Bold opening: A tiny garden bed is igniting a multimillion-dollar feud between a local council and the state government over land taxes that affect kinders, parks, and public spaces.
Werribee’s narrow 18-square-metre garden bed along the Bridge Hotel car park has become the unlikely flashpoint in a broader dispute. Over three years, it contributed more than $70,000 in land tax bills to Wyndham City Council, drawing attention to how even small parcels of municipal land can become contested revenue sources.
Between 2021 and 2023, the State Revenue Office billed the council for land tax on more than 20 council-owned parcels. The Watton Street garden bed was part of this broader sweep, with annual charges rising from $22,804 in 2021 to $25,386.50 in 2022 and 2023.
The dispute has grown into a multimillion-dollar tax row. Wyndham formally objects to what it calls a “greedy tax grab” on various public properties, including drainage channels, power line corridors, not-for-profit kindergartens, maternal and child health centres, community sports fields, an animal pound, land earmarked for telecom towers, and public parks donated to the council by developers.
The council has even asked the Auditor-General to examine whether land tax is being improperly imposed across all 79 Victorian councils, not just Wyndham.
Wyndham seeks a refund of $5.359 million it paid on more than 20 properties from 2021 to 2023 and is pressing to have 2024 and 2025 assessments waived while awaiting a verdict on those parcels.
Wyndham Mayor Josh Gilligan argues that taxpayers are effectively double-taxed on assets that generate no revenue for the council, undermining funding for essential services. “Ratepayers are being double-taxed on kinders, sporting ovals, and garden beds, and the state needs to end this greedy tax grab immediately,” he said. He also suggested there could be millions of dollars in taxes already paid by government agencies and councils across Victoria that should be refunded.
The largest single bill—about $4.3 million—concerns 62 hectares set aside for a future 8,000-lot suburb near Tarneit, intended to be developed around a 15,000-seat stadium. The public-private partnership with Western Melbourne Group, owners of A-League club Western United, stalled after the club faced regulatory issues and the ATO pursued related debts, which were resolved in January.
Wyndham’s objection contends that the council entered a caretaker arrangement with a local farmer to manage crop production, firebreaks, and weed control on the Tarneit land. The State Revenue Office’s assessment reportedly hinged on payments to the farmer for crops, even though Wyndham did not receive direct revenue from the harvest.
Another point of contention is a 2023 assessment of $19,837 for Wyndham Harbour, a Werribee South marina on Crown land managed by the council under a 99-year lease.
The Age approached the State Revenue Office for details on these parcels, but a spokesperson declined to comment on individual cases. They noted that land owned by a municipality is generally exempt from land tax when not used for business purposes, with some exceptions.
Experts weigh in. Dr. David Hayward, Emeritus Professor of Public Policy and the Social Economy at RMIT University, sees the dispute as Wyndham attempting to reclaim some revenue control after a decade of rate caps imposed by the state. Victorian councils argue that ongoing rate capping hampers their ability to fund services. A recent parliamentary inquiry found rate caps threaten councils’ financial viability while still delivering lower rates to about 40% of ratepayers.
Hayward cautions it’s easy for the state to claim rate caps protect cost of living, but councils bear the burden of constrained revenue and might spark more of these conflicts as a result.
Even though the total yearly land tax takes in Victoria run into the billions—$9.254 billion in 2024–25, rising to $10.098 billion this year—the impact on cash-strapped councils is outsized for individual cases like Wyndham’s $5 million claim.
Municipal Association of Victoria president Cr Jennifer Anderson emphasizes the need for ongoing scrutiny of land tax exemptions to ensure they remain appropriate for local-government needs. She advocates constructive collaboration with the state to develop a fair, workable land tax framework that benefits communities.
If you’re curious about what happens next, consider this: should local governments have broader leeway to challenge or reinterpret land tax on non-revenue-generating public assets, or should the system be tightened to prevent revenue shortfalls for essential services? Share your take in the comments.
The story was reported by Adam Carey, The Age’s senior city reporter, who covers suburban affairs among other beats. For more updates, subscribe to Morning Edition, which highlights today’s top stories and insights.
