Heritage listed The Hotel Windsor launches multi-million-dollar land tax dispute
The iconic and heritage listed The Hotel Windsor in the heart of Melbourne’s CBD is in a land tax dispute after the land it sits on jumped by $54 million in value.
The hotel’s owners have now launched civil law in the Victorian Civil and Administrative Tribunal.
The dispute is due to a site value assessment of $60,890,000 its received in a letter from the Valuer-General in February for the land at 103-137 Spring St.
Hotel Windsor Holdings Pty Ltd says it received a valuation that was ten times the price set in earlier documents: a 2020 Disallowance Notice valued the land at $6.8 million.
The jump would push The Hotel Windsor’s annual land tax bill from $125,000 up to $1.5 million.
The sudden valuation rise was labelled “ridiculous” by The Hotel Windsor’s chief operating officer Ajit Rao.
“Pre-Covid times the (site) value was $1 million at that stage, and then post-Covid now they are talking about close to $61 million — so 60 times,” Rao said.
The hotel’s heritage overlay had kept the price tag low, however since the Victorian government closed that loophole in 2019, the owners have had to deal skyrocketing land values and land tax bills.
Victorian Treasurer Tim Pallas predicted the closure of the loophole to impact 13,000 properties.
“We are happy to pay the appropriate land tax but it needs to be based on the appropriate valuation considering it’s a heritage property,” Rao said.
The Valuer-General authority is yet to explain how it reached the inflated figure, but the hotel wants clarification. However, despite orders from the tribunal for “an explanation as to what are the circumstances that have caused the valuation to change from the $6.8 [million] to the just under $61 million”, the authority objected.
In May, the authority argued against relevance and the tribunal’s powers, but VCAT has stood its ground demanding compliance with its lawful orders.
“In order to ‘review the decision’ the subject of the application for review, the basis for the decision is a relevant matter.
“Further, it is a matter of fairness, particularly in circumstances where the value now contended is almost ten times the site value set out in the Disallowance Notice,” VCAT deputy president Teresa Bisucci and Senior Member Justine Jacono ordered.
The authority has since withdrawn its objection to VCAT’s powers.
Other heritage sites are now considering their own action.
Irit Jackson, 15th August 2022
