Biggest Super Fund in Australia Tests Victoria’s Windfall Gains Tax

The former owner of a 56.4ha development site has won a Victorian Civil and Administrative Tribunal battle against the State Revenue Office, quashing a $36.2 million windfall gains tax assessment. The controversial tax—a 50 to 62.5 per cent levy to be paid when land value increases above $100,000 due to government rezoning—was introduced in Victoria in 2021. It was met with widespread criticism when it was implemented in 2023 with detractors arguing it had the potential to change land prices across Victoria. It also was critisised for how land was valued post-rezoning. The case involving Australia's largest superannuation fund, AustralianSuper, is the first that has faced a legal challenge at VCAT. The fund has more than $410 billion in retirement savings for more than 3.6 million members. The Commissioner of State Revenue charged AustralianSuper for the uplift in value of the former Kingswood Golf Course at 179-217 Centre Dandenong Road, 23 km south-east of the Melbourne CBD, which the fund had owned since 2014, under the windfall gains tax rules. The State Revenue Office said the fund owed 50 per cent of the $72.5 million uplift in value as a result of those rules. ▲ Satterley Property Group took over the development of the site in 2024. The tax bill landed after the site, 55km south of Melbourne CBD, was rezoned to residential by the Minister for Planning in September 2023. AustralianSuper took its case to the Victorian Civil and Administrative tribunal, which acknowledged it was the first it had reviewed under the Windfall Gains Tax Act 2021. AustralianSuper argued it was exempt from the windfall gains tax because of a transitional exemption loophole in the act that applied to certain rezonings under way before May 15, 2021. The tribunal was told that attempts to amend the Kingswood Golf Course rezoning had been under way for several years. AustralianSuper itself had written to the then-Minister for Planning to ask they refer the proposal to rezone to the Gold Course Redevelopment Standing Advisory Committee (SAC). ▲ Satterley bought the former golf club and development site for around $220 million. The main issue VCAT identified was whether the planning minister agreed before the 2021 deadline to prepare the amendment. The State Revenue Office contended that the exemption did not apply because the tribunal could not be satisfied that the minister did agree prior to the deadline. It did accept that all other relevant requirements had been met for exemption from the tax. The tribunal ruled that it was enough that the minister had approved a departmental brief and referred a draft amendment to the SAC for consideration. It reasoned that if the state government had “desired a more defined criterion for the availability of the exemption in respect of Ministerial amendments, it could have identified a specific trigger connected with the progress of an amendment”. VCAT ruled that there was “ample” evidence that the minister agreed to the rezoning change, and set aside the windfall gains tax assessment by the State Revenue Office. AustralianSuper declined to comment for this report. The decision could still be subject to appeal. Kingswood development before VCAT again While AustralianSuper was the applicant in the most recent VCAT case, it is not the owner of the site now. AustralianSuper sold it to Satterley Property Group in 2024 after “significant interest” in the development site, with bidders reportedly including development heavyweight Mirvac. Satterley’s plans for the Kingswood Golf Course Development were approved by the planning minister in October last year. The plans for the site included a subdivision of 941 residential lots including diverse lot sizes for a mix of detached homes and townhouses. However, the development has faced obstacles since that ownership change. The Kingston City Council opposed the development, asking VCAT to review a decision by the Minister for Planning to approve the project in January. Satterley prevailed in that case as the council had missed the deadline to apply for a review of the decision by four days. It had had 28 days to make such an application.

Land & Communities
Clare Burnett
Mon 17 Aug 26

Biggest Super Fund in Australia Tests Victoria’s Windfall Gains Tax

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