By Meg Hill
The state government has quietly closed a tax loophole that cost it hundreds of thousands of dollars and threatened hundreds of thousands more.
Since the start of the year owners of state-listed heritage buildings in the CBD have used a loophole in the Valuation of Land Act 1960 to have their buildings valued at just $1.
The list included multi-million-dollar buildings like the General Post Office (GPO) and the Block Arcade.
Following that, owners of locally-listed heritage buildings began to target the loophole – threatening a landslide of land tax exemptions.
The State Government erased the loophole from the legislation in an amendment passed on June 18, but it seems the $1 valuations will still have to be overturned in court.
A Department of Treasury and Finance spokesperson said the GPO case was still before VCAT.
“Heritage-registered commercial properties that generate significant income should not receive an unfair advantage through reduced land tax liabilities,” the spokesperson said.
The amendment repealed both Section 2(8) and Section 2(9) from the Act, closing the loophole for both state-listed and locally-listed heritage buildings.
When the precedent case – the GPO – was decided at the Victorian Civil and Administrative Tribunal (VCAT) and valued at $1, both the VCAT members and the government expressed concern.