Land Tax and the Deceased Estate Victoria: The 3-Year Rule Executors Must Know

If the deceased owned property in Victoria, the State Revenue Office (SRO) has specific rules about how land tax applies during estate administration — and missing the key deadlines results in a significant, punitive increase in what the estate owes. Most executors don't know these rules exist until they receive an unexpected land tax assessment.

This article explains the SRO's concessionary period for deceased estates, the LTX-Trust-18 form that must be filed within one month of receiving the grant, and what happens if you miss the three-year administration window.

How Land Tax Normally Works on Deceased Estates

When a person dies, their property doesn't immediately transfer to beneficiaries. During the administration period — which can run from months to several years for complex estates — the property is technically held by the executor on behalf of the estate. Under normal rules, a trust holding property is taxed at significantly higher "trust surcharge" rates rather than general land tax rates.

However, the SRO recognises that treating a deceased estate the same as an investment trust would be punitive. To address this, Victoria provides a concessionary period during which the estate is assessed at general land tax rates (not the higher trust surcharge rates) — but only if the executor files the right paperwork on time.

The LTX-Trust-18 Form: File Within One Month

When an executor receives the Grant of Probate or Letters of Administration from the Supreme Court of Victoria, they must lodge the "Commencement of Administration" form (LTX-Trust-18) with the State Revenue Office within one month of the grant being issued.

This form notifies the SRO that the estate has entered formal administration and that the land should be treated as an "administration trust" subject to concessionary rates. Without this notification, the SRO has no obligation to apply the concession.

The consequence of missing this one-month window can be the retrospective assessment of the estate at higher trust surcharge rates, draining estate liquidity that was intended for beneficiaries.

The Principal Place of Residence Exemption During Administration

If the deceased's property was their Principal Place of Residence (PPR) — the home they lived in — it is fully exempt from land tax during the concessionary administration period. This is one of the most valuable protections the SRO provides, but it only applies if:

1. The LTX-Trust-18 form was filed within one month of the grant, AND
2. Administration is completed within three years of the date of death

A surviving spouse living in the property as their own PPR may also qualify for the PPR exemption in their own right once the property has transferred to them — but while the estate is still open and the property remains in the executor's name, the estate's concessionary rules govern.

The 3-Year Concessionary Period

The SRO's concessionary treatment of the deceased estate as an "administration trust" at general rates (rather than trust surcharge rates) runs until:

• The third anniversary of the date of death, OR
• Administration is complete, whichever is earlier

If administration drags beyond three years — which can happen in complex estates with multiple properties, contested wills, interstate assets requiring resealing, or drawn-out court proceedings — the estate loses the concessionary status. The property defaults back to trust surcharge rates, and the PPR exemption is no longer available.

The SRO can grant an extension beyond three years in cases of exceptional complexity, but this is not automatic and requires an application with strong supporting evidence. Executors should treat three years as a hard deadline and plan estate administration accordingly.

A Separate Post-2026 Rule: Separate Residences on the Same Land

From 1 January 2026, there is a specific change in how the SRO treats properties where a separate dwelling generates rental income. Previously, any rental income from any part of the property risked disqualifying the entire property from the PPR exemption.

Under the updated rules, if the income comes from a separate residence on the land — such as a rented granny flat or a legally subdivided secondary dwelling — the primary dwelling can still retain its PPR exemption, provided it is occupied as the principal residence of the deceased (or their estate beneficiary). This change matters for estates holding rural or semi-rural properties with secondary dwellings, and for Melbourne homes with standalone studio rentals.

Executors dealing with this scenario should obtain advice from a tax professional to correctly apportion land value between the primary dwelling and any income-producing secondary dwelling.

Completion of Administration: Another One-Month Deadline

At the end of estate administration, the executor must lodge a "Completion of Administration" form (also LTX-Trust-18) with the SRO within one month of finalising the estate.

Administration is considered complete for SRO purposes when the executor:

• Finishes all administrative duties
• Assents to transfer the land to beneficiaries, OR
• Begins holding the land as an ongoing trust for beneficiaries

If the executor fails to file the completion form, the SRO continues to assess the executor personally for the estate's ongoing land tax liability — creating compliance complications that are difficult to unwind.

Land Tax vs Stamp Duty: Two Different SRO Obligations

Executors often confuse land tax with stamp duty, but they are separate obligations with different rules:

Land tax is an annual tax on the total value of Victorian land holdings above the threshold. The deceased estate has a concessionary administration period, as described above, with the LTX-Trust-18 form requirements.

Stamp duty applies to transfers of property between parties. Under Section 42 of the Duties Act 2000, transfers of property from an estate to a beneficiary are generally exempt from stamp duty — meaning inheriting a property does not trigger a duty bill. However, there is an ongoing SRO review of whether beneficiaries who "assume" outstanding land tax liabilities (by agreeing to pay them as part of the inheritance) create a "dutiable consideration" that triggers stamp duty. Executors dealing with properties that have accumulated land tax debt should take specific advice on this before completing a transfer.

What Executors Should Do Immediately

1. File LTX-Trust-18 within one month of receiving the Grant of Probate or Letters of Administration
2. Set a calendar reminder for the three-year administration deadline from the date of death
3. File the completion form within one month of finalising administration
4. Assess any secondary dwellings on the property before claiming the full PPR exemption

The cost of missing these deadlines is disproportionate to the effort required to meet them. The LTX-Trust-18 form is available from the SRO's website and takes most executors under an hour to complete once they have the grant details to hand.

For executors dealing with the full picture of Victorian estate administration — from the probate process and bank notifications through to SRO compliance and benefit claims — the Victoria Survivor Benefits Navigator includes the LTX-Trust-18 filing checklist, the SRO concessionary period calendar, and guidance on the stamp duty exemption for estate transfers.

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