Land Tax Act 2005 (Land Tax Act) to introduce an exemption from land tax for land valued less than $300,000 containing a non-permanent shelter used as the owner’s residence. While a principal place of residence (PPR) is normally exempt from land tax, the PPR exemption requires a residential building to be affixed to the land that is lawful to use as a place of residence. Therefore, land with a non-permanent shelter such as a caravan or tent does not qualify for a PPR exemption. This has a disproportionate impact on those who may not have the means to build a home on their property. The new exemption will have similar requirements to the PPR exemption. In addition, the land’s site value must be less than $300,000, the owner must own no other land, and the land must have a non- permanent residence being used by the owner or a vested beneficiary of a fixed trust. However, partially built homes or non-residential properties will not be able to receive an exemption. Residential use requirements will align with the existing PPR exemption requiring the land to be used as a PPR since 1 July in the previous year, with some narrow exceptions. The amendment will take effect from the day after Royal Assent for the 2026 land tax year.

Application of certain tax measures to New Zealand citizens

The Bill amends the Duties Act 2000 (Duties Act) and Land Tax Act to clarify how foreign purchaser additional duty (FPAD) and the absentee owner surcharge (AOS) apply to citizens of New Zealand. FPAD and AOS target foreign and absentee owners who do not reside in Australia permanently, and therefore they do not apply to permanent residents of Australia or holders of special category visas. Special category visas are exclusive to New Zealand citizens and enable the visa holder to live in Australia indefinitely. Unlike other visas, a special category visa ceases when the New Zealand citizen leaves Australia but a new special category visa can be granted on each re-entry. This creates anomalies in the application of FPAD or AOS. For example, New Zealand citizens who ordinarily reside in Australia can be liable for FPAD or AOS if they are outside Australia on the relevant liability date. Also, New Zealand citizens who ordinarily reside overseas can avoid FPAD or AOS by travelling to Australia briefly so that they hold a special category visa on the liability date. To address these issues, the amendments broadly align the status of New Zealand citizens with other foreign citizens. To be excluded from FPAD, a New Zealand citizen will need to satisfy a requirement to ordinarily reside in Australia for a continuous period of at least 6 months in a period commencing 12 months before the date of the dutiable transaction or relevant acquisition and ending 12 months after that date. To be excluded from AOS, a New Zealand citizen will need to be ordinarily residing in Australia and not be absent from Australia on 31 December in the year immediately preceding the tax year, or for a total period of at least 6 months in the year immediately preceding the tax year. This amendment will commence from the day after Royal Assent.

The Bill also amends the First Home Owner Grant and Home Buyer Schemes Act 2000 (FHOGHBS Act) to remove the requirement for citizens of New Zealand to hold a special category visa to be eligible for the First Home Owner Grant (FHOG). As with FPAD and AOS the operation of special category visas can make NZ citizens ineligible for the FHOG if they are outside Australia at the time their eligible transaction is completed. For the build of a new home, the completion date is when the occupancy permit is granted. To confirm a New Zealand citizen’s residency in Australia, they will still be required to meet the existing 12-month residence requirement that applies to all FHOG applicants. This amendment will commence from the day after Royal Assent.

Other duties-related amendments

The Bill amends the Commercial and Industrial Property Tax Reform Act 2024 and Duties Act to provide that for direct transfers of land to enter the commercial and industrial property tax (CIPT) reform, duty must be payable on 50% or more of the dutiable value of the property. The broad intention of the CIPT reform scheme is for commercial or industrial land to enter the CIPT reform on a transaction of land, or an interest of 50% or more in land, where full duty is paid on the interest acquired. One of the existing requirements for an entry transaction is that it not be eligible for a Duties Act 2000 exemption. However, there are some scenarios where duty is reduced other than by an exemption – for example, if dutiable value is reduced through a partition of land, or where duty is only payable on the value of property in excess of the entitlement of a beneficiary of a unit trust or a deceased estate. These transactions can trigger entry into the CIPT reform even though nil or nominal duty is payable. The Bill amends the entry test to require duty to be payable on 50% or more of the dutiable value. This aligns best with the policy intent of the CIPT reform and is consistent with the existing landholder acquisition entry test. The amendment will apply retrospectively to transactions from 1 July 2024 when the CIPT reform commenced.

The Bill amends the Duties Act to introduce an exemption for transfers of bare legal title between a trustee and custodian, such as the appointment or change of a custodian, a transfer back to the trustee or appointment of a sub-custodian or nominee. Custodian transfers are intended to be exempt from duty since they represent administrative restructures rather than changes to the underlying beneficial ownership of dutiable property. The SRO currently exempts custodian transfers as changes of trustee but introducing a dedicated exemption will ensure the benefit is more tailored to custodian arrangements, giving greater certainty to taxpayers. The amendment will commence from the day after Royal Assent.

Amendments to tax processes

The Bill amends the FHOGHBS Act to deem a document sent electronically by the Commissioner of State Revenue (Commissioner) to be served when the communication is received. The amendment aligns the electronic service rules for the FHOGHBS Act with the Taxation Administration Act 1997 (TAA) to ensure consistency. The measure is intended to avoid the discrepancy that can currently result when documents are served on a person under both Acts at the same time. This discrepancy can result in different timeframes for objections and appeals in relation to different aspects of a particular electronic communication. The amendment will take effect from the day after Royal Assent.

The Bill amends the Land Tax Act to raise the threshold for the Land Tax Hardship Relief Board (Board) to consider applications from $1,000 to $5,000 and remove the requirement for the Treasurer to approve the Commissioner’s grants of relief. The Land Tax Act gives the Commissioner discretion to grant hardship relief to landowners for assessments of $1,000 or less in a single year. The Board must consider all hardship relief applications for amounts over $1,000. Raising the threshold to $5,000, and removing the requirement for the Treasurer to approve the Commissioner’s waivers of land tax, will enable the Commissioner to consider a greater range of hardship applications, helping to reduce turnaround time for vulnerable taxpayers. This amendment will commence from the day after Royal Assent.

The Bill amends the TAA authorising the SRO to share tax-related information with the Valuer-General Victoria (VGV). This amendment will facilitate the administration of Victorian tax and revenue laws and protect public revenue. Any information sharing with the VGV will be conducted under the strict protections and safeguards provided by the TAA’s secrecy provisions. Importantly, the information shared is at the discretion of the Commissioner. The amendment is not intended to lead to the VGV gaining full access to taxation data, only the information required to facilitate the administration of revenue laws. In this way, the amendment preserves the independence of the VGV and the SRO in undertaking their respective legislative functions. This amendment will commence from the day after Royal Assent.

The Bill repeals the Taxation (Interest on Overpayments) Act 1986, which contains provisions requiring the Commissioner to pay interest on refunds to taxpayers following a successful objection or appeal. These provisions have been codified as part of the TAA. The Taxation (Interest on Overpayments) Act 1986 no longer has any application because all historical objections, appeals and refunds have been finalised. The amendment will take effect from the day after Royal Assent.

Other amendments

The Bill also contains amendments related to tax and revenue raised under other Victorian legislation.

Building Act

The Bill also amends the Building Act 1993 (Building Act) to ensure that the method of calculating the building permit levy is clear and fit for purpose. The amendments establish a clear calculation method going forward, validate the calculation and imposition of the levy in the past and make other consequential amendments to ensure smooth operation of the building permit levy scheme.

The Building Act currently requires building permit applications to specify the contract price for the proposed building work for the Relevant Building Surveyor to estimate the cost of building work. The Victorian Building Authority, currently trading as the Building and Plumbing Commission, is required to calculate the levy payable based on the surveyor’s estimate of the cost of the building work. This reliance on cost estimations has caused uncertainty about levy calculations for the building industry, its consumers and the Commission.

The Bill will require the surveyor to calculate the cost of the building work using a prescribed formula, rather than “estimating” this cost. The cost of building work will be the sum of the contract price or agreed or estimated amount to be paid to the builder for carrying out the building work, including the cost of labour and material and including GST, less the cost of any chattels and any prescribed excluded items included in the contract or agreement. The formula is slightly different in relation to the building work carried out by an owner-builder.

GST is expressly included for the avoidance of doubt, as the cost of the building work is intended to relate to the costs incurred by the land or building owner. The term “chattel” will retain its common law meaning and the exclusion of chattels from the cost of building work is intended to exclude goods and building materials that are not permanently affixed to the land or building at the completion of the building work. The Bill creates a head of power to prescribe in regulations any item the cost of which is to be deducted when the cost of the building work is being calculated. This will allow the concept of the “cost of the building work” for the purposes of the levy to be responsive to changing industry practices over time.

Because the Bill is replacing the current method for calculating the amount of levy payable with a new formula, to address the uncertainty created by the current formula, the Bill validates all past estimates of the cost of building work and levy amounts calculated and imposed by the Commission. These validation provisions do not override any legal proceedings commenced but not finally determined before the day on which this Bill is second read in this place.

Other consequential amendments to ensure smooth operation include expanding the surveyor’s authority to refuse a building permit application in certain circumstances, such as if the permit application does not set out factually correct information relevant to the cost of building work, and expanding the Commission’s authority to reassess levy calculations if there has been a variation to the cost of the building work.

Animal registration fees

The Bill amends the Domestic Animals Act 1994 (Domestic Animals Act) to give effect to a modest increase in the amounts payable to the State Government from dog and cat registration fees collected by councils, and greyhound registration fees collected by Greyhound Racing Victoria (GRV). The Bill will increase the amount payable from $4.51 (2024–25) to $9.00 (2026–27) for each dog and cat registration, increasing annually in line with regular increases to fees under the Monetary Units Act 2004, and from $3.50 (2024– 25) to $7.00 (2026–27) for each GRV greyhound registration. The increase will support Agriculture Victoria to continue to undertake important activities such as responsible pet ownership programs, animal welfare initiatives and research.

Limitation of actions

The Bill will amend the Limitation of Actions Act 1958 (Limitation of Actions Act) to clarify the limitation period applicable to proceedings for the recovery of invalid taxes. This amendment clarifies that section 27 of the Limitation of Actions Act does not apply to proceedings to which section 20A(2) of the Act applies.

Section 27 is an original provision of the Limitation of Actions Act. Its purpose is to postpone the commencement of time of limitation periods in cases of fraud and mistake until such time as the affected party had discovered the fraud or mistake, or could, with reasonable diligence have discovered it.

Section 20A was subsequently inserted into the Limitation of Actions Act by the Limitation of Actions (Recovery of Imposts) Bill 1961 following contemporaneous challenges to the validity of certain government charges and following a decision of the High Court that a New South Wales (NSW) plaintiff was entitled to the recovery of payments made to the NSW government over a period of approximately 17 months (Mason v New South Wales [1959] HCA 5) and an unsuccessful challenge to a state tax in Victoria (Dennis Hotels Pty Ltd v Victoria [1960] HCA 10).

At the time, it was Parliament’s intention that the inserting section 20A addressed a risk that a successful challenge to the validity of a government tax or other impost could affect the ability of the State to ‘meet the claims upon it and at the same time carry on the ordinary financial administration of the State.’ Inserting section 20A into the Limitation of Actions Act addressed this concern and established that ‘actions for the recovery of moneys paid as taxes or other imposts should be limited to the recovery of sums paid within twelve months before the commencement of the action.’ If section 27 was intended to apply to section 20A at the time it was inserted into the Limitation of Actions Act, then section 20A would have no work to do with respect to invalid taxes.

To confirm that the Limitation of Actions Act operates as Parliament intended when introducing section 20A, this amendment is being introduced to make certain of the interaction between section 27 and section 20A(2) of the Limitation of Actions Act with respect to the applicable limitation period to challenge the validity of a tax. This amendment will also ensure there is a level of certainty in the ability of Government to allocate public revenue to support effective economic management, the development and maintenance of public infrastructure and services for the community in a predictable fashion.

While the Bill does not amend section 20A(2), I note that past practice with respect to amendments of section 20A(2) has been to comply with the requirements contained section 18(2A) and section 85 of the Victorian Constitution Act 1975 (Constitution Act) which arise with respect to legislation that directly or indirectly affects the jurisdiction, powers or authorities of the Supreme Court of Victoria. While the Government does not regard such action as having been necessary when s 20A(2) was previously amended, these steps were observed in those past instances out of an abundance of caution. It is the view of the Government that this amendment, which amends section 27 only, does not affect the jurisdiction of the Supreme Court and the manner and form requirements of section 18(2A) and section 85 of the Constitution Act are unnecessary.

To provide certainty to Government and the community, the amendment to the Limitation of Actions Act is proposed to commence the day of Royal Assent. In keeping with the past practice associated with the commencement of legislation dealing with the application of limitation periods in relation to the recovery of taxes, the amendments made by this bill apply to and in relation to money paid before, on or after the date upon which the amendment receives the Royal Assent, but do not apply to a proceeding commenced before that date.

Congestion levy

The Bill amends the Congestion Levy Act 2005 (Congestion Levy Act) to change the category 1 area levy rate to $3,030 per leviable parking space, in line with the parking space levy rates in Sydney’s CBD. The Bill also changes the category 2 area rate to $2,150 per space. The changes will commence from 1 January 2026 for the 2026 levy year. Levy rates in 2027 and subsequent years will be adjusted annually by Consumer Price Index.

The Bill further expands the category 2 area to include inner-eastern suburban areas not currently captured by the levy, despite having similar proximity to Melbourne’s CBD as other suburbs subject to the levy. These include the suburbs of Burnley, Cremorne, South Yarra, Windsor and parts of Richmond, Abbotsford and Prahran in proximity to Chapel Street, Bridge Road, Swan Street, Victoria Street, Hoddle Street and Punt Road. The expanded zone has similar levels of congestion, distance to the Central Business District, and access to public transport when compared to areas already in category 2. It is therefore only reasonable and equitable that they be treated the same. The increased category 2 rate of $2,150 per leviable parking space will apply to the expansion area.

The Bill also provides new congestion levy exemptions and concessions in response to specific issues brought to our attention by and car park owners and operators. First, the Bill reduces the levy to 50% of the amount otherwise payable, for conditional free parking provided by shopping centres and other retailers in the category 2 area exclusively for retail customers. To be eligible, the parking space must be exclusively set aside for retail customer parking and connected to a retail premises or retail shopping centre such that the parking space is located on, or adjacent to, the retail premises or retail shopping centre. The parking must be either provided free of charge for at least 60 minutes to all customers or provided free of charge to customers who make a purchase at the retail premises or shopping centre. Finally, the Bill will move the Queen Victoria Market from the category 1 to the category 2 area to equalise levy rates between Queen Victoria Market and other like markets, such as South Melbourne Market and Prahran Market.

Secondly, government schools and government boarding schools providing free parking will be exempted from the levy. The levy currently applies to all non-exempt parking spaces located on state government land, including government schools. This change will ensure they are treated the same way as non-government schools, which are generally exempt from the levy if they are charitable or religious organisations.

The Bill also improves congestion levy administration by excluding exclusively residential parking spaces from the levy framework, which will remove the requirement for home-owners to register as levy-payers with the State Revenue Office (SRO). As owners of exclusively residential parking are already fully exempt from the levy, this amendment will reduce red tape.

The amendments to the Congestion Levy Act all commence from 1 January 2026.

I commend the Bill to the house.

 Cindy McLEISH (Eildon) (10:45): I move:

That this debate be adjourned.

Motion agreed to and debate adjourned.

Ordered that debate be adjourned for two weeks. Debate adjourned until Wednesday 29 October.