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Land tax: your nominated beneficiary election might be working against you now

15 September 2026
by Tim Olynyk
5-minutes read

In 2006, the Land Tax Act was amended to impose a surcharge rate on trust-owned land. At the time, trusts were permitted to nominate a beneficiary in relation to their existing landholdings – a move that, for many, created immediate tax savings. More than 20 years on, that decision is still affecting clients’ land tax bills, and for some, it’s now working in the opposite direction.

Nominated a beneficiary back in 2006?

Your annual land tax bill may have changed. Read on to find out if it still makes sense.

How nominated beneficiary elections work

When a trust owns land, it is normally assessed on that land at the surcharge land tax rate. However, trusts that held land on 1 January 2006 were permitted to nominate a beneficiary in relation to those specific holdings. Here is how the mechanism works:

(i) The trust continues to be assessed on the nominated holdings at ordinary land tax rates, not the surcharge rate;

(ii) The nominated beneficiary is also assessed on those same holdings for land tax purposes, but receives a credit for the land tax already paid by the trust.

For clients who made a nomination back in 2006 and whose circumstances have not changed, this arrangement has continued to deliver the same benefit it did two decades ago. But when circumstances shift – particularly when the nominated beneficiary acquires additional land in their own name – the same election can quickly become detrimental.

When an old decision stops making sense

Land tax is a cumulative tax assessed on a taxpayer’s total landholdings. When a nominated beneficiary election is in place, the nominated beneficiary’s land tax is calculated on the combined value of (i) the trust’s nominated land, and (ii) any land they own personally. This can create a significant problem if the nominated beneficiary has since purchased additional property.

By way of example:

Suppose a trust acquired land valued at $400,000 in 2006 and made a nomination on behalf of an individual who, at that time, owned no other property. Let’s also assume that in 2026, that landholding is now worth $1,500,000. At 2026 land tax rates, that nomination alone would generate an annual saving of approximately $5,388 by allowing the trust to escape the surcharge and placing the land in the nominated beneficiary’s hands at a rate that, in isolation, was lower than the surcharge would have been.

However, if the same nominated beneficiary has since purchased a property in their personal name which has a land value of $1,200,00, the annual tax saving will no longer be present. Instead:

Scenario	Trust Land Tax	Beneficiary Land Tax	Total
With nomination in place	$9,150	$17,550	$26,700
Without nomination	$14,538	$6,450	$20,988

With the nomination in place, the combined tax bill is $26,700. Without it, the bill would be $20,988 – a difference of $5,712. What was once a strategic advantage has quietly become a costly hindrance.

What this means for you

If you made a nominated beneficiary election in 2006 and have not materially changed your circumstances since – the nominated beneficiary has not acquired significant additional property, and the value of the trust’s landholdings has not altered dramatically – your election is likely still delivering the intended benefit. But if your situation has evolved, the economics may have shifted entirely.

What can be done

Fortunately, a nominated beneficiary election is not permanent. If the election no longer serves your interests or now works against them, the nominated beneficiary can apply to the State Revenue Office to revoke it.

From the date of revocation, the trust’s landholdings revert to being assessed at surcharge rates, and the nominated beneficiary is no longer assessed on those holdings. Depending on the numbers involved, this can translate to significant ongoing savings, but only if the election is formally withdrawn.

The process itself is straightforward – a submission to the State Revenue Office with supporting detail – but it is worth getting the analysis right beforehand. That is where a BG Private advisor can help: running the numbers under your current circumstances, comparing the cost-benefit of keeping the election in place against the savings of revoking it, and then managing the administration if revocation is the right call.

Unsure whether your nominated beneficiary election still makes sense?

Talk to our Tax Partner Tim Olynyk on (03) 9810 0730

About the author

Tim Olynyk

Partner | Tax Advisory

Tim Olynyk is a Tax Advisory Partner with close to 30 years of specialist experience advising private family groups and professional services firms on complex tax matters. His edge lies in finding smarter structuring solutions, ensuring every transaction is approached with the right tax strategy from the outset.