In a bold move against the state government, Wyndham City Council is demanding a refund of $5.359 million in land taxes paid between 2021 and 2023. The dispute centers around more than 20 parcels of council-owned land, including drainage channels, power lines, and community facilities, which have been taxed despite generating no revenue for the council.
The controversy began with a seemingly innocuous 18-square-metre garden bed at Werribee’s Bridge Hotel, which accrued over $70,000 in land tax bills over three years. This small strip of land has become symbolic of a larger battle over land tax assessments that the council deems unfair.
Wyndham’s Case Against the State Revenue Office
Between 2021 and 2023, the State Revenue Office issued annual land tax bills to Wyndham City Council, starting at $22,804 in 2021 and increasing to $25,386.50 in the subsequent years. The council is challenging these assessments, labeling them a “greedy tax grab” that affects not only garden beds but also critical community assets such as kindergartens, sports fields, and public parks.
Wyndham Mayor Josh Gilligan has voiced strong opposition, arguing that the taxes are unjustly siphoning funds away from essential services. “Ratepayers are being double-taxed on kinders, sporting ovals, and garden beds, and the state needs to end their greedy tax grab immediately,” he stated.
Broader Implications and Historical Context
The council’s appeal for a refund is part of a larger call for the Auditor-General to investigate land tax practices across all 79 Victorian councils. The dispute highlights ongoing tensions between local governments and the state over financial autonomy, exacerbated by a decade of rate capping policies.
Dr. David Hayward, Emeritus Professor of Public Policy at RMIT University, notes that the dispute reflects Wyndham’s attempt to regain financial control amidst restrictive rate caps. “It’s easy for the state government to say, ‘We’re capping rates to support cost of living’, but it’s pretty tough on councils,” he explained.
“The disputed sum is a small fraction of Victoria’s total land tax take: $9.254 billion in 2024-25, rising to $10.098 billion this financial year,”
according to a Parliamentary Budget Office analysis. However, for a cash-strapped council like Wyndham, $5 million is significant.
Specific Cases Fueling the Dispute
The most substantial tax bill in question is $4.3 million for 62 hectares in Tarneit, intended for a future suburb and sports stadium. The project stalled after the soccer club involved had its competition license revoked and faced financial scrutiny. The land tax was triggered by a caretaker agreement with a local farmer, despite the council not profiting from the arrangement.
Another contentious assessment involves a $19,837 bill for Wyndham Harbour, a marina on Crown land managed by the council under a long-term lease. The State Revenue Office has declined to comment on individual cases, citing privacy concerns.
Future Steps and Potential Outcomes
As Wyndham awaits land tax assessments for 2024 and 2025, it seeks not only refunds but also a waiver of future taxes on the disputed properties. The outcome of this case could set a precedent for other councils grappling with similar financial constraints under state-imposed rate caps.
With the financial viability of local councils at stake, the resolution of this dispute will be closely watched by municipalities across Victoria. The situation underscores the delicate balance between state fiscal policies and local government autonomy, a dynamic that continues to evolve.
