By Tom Cowie
Two of Melbourne’s most secretive men-only clubs are trying to cut hundreds of thousands of dollars from their land tax bills after the state government took away a tax exemption because they excluded women.
The Melbourne Club, based on Collins Street, and the Australian Club, on William Street, have filed objections to notices from the State Revenue Office that have whacked the exclusive institutions with combined annual land tax payments north of $1 million.
The Australian Club’s grand facade at 110 William Street.Credit: Jason South
The value of their landholdings has jumped, in one case by 334 per cent in just two years.
Both clubs have gone to the Victorian Civil and Administrative Tribunal to challenge the valuer-general’s property valuations, which are used to calculate land tax. Primary residences are exempt from the tax.
Until 2022, private members-only social institutions such as the Melbourne Club and Australian Club were included in that exemption, along with other not-for-profit organisations such as sporting clubs.
However, former treasurer Tim Pallas removed the concession, bringing the clubs into line with other private organisations liable to pay tax on their landholdings.
The clubs’ exclusion of potential members based on gender was explicitly used as the reason for the tax impost.
The Melbourne Club is disputing the valuation of its clubhouse at 36 Collins Street.Credit: Penny Stephens
“For too long, private gender-exclusive clubs have benefited from land tax concessions while discriminating against half the population,” Pallas said at the time.
The change also applied to women-only clubs such as the Alexandra and Lyceum clubs, however, The Age is not aware they are challenging their tax bills.
In its 2024 assessment, the Melbourne Club was hit with a land tax bill of $656,520 after its landholdings, including the 167-year-old clubhouse at 36 Collins Street, were valued at $26.58 million.
The Australian Club owed $430,740 in tax after its two properties – the clubhouse at 91-110 William Street and Scottish House at 90-96 William Street – were valued at $18.06 million.
As treasurer, Tim Pallas removed the land tax concession to men-only and women-only clubs.Credit: Joe Armao
The clubs are objecting to those property valuations, claiming they should be cut by at least half because heritage protections restrict potential redevelopment of the land.
The Australian Club has also taken issue with how much its valuations have increased since the land tax concession was removed.
According to its filings, the club’s landholdings have risen in assessed value from $4.16 million in 2022 to $18.06 million in 2024.
“The magnitude of this increase is completely disproportionate to previous revaluations,” the club’s lawyers, Hall and Wilcox, argued.
“Particularly in circumstances where the use ... has been (and remains) severely restricted due to the properties’ heritage status.”
Acting for the Melbourne Club, Kristina Popova from law firm Grant Thornton, said the valuation applied to its clubhouse was in line with other properties in the CBD free of any heritage constraints.
Rather than $11.47 million, she wrote, it should be valued at $5.71 million.
“The building is purpose-built for the exclusive use of a members’ club,” she wrote.
The entrance to the Melbourne Club.Credit: Penny Stephens
“The specialty nature of the configuration and architectural style means that the pool of potential purchasers and tenants is limited.”
New members of the Melbourne Club face a joining fee of $6000, as well as annual fees of $3000 plus meals, drinks and accommodation. Women are barred from joining.
As well as gender, there have also been allegations that the club has discriminated based on race.
The VCAT hearing has been delayed while the High Court rules on a similar case brought by the owners of 490 St Kilda Road, a Queen Anne-influenced, two-storey red brick villa constructed in 1897.
In that case, VCAT cut the land tax valuation from $6.2 million to $2.925 million after the owners successfully argued that a heritage overlay constrained the value of the property.
The state government’s Valuer-General appealed against the decision to the Court of Appeal but lost. It has appealed again to the High Court.
The state government has focused on land tax as a source of revenue as it seeks to pay down record levels of debt and fund infrastructure projects.
In the 2023-24 budget, the tax-free threshold for general land tax rates for properties decreased from $300,000 to $50,000.
Land tax was increased by $975 plus 0.1 percentage point of the value of landholdings above $300,000.
Land tax applies to the unimproved value of a property, meaning it doesn’t include buildings.
The “temporary” measure will last for 10 years as part of the government’s plan to pay down its COVID-19 debt.
Both the Melbourne Club and Australian Club declined to comment. The state government declined to comment while the matter was before VCAT.
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