Victorian Government

Land Transactions Policy

April 2022


Acknowledgment
We acknowledge and respect Victorian Traditional Owners as
the original custodians of Victoria’s land and waters, their unique
ability to care for Country and deep spiritual connection to it. We
honour Elders past and present whose knowledge and wisdom has
ensured the continuation of culture and traditional practices.
We are committed to genuinely partner, and meaningfully engage,
with Victoria’s Traditional Owners and Aboriginal communities to
support the protection of Country, the maintenance of spiritual and
cultural practices and their broader aspirations in the 21st century
and beyond.

© The State of Victoria Department of Environment, Land, Water and Planning 2022

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logo and the Department of Environment, Land, Water and Planning (DELWP) logo. To view a copy of this licence,
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Revision History

Edition Commence Summary of Revisions Sections

ii Victorian Government Land Transactions Policy

 Contents

Contents

Part 1: Basic Principles..............................01 When does the requirement to achieve

accountability, transparency and follow
1. Introduction............................................................... 02 legislation apply?................................................................................... 13
Background...............................................................................................02 Who is responsible for ensuring land
transactions achieve accountability,
What is the purpose of the policy?.......................................02
transparency and follow legislation?................................... 13
What is the scope of the policy?.............................................02
How does an agency apply this
How does the policy work?.......................................................... 03 requirement in practice?................................................................. 13
Who is responsible for the policy?.........................................05 What should an agency do if a
land transaction does not meet the
Related government policies.....................................................05
requirement to achieve accountability,
What if I can’t find the information I need?..................05 transparency and follow legislation?................................... 15

2. Key terms....................................................................06 Where can I find out more?........................................................... 15

What is land?........................................................................................... 06 3. Due diligence............................................................. 16

What is a land transaction?....................................................... 06 Background................................................................................................16

What is a Victorian government agency?.................... 08 General due diligence.......................................................................16

What are the land transaction requirements?......... 08 Contamination due diligence.................................................... 23

What is an exemption?................................................................... 08 Are there any exemptions to the due

diligence requirement in the policy?................................... 29
Where can I find the meaning of other key
terms used in the policy?.............................................................. 08 Where can I find out more?.......................................................... 29

Part 2: Land Transaction 4. Victorian Government Land Monitor.......... 30

Requirements..............................................09 Background.............................................................................................. 30

1. Land transaction requirements...................... 10 VGLM approval...................................................................................... 30

Background................................................................................................10 Compliance assurance and

supporting agencies ........................................................................35
What are the land transaction requirements?...........10
What happens if VGLM identifies
Where can I find out more about the land non-compliance with the requirements
transaction requirements?............................................................ 11 in the policy?..............................................................................................36
2. Accountability, transparency 5. Valuation requirements.......................................37
and legislation...........................................................12
Background............................................................................................... 37
Background.................................................................................................12
How do I obtain a VGV valuation?........................................ 40
What is accountability?....................................................................12
What is a check valuation?........................................................... 41
What is transparency?.......................................................................12
What happens when an agency receives
When is a transaction in accordance VGV’s valuation?.................................................................................... 42
with legislation?....................................................................................... 13
Informal discussions and meetings.................................... 44

Victorian Government Land Transactions Policy iii

Victorian Government Land Transactions Policy

Can an agency disclose a VGV 8. Sale of land with a public land zone............ 50
valuation report?................................................................................. 44
Background...............................................................................................50
Are there any exemptions from the
What is a public land zone?.........................................................50
requirement to obtain a VGV valuation?....................... 44
What is the process for changing a public
6. Land exchange........................................................ 45
land zone to meet the requirement?................................... 51
Background...............................................................................................45
Are there any circumstances when an
What is a land exchange?.............................................................45 agency can offer land for sale with a
public land zone?................................................................................... 51
Are there any exemptions to the land
exchange requirement?.................................................................45 Does the public land zone requirement
apply to the sale of land to other agencies,
If a land exchange is approved, do the local councils and the Commonwealth?.......................... 51
other requirements in the policy apply?.........................45
Are there any exemptions from the public
7. Public sales process.............................................. 46 land zone requirement in the policy?.................................. 51
Background...............................................................................................46 9. Lease with option to purchase........................52
What is a public process?.............................................................46 Background................................................................................................52
What methods of sale will meet the public What is a lease with an option to purchase?...............52
process requirement?.......................................................................46
Does this requirement apply where the
What methods of sale do not meet the option is being granted to another agency?...............52
public process requirement?.....................................................48
Are there any exemptions to the lease with
Does the public process requirement option to purchase requirement?...........................................52
apply to the sale of easements or other
interests in land?...................................................................................48
Part 3: Exemptions.................................... 53
Does the public process requirement
apply to the sale of land to other agencies, 1. Exemptions................................................................ 54
local councils and the Commonwealth?.........................48 Background...............................................................................................54
Are there any exemptions from the public How do the exemptions in the policy operate?.........54
sales process requirement?........................................................49

iv Victorian Government Land Transactions Policy

 Contents

What are the exemptions to the land Part 4: Transactions..................................75

transaction requirements?..........................................................54
1. Sale.................................................................................76
VGLM approval requirement..................................................... 55
Background............................................................................................... 76
Record keeping....................................................................................... 55
Land transaction requirements.............................................. 78
Where can I find out more about the
exemptions to the land transaction Exemptions.................................................................................................85
requirements?.......................................................................................... 55
2. Purchase......................................................................87
2. Exemptions granted by a
Background............................................................................................... 87
decision-maker....................................................... 56
Land transaction requirements..............................................88
Background...............................................................................................56
Exemptions................................................................................................. 92
Exemption 1: Cabinet or committee of
Cabinet approval..................................................................................56 3. Compensation......................................................... 93
Exemption 2: Minister for Planning approval.............. 57 Background...............................................................................................93
Exemption 3: Assistant Treasurer approval................ 60 What is an offer of compensation?......................................93
Exemption 4: VGLM approval – Purchase Land transaction requirements..............................................93
in excess of VGV valuation............................................................61
4. Government to government..............................97
Exemption 5: VGLM approval – Sale or
lease after unsuccessful public process.........................63 Background............................................................................................... 97

Exemption 6: ERC or Assistant Treasurer Inter-agency transactions........................................................... 97

approval - Land exchange..........................................................64
Exemptions ............................................................................................100
Exemption 7: Responsible Minister or
Inter-government transactions..............................................101
statutory officer approval - Lease terms.......................65
Exemptions...............................................................................................102
Exemption 8: Responsible Minister or
statutory officer - Lease for public and 5. Leasing....................................................................... 104
community purposes........................................................................66
Background ........................................................................................... 104
3. Transaction specific exemptions...................67
Land transaction requirements........................................... 104
Background............................................................................................... 67
Exemptions ............................................................................................. 107
Exemption 9: Legislation................................................................ 67

Exemption 10: Recognition and

Part 5: Glossary and Abbreviations. 109
Settlement Agreement....................................................................68 1. Glossary...................................................................... 110
Exemption 11: Sale of residence to renter
2. List of acronyms and abbreviations............114
under a residential rental agreement...............................69

Exemption 12: Surplus railway land......................................70 Part 6: Appendices................................... 115

Exemption 13: Public university exemption....................71 1. Online resources for general
Exemption 14: Alternative valuation.....................................72 due diligence.............................................................116

Exemption 15: Agency-specific 2. Online resources for contamination

leasing exemptions............................................................................. 73 due diligence.............................................................118

3. List of potentially contaminating

land uses.....................................................................119

4. Definition of regional Victoria.........................121

Victorian Government Land Transactions Policy v

Part 1:
Basic
Principles

01 Victorian Government Land Transactions Policy

 Introduction

1. Introduction
This section explains the purpose of the Victorian Government
Land Transactions Policy, its scope, how it works, who administers it,
and how it relates to other government land management policies

The Victorian Government Land With critical oversight from VGLM, the land
transaction requirements have operated for over 40
Transactions Policy is not intended to years to ensure Victorian government agencies
act as a comprehensive guide to legal (agencies) are conducting land transactions in an
requirements or the requirements in a appropriate, accountable and transparent way.
range of other policies or directions for The policy is a fundamental part of all Victorian
government land transactions and at the heart
land transactions conducted by Victorian of community trust and confidence in the way
government agencies. The law relating agencies transact land in Victoria.
to land transactions is complex and best
practice in the area is constantly evolving. What is the purpose of the policy?
The policy should not be used as a substitute The policy exists to ensure agencies act in
for seeking expert advice on specific issues. accordance with the highest standards of behaviour
when undertaking land transactions. It does this by
creating a consistent framework for the way
agencies across the Victorian government are
Background required to undertake land transactions, including:
The Victorian Government Land Transactions Policy • a clear set of requirements that agencies must
(policy) was established in response to the 1977 comply with when undertaking land transactions,
Gowan’s Board of Enquiry and the 1979 Frost Royal and
Commission to ensure agencies adhere to the • establishing the role of VGLM to deliver assurance
highest standards of behaviour when undertaking to the Victorian government and community that
land transactions. It does this by creating a clear agencies are complying with the requirements in
set of requirements that agencies are required to the policy.
meet, overseen by the Victorian Government Land
Monitor (VGLM).
What is the scope of the policy?
The policy applies to all agencies that undertake
land transactions. You can find out more about the
meaning of ‘Victorian government agency’ and
‘land transaction’ under the policy in Part 1 Section 1.

Victorian Government Land Transactions Policy 02

Victorian Government Land Transactions Policy

How does the policy work?

The policy is made up of six parts:

Part 1 - Basic Principles: introduces the policy and Part 4 - Transactions: provides additional
clarifies the meaning of some of its key terms information and guidance about how the policy
requirements and exemptions apply to different
Part 2 - Policy Requirements: sets out the types of land transactions
requirements agencies are required to comply with
when undertaking land transactions and explains Part 5 – Glossary and Abbreviations: sets out the
how each requirement works meaning of key terms and provides a list of
acronyms and abbreviations used in the policy
Part 3 - Exemptions: sets out the exemptions to the
policy requirements and when they apply Part 6 – Appendices: provides further guidance to
assist agencies conduct due diligence activities and
sets out the meaning of ‘regional Victoria’ in the
policy.

To make it easy to find the information that you

need, each part of the policy is divided into the
following sections:

03 Victorian Government Land Transactions Policy

 Basic Principles

Table 1: Sections in the policy

Part 1: Basic Principles Part 4: Transactions

Section 1 Introduction Section 1 Sale

Section 2 Key Terms Section 2 Purchase

Section 3 Compensation

Part 2: Policy requirements Section 4 Government to government

Section 1 Land transaction policy Section 5 Leasing

requirements

Section 2 Accountability, transparency

and legislation
Part 5: Glossary and Abbreviations

Section 3 Due diligence Section 1 Glossary

Section 4 Victorian Government Land Section 2 Exemptions granted by a

Monitor decision maker

Section 5 Valuation requirements

Section 6 Land exchange Part 6: Appendices

Section 7 Public sales requirement Section 1 Online resources for general

due diligence
Section 8 Sale of land with public land
zone Section 2 Online resources for
contamination due diligence
Section 9 Lease with option to
purchase Section 3 List of potentially
contaminated land uses

Section 4 Definition of regional Victoria

Part 3: Exemptions

Section 1 Exemptions The policy is best read as a single document as

many of the sections are related. However, where
Section 2 Exemptions granted possible, the policy will signal where you can find
by a decision maker more information on a particular topic. The policy
also provides you with tips and examples to help
Section 3 Transaction specific you apply the policy in practice.
exemptions

Victorian Government Land Transactions Policy 04

Introduction

Who is responsible for the policy? Related government policies

General administration The policy is part of a broader framework that
establishes the requirements for the management
VGLM administers the policy. In this role, VGLM is of Victorian government land, including certain
responsible for reviewing requests for approval requirements that must be met before land is sold
to undertake land transactions, providing advice or purchased. As part of this framework, the policy
to agencies on applying the policy and delivering ensures that when agencies have met the
assurance to the government and the community requirements for selling or purchasing land under
that agencies are following the requirements in the other land management policies, the transaction
the policy. that follows is conducted in an accountable and
transparent way. It does not affect the requirements
Review of the policy or obligations of other policies.
The policy is reviewed by VGLM every five years. The three other policies that form part of the
The Minister for Planning is responsible for approving government land management framework are
any changes to the policy with the agreement of the listed in the table below:
Assistant Treasurer.

Table 2: Related Victorian government land management policies

Policy What is does

Strategic Crown Land Sets out the government’s responsibilities and obligations when Crown
Assessment Policy and land is declared surplus and requires that the government conduct an
Guidelines (SCLA policy) assessment to determine whether surplus Crown land can be sold.

Victorian Government Sets out when an agency can purchase and retain land and requires
Landholding Policy and agencies to offer to sell any surplus land to other Victorian government
Guidelines (landholding agencies, local councils, or the Commonwealth before it can be sold to
policy) the public.

Victorian Government Land Establishes a framework that enables a strategic, whole-of-government

Use Policy and Guidelines approach to land use decision making, with the objective of maximising
(land use policy) public land value.

You can find more information on how VGLM helps to What if I can’t find the information I
ensure agencies meet any preconditions to the sale
or purchase of land in the other land management
need?
policies in Part 2 Section 4. Land transactions vary in nature and complexity
and may change over time to meet government
policy priorities, and developments in the property
market.

If you can’t find the information that you need in

the policy, VGLM can provide advice on how the
policy is intended to apply to any proposed land
transaction. An agency can seek advice by emailing
vglm.admin@delwp.vic.gov.au to request an early
engagement meeting, or by submitting a request
for policy advice through VGLM Online.

You can find out more about VGLM Online in

Part 2 Section 4.

05 Victorian Government Land Transactions Policy

 Basic Principles

2. Key terms
The policy uses some key words and phrases. This section explains
the meaning of some of the key terms used in the policy

The policy applies to land transactions undertaken The meaning of sale and purchase
by agencies. The terms ‘land’, ‘land transaction’,
and ‘Victorian government agency’ have their own Under the policy, the term ‘sale’ is used to describe
meaning when used in the policy. Therefore, to apply an arrangement under which an agency agrees to
the policy you need to understand the meaning of transfer land to another party or create an interest
these key terms. in land that it owns that will benefit another party.
The term ‘purchase’ describes any agreement to
receive a land transfer from another party or to
What is land?
benefit from an interest in land created by
The policy applies to land transactions. ‘Land’ is another party.
specifically defined in the policy and includes land
Therefore, when used in the policy, the terms ‘sale’
as well as things attached to the land like buildings
and ‘purchase’ apply to a range of transactions
and improvements and things that are a natural
that may not typically be described in this way.
part of the land such as trees and minerals. It also
Some common examples of sale and purchase
includes the surface of the land, land below the
transactions under the policy are listed on the
surface and the air above the surface.
following page.
You can find a full definition of ‘land’ in the glossary
in Part 5.

What is a land transaction?

The policy applies to the following types
of transactions involving land described as
'land transactions' :
• the sale of land or an interest in land
• the purchase of land or an interest in land
• acquiring or granting a lease over land
• an offer of compensation under the Land
Acquisition and Compensation Act 1986 (LAC Act),
or Part 5 of the Planning and Environment Act 1987
(PE Act).

As set out above, the definition of land transaction

includes the sale or purchase of land or an interest in
land. Under the policy the terms ‘sale’ and ‘purchase’
have a special meaning that is broader than the
general meaning of those terms. Next, we explain the
meaning of 'sale' and 'purchase' in the policy.

Victorian Government Land Transactions Policy 06

Key terms

Table 3: Common types of sale and purchase transactions

Sale of land • Public sale, including an auction, publicly listed sale, expression of
interest (EOI) or tender
• Negotiated sale
• Land exchange
• Gift

Sale of interest in land • Granting an easement

• Entering into an option agreement

Purchase of land • Public purchase, including purchasing land for sale through auction,
EOI, tender or when land is publicly listed sale
• Negotiated purchase
• Land exchange
• Gift
• Growth Areas Infrastructure (GAIC) Work in Kind (WIK) agreement

Purchase of interest in land • Receiving the benefit of an easement

• Entering into an option agreement

Agency tip: Are there any activities or undertakings

involving land that are not a land transaction
under the policy?
Some of the categories of sale and purchase
transaction listed above cannot be The specific meaning of land transaction in the
undertaken unless an exemption from the policy, means that it does not include any of the
following:
policy applies.
• issuing or obtaining a licence over land, as
You can find more information on a licence does not create an interest in land
exemptions in Part 3 and how the land • being appointed as the administrator of Crown
transaction requirements apply to the sale land, or becoming Crown land administrator as
a result of a transfer in management, and
and purchase of land in Part 4.
• where legislation provides for the transfer of land
or creation of an interest in land, without requiring
consent of the relevant parties. This includes:
– vesting land as a road or reserve on registration
of a plan of subdivision
– declaring a road, or
– the publication of a notice of acquisition, which
vests land in an agency under the LAC Act.

While the policy requirements do not apply when a

notice of acquisition is published and the land is
vested in an agency, they do apply when an agency
is making an offer of compensation for the
compulsory acquisition of the land under the
LAC Act.

07 Victorian Government Land Transactions Policy

 Basic Principles

Additionally, the meaning of land transaction under What are the land transaction
the policy does not affect any other requirements or
obligations that may apply to the transaction under
requirements?
legislation or other government policies and The land transaction requirements are a set of
directions. This includes the finance and accounting obligations the Victorian government requires
requirements that apply when the management of agencies to comply with when undertaking land
Crown land is transferred from one Crown land transactions. Unless an exemption applies, the land
administrator to another. transaction requirements are mandatory.

What is a Victorian government You can find out more about the land transaction
requirements in Part 2.
agency?
For the purposes of the policy ‘Victorian government What is an exemption?
agency’ or ‘agency’ is specifically defined to mean
any of the following: The policy contains a limited number of exemptions,
that may relieve an agency from complying with a
• Victorian government departments
land transaction requirement subject to meeting the
• Victorian government administrative offices relevant eligibility criteria.
• Victorian public statutory authorities
You can find out more information about the
• Victorian government public entities
exemptions in Part 3.
• Victorian government special bodies
• Any legal entity established by state legislation for Where can I find the meaning of other
the purpose of the state (including those
independent of government control, but does not key terms used in the policy?
include local councils) You can find a glossary of key terms and list of
• Companies in which the state has an interest, and acronyms and abbreviations used throughout the
• Any organisation which requires statutory policy in Part 5.
authorisation and/or ministerial approval, where
public funds are involved in the land transaction.

Local councils are expressly excluded from the

definition of ‘Victorian government agency’. This
means that while an agency conducting a land
transaction with a local council is required to comply
with the policy’s requirements, the local council it
transacts with is not. Commonwealth government
agencies do not fall within the definition of ‘Victorian
government agency’ and are not required to comply
with the policy when undertaking land transactions.

References to ‘Victorian government agency’

in the policy
The policy refers to a ‘Victorian government
agency’ as an ‘agency’ or ‘agencies’. When
referring to other parts of the government like
local councils or the Commonwealth, it always
uses the complete reference.

Victorian Government Land Transactions Policy 08

Part 2:
Land
Transaction
Requirements

09 Victorian Government Land Transactions Policy

 Land transaction requirements

1. Land transaction requirements

This section sets out each of the requirements that apply
when an agency undertakes a land transaction

Background • agreeing to sell or purchase land (or an interest

of land) where:
The policy establishes 11 requirements that agencies – the value of the land or transaction is $1 million
must comply with when undertaking land (excluding GST) or more, or
transactions. These are referred to in the policy
– the land is part of a group of related
as the land transaction requirements.
transactions by the same seller or purchaser,
Under the policy, the land transaction requirements including land which is part of a group of
are mandatory. Therefore, when undertaking a land adjoining parcels proposed for sale or purchase,
transaction, an agency must comply with all the where the total value of the related land or
requirements that apply to a transaction, unless it related transactions is $1 million (excluding GST)
qualifies for an exemption. You can find more or more,
information about exemptions in Part 3. • agreeing to grant a lease over land where the
book value of the land is $5 million (GST exclusive)
What are the land transaction or more in greater Melbourne or $3 million (GST
exclusive) or more in regional Victoria and for
requirements? a term exceeding five years,
The 11 land transaction requirements are listed • making an offer of compensation under the LAC
below. A more detailed explanation of each of the Act, or Part 5 of the PE Act where the total amount
requirements is provided later in Part 2. of compensation is $1 million (GST exclusive) or
more, and
Requirement 1: Accountability, transparency and • making an offer of additional compensation under
legislation the LAC Act, or Part 5 of the PE Act to settle a
disputed claim.
Agencies must ensure all land transactions are
conducted to achieve accountability and Requirement 4: Valuer-General Victoria (VGV)
transparency and are undertaken in accordance valuation
with relevant legislation.
Before undertaking a land transaction agencies
Requirement 2: Due diligence must obtain a certified current market (or rental)
valuation of the land from VGV, unless the
Agencies must conduct an appropriate level of due
transaction is between general government (GG)
diligence to ensure they are fully informed of the
sector agencies based on the book value of the land.
status and attributes of the land before undertaking
a land transaction. Requirement 5: Sale price and rent received
Requirement 3: VGLM approval Agencies must not sell (grant a lease or an interest
in) any land at a price, which is less than the current
Unless the transaction is between two agencies,
market (or rental) value of the land as determined by
agencies must obtain VGLM approval to undertake
VGV unless the transaction is between GG sector
a land transaction, before:
agencies based on the book value of the land.

Victorian Government Land Transactions Policy 10

Victorian Government Land Transactions Policy

Requirement 6: Purchase price and rent paid Requirement 10: Sale of land with a public land zone

Agencies must not purchase (acquire a lease or Agencies must not offer land with a public land zone
an interest in) any land at a price, which is greater for sale, unless the land is being sold to another
than the current market (or rental) value of the agency that can own public zoned land, a local
land as determined by VGV unless the transaction council or the Commonwealth.
is between GG sector agencies based on the
book value of the land. Requirement 11: Lease with option to purchase

Requirement 7: Offer of market value or financial Agencies must not grant a lease of land that
loss compensation based on VGV valuation contains an option to purchase unless it is granting
the option to another agency.
Agencies must not offer an amount of market value
compensation under the LAC Act or financial loss Where can I find out more about the
compensation under Part 5 of the PE Act that is
more than the assessment of compensation
land transaction requirements?
determined by VGV, unless the matter has been The rest of Part 2 provides a detailed explanation
referred to the Supreme Court of Victoria (Supreme of each requirement in the policy and the obligations
Court) or Victorian Civil and Administrative Tribunal they impose on agencies. Some sections deal with
(VCAT) for determination. more than one land transaction requirement.
Each section starts with a list of the requirements
Requirement 8: Land exchange
relevant to that section.
Agencies must not undertake a land transaction
that involves the exchange of land.

Requirement 9: Sale by public process

Agencies must sell land using a public process,

unless the land is being sold to another agency, local
council or the Commonwealth in accordance with
the requirements of the first right of refusal (FROR)
process in the landholding policy.

11 Victorian Government Land Transactions Policy

 Land Transaction Requirements

2. A
 ccountability, transparency
and legislation
This section explains how the accountability, transparency
and legislation requirement in the policy operates

Requirement 1: Agencies must ensure all land conditions on the exercise or scope of the power,
transactions are conducted to achieve such as financial thresholds.
accountability and transparency and are
undertaken in accordance with relevant legislation. At times an agency may conduct a land transaction
on behalf of another agency. These arrangements
may be required to deliver a government project or
Background policy outcome or help agencies that do not
The Victorian government delivers a wide range of undertake land transactions as part of their core
services and support for the community. To do this business. To demonstrate accountability, the nature
most effectively, the community must trust that the and scope of the arrangement that authorises one
government is acting in its best interests. agency to act on behalf of the other must be
documented in writing.
The requirement in the policy that agencies achieve
accountability, transparency and comply with What is transparency?
relevant legislation helps ensure the Victorian
government is upholding the highest standards Transparency involves agencies showing they have
of conduct when undertaking land transactions. acted in an open and honest way when conducting
land transactions and all obligations under the
What is accountability? Victorian public sector integrity system have been
satisfied.
Accountability means that agencies are responsible
for the actions taken and decisions made about land The main way agencies can do this is by establishing
transactions. and following policies, procedures and processes
that support fair and transparent decision-making
Legislation generally confers each agency’s powers, through:
duties, and functions and sets out who can • decision-makers that are impartial and use
undertake a land transaction on behalf of the objective criteria to make decisions based on
agency. This may include a Minister, Department the facts and evidence,
Secretary, Chief Executive Officer, Board, statutory
• maintaining clear records of all land transactions,
authority, or statutory officer.
and
The primary way that agencies can show • clearly communicating decisions about land
accountability in land transactions is by ensuring: transactions.
• that the decision-maker has all the information
A range of policies, procedures and processes must
required to make a well-informed decision, based
be established and followed. This includes policies,
on available facts and supporting information, and
procedures and processes that govern how agencies
• that the right decision-maker, or an authorised undertake land transactions, as well as procurement,
delegate, has approved the transaction. accounting and finance policies. These policies and
procedures must be supported by governance
Sometimes legislation allows a decision-maker to arrangements and controls, to ensure they are being
delegate their power to undertake land transactions followed and transparency is being maintained.
to another person or position. Where a delegation is
in place, agencies must ensure there is a record of Depending on the nature, value and complexity of
the delegation, and any decisions are made under a transaction, an agency may need to take extra
the delegation, including any limitations or steps to show that a transaction is transparent.

Victorian Government Land Transactions Policy 12

Accountability, transparency and legislation

This may include obtaining legal advice, or advice When does the requirement to achieve
from other experts.
accountability, transparency and follow
Agencies will also need to appoint a probity legislation apply?
practitioner before commencing any large or
complex transaction, such as selling land through This requirement applies when an agency
a multi-stage EOI or tender. A probity practitioner undertakes any of the land transactions covered
will help an agency identify and address any probity by the policy. This includes:
issues and risks, provide independent advice on • the sale of land, or an interest in land
how to respond to probity issues, and verify that • the purchase of land, or an interest in land
the process is accountable and transparent. If you
are unsure whether your transaction is large or • granting or acquiring a lease over land, and
complex, you should contact VGLM. • making an offer of compensation under the LAC
Act or Part 5 of the PE Act.

The requirement applies to all land transactions

regardless of whether the transaction requires VGLM
approval. VGLM may conduct compliance audits of
Agency tip:
transactions that fall below the VGLM approval
threshold to check they meet the requirements in the
You can find a probity practitioner on the policy.
professional advisory services panel at You can find more information on VGLM compliance
www.buyingfor.vic.gov.au. audits in Part 2 Section 4.

When is a transaction in accordance Who is responsible for ensuring land

with legislation? transactions achieve accountability,
transparency and follow legislation?
A land transaction is undertaken in accordance with
legislation when the right decision-maker, or An agency is responsible for ensuring that its land
delegate, has undertaken the transaction complying transactions meet this requirement. If the
with any requirements set out in legislation. transaction requires VGLM approval, VGLM will
check that the transaction achieves accountability,
Before undertaking a land transaction, agencies transparency and follows legislation as part of its
must identify the legislation that applies to the land review. When an agency submits a transaction for
transaction and ensure they conduct the transaction VGLM approval, it is required to describe the
in compliance with any limitations or conditions in legislation that supports the transaction, state who
the legislation. Some common limitations and approved the transaction, and provide copies of
conditions include prescribing who can approve a approval documents. Depending on the nature,
land transaction or who needs to be consulted, the value and complexity of a transaction, VGLM may
types of transactions an agency can undertake and also ask agencies to provide other documents to
how they can undertake them. show they have met this requirement, including
copies of delegations, decision-making records,
In cases where legislation affords agencies the and internal policies, processes and procedures.
general power to undertake land transactions, they
are required to comply with the policy requirements
when doing so. However, the policy does not override
How does an agency apply this
any specific powers or obligations in legislation. requirement in practice?
Where a legislative provision expressly allows an
The checklist below provides a list of things
agency to undertake a land transaction based on
agencies need to do to achieve accountability,
terms or at a price determined by the decision-
transparency and follow legislation when
maker, that transaction may be exempt from one
undertaking land transactions. The list is not
or more policy requirements.
exhaustive and there may be further requirements
You can find out more about exemptions in Part 3. that apply to different types of land transactions.
You can find out more about the transaction
specific requirements in Part 4.

13 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Table 4: Accountability, transparency and legislation checklist

Accountability, transparency and legislation checklist

The decision-maker has power under your agency’s legislation to undertake the transaction

The agency has records to show that the decision-maker had all the information needed to make
a well-informed decision

The agency has a written record of the decision to undertake the transaction and this record has
enough information for an independent review

The decision is consistent with legislation, Victorian government policies, and an agency’s own
policies, procedures and processes

If a decision-maker is a delegate, you have checked that:

• the legislation allows the delegation
• the delegation is current
• the delegation applies to the decision-maker, and
• the decision has been made under the delegation.

If an agency is conducting a transaction on behalf of another agency, there is a document in

writing supporting the arrangement

The roles, responsibilities and expectations of agency staff involved in land transactions are
clearly defined and documented

Consistent and transparent processes for land transactions have been established and followed
that ensure all potential participants in a transaction are treated fairly and equally and have
access to the same information

Decisions related to the land transaction are based on an objective assessment of relevant facts,
criteria and evidence

Procedures and processes to identify and address actual or perceived conflicts of interest have
been established and followed, and all actions taken to address any conflict are recorded

All stages of the transaction are documented and transaction records and documents are stored
following the record keeping requirements of your agency, the Public Record Office of Victoria,
and relevant legislation

Information related to the transaction is kept secure and confidential

If the transaction is large and complex, a probity practitioner, legal adviser and other relevant
experts are engaged

All government and agency specific procurement, finance and accounting policies are followed

Victorian Government Land Transactions Policy 14

Accountability, transparency and legislation

Accountability, transparency and legislation checklist

If an agency uses the services of an agent (including a licensed real estate agent or vendors
advocate) or consultant, it must ensure:
• before being appointed, the agent or consultant provides a written declaration confirming
they have no conflict of interest (real or perceived) or financial interest in the transaction
• the agent or consultant has provided evidence of insurance, including professional indemnity
insurance that reflects the nature of their engagement
• the agent or consultant is not also appointed by VGV as the Valuation Services Panel (VSP)
valuer to value the land
• the agency has followed Victorian government and agency specific procurement policies
in appointing the agent or consultant, and
• the agent or consultant has a clear scope of work and there are methods and procedures
to provide reasonable assurance that the agent or consultant acts with accountability and
transparency and follows legislation and government policy during their engagement.

The agency has complied with all relevant legislation in undertaking the transaction.
This includes the Act that confers power on the agency to undertake the transaction
and requirements under any other Acts that may apply, such as the Sale of Land Act 1962,
Transfer of Land Act 1958, and Retail Leases Act 2003

All obligations under the Victorian public sector integrity system are satisfied, and standards of
behaviour accord with any applicable code of conduct issued by the Victorian Public Sector
Commissioner under the Public Administration Act 2004 and all legislative obligations.

Complying with the VGLM approval and valuation Where can I find out more?
requirements in the policy, is also critical to showing
that an agency has met the accountability, VGLM can provide agencies with advice about
transparency and legislation requirement. You can whether a proposed transaction meets the
find more information on each of these requirement to achieve accountability, transparency
requirements in Part 2. and follow legislation. An agency can seek advice by
emailing vglm.admin@delwp.vic.gov.au to request an
What should an agency do if a land early engagement meeting or by submitting a
request for policy advice through VGLM Online.
transaction does not meet the
requirement to achieve accountability, You can find more information on how this
transparency and follow legislation? requirement applies to specific transactions
in Part 4.
If an agency believes that a land transaction did not
meet this requirement, it should advise VGLM.

In some circumstances, it will be too late to correct

the transaction, but VGLM can advise on options
for managing the issue and work with agencies to
put strategies in place to avoid non-compliance in
the future.

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 Land Transaction Requirements

3. Due diligence
This section explains how the due diligence requirement
in the policy operates

Requirement 2: Agencies must conduct an Section 3 will help agencies identify the reasonable
appropriate level of due diligence to ensure they steps for conducting due diligence before
are fully informed of the status and attributes of undertaking a land transaction.
land before undertaking a land transaction.
As every parcel of land is different, the due diligence
steps that are reasonable will vary from transaction
Background to transaction. Agencies are encouraged to obtain
Issues associated with land can be complex and expert advice when conducting due diligence,
may affect its value and how an agency can use particularly when conducting large or complex
or develop it. Therefore, it is important to fully transactions or when the agency is not used to
understand the status and attributes of the land conducting due diligence.
before making any decisions that may have
There are two types of due diligence activities under
financial or other risks for the State.
the policy:
Due diligence refers to the reasonable steps taken
1. General due diligence: These are steps an
to establish the status and attributes of the land
agency needs to consider, and complete as
before undertaking a land transaction. There are
necessary, before every transaction, and
some important reasons why performing due
diligence is essential before undertaking a land 2. Contamination due diligence: These are steps
transaction, including: which are mandatory before every land
• if an agency is purchasing, leasing or acquiring transaction.
land, it can ensure that it is suitable for its
intended use The rest of the section will explain both types of
due diligence activities and the related steps.
• if an agency is selling land, it meets the
requirement to disclose certain information to
potential purchasers under section 32 of the General due diligence
Sale of Land Act 1962, and ensure the information
There are several general due diligence steps an
provided is complete and accurate
agency may need to conduct before undertaking
• to ensure an agency has the information a land transaction. The steps required will depend
necessary to comply with the contaminated on the individual characteristics of the land, such
land duties under the Environment Protection as its location, past and present use, the type of
Act 2017 (EP Act) transaction, and any existing information an agency
• so that VGV has the information required to has about the land. In some cases, an agency may
consider all matters affecting the land in need professional advice to assist them to complete
determining its current market value the general due diligence steps.
• if possible, issues or risks associated with the land
When VGLM reviews a request for approval to
can be mitigated by including special conditions
undertake a land transaction, it will check whether
in the contract, lease terms or conditions of an
an agency has conducted an appropriate level of due
offer of compensation under the LAC Act or
diligence. An agency must be able to demonstrate it
Part 5 of the PE Act.
has considered each of the general due diligence
steps, and when a step has not been undertaken,
be able to explain why it wasn’t necessary.

Victorian Government Land Transactions Policy 16

Due diligence

As a starting point, the following tables describe

some of the most common forms of general due
diligence and where an agency can find the
information it needs to satisfy the due diligence
requirement.

Table 5: Preliminary due diligence

Preliminary due diligence

The preliminary steps taken by an agency when proposing to undertake a land transaction.

Task Where you can find the information

Confirm the type of transaction. Conduct a review of any information or documents

the agency has related to the land and proposed
transaction.

Confirm there is nothing preventing an agency Take the following steps:

from undertaking the land transaction, including: • conduct a title search to confirm whether the
• the type of land, including whether it is Crown land is Crown land or freehold land
land, reserved Crown land or freehold • check the requirements in other government
• if an agency is selling land it has complied with land management policies to ensure any
the FROR process in the landholding policy preconditions for selling land have been met,
• if an agency is selling Crown land it has complied including the landholding policy, SCLA policy
with the requirements in the SCLA policy and land use policy
• if an agency is selling Crown land and native title • contact the Land Justice Unit at DoJCS
rights or interests exist, there is an agreement if native title rights or interests exist
with the relevant Traditional Owner group, and • review relevant legislation.
if no Traditional Owner group exists, you have
obtained advice from the Land Justice Unit at
the Department of Justice and Community
Safety (DoJCS) about how to proceed
• if an agency is selling land, any strategic land
use assessment being conducted in relation to
the land under the land use policy has been
completed, and
• the agency has legal authority to transact
the land.

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 Land Transaction Requirements

Table 6: Legal due diligence

Legal due diligence

The steps taken to understand legal implications and restrictions associated with the land.

Task Where you can find the information

Confirm land details and encumbrances by Conduct a title and plan search, which will provide
obtaining title and plan details. A plan can include the following land details:  
a plan of subdivision, lodged plan, registered plan, • title particulars, including the volume and folio
strata plan, cluster plan, or plan of consolidation. for the land
• address of land
• name(s) of the registered proprietor(s)
• registered encumbrances or access
issues affecting the subject property  
• land description (area, dimensions)  
• any common property that may be subject
to an owners corporation.

When to get professional advice?

You may want to get professional advice to
understand any encumbrances, use restrictions,
owners corporation or other matters disclosed in
the title and plan particulars.

If you are purchasing, acquiring or leasing land, Conduct a title search to identify the registered
confirm you are dealing with the person with the proprietor(s) of the land. If the relevant party is
legal authority to undertake the transaction, or a company, you can conduct a company search
someone authorised to act on their behalf. via the Australian Securities and Investments
Commission to check that the company is
registered and the people you are dealing with
are the directors of the company.

If you are dealing with a representative or

delegate you should request a copy of the
authorisation or delegation.

When to get professional advice?

You may want to get professional advice to
confirm you are dealing with the legal owner of
the land.

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Due diligence

Table 7: Survey due diligence

Survey due diligence

The steps taken to ensure the accuracy of land boundaries and confirm dimensions and area.

Task Where you can find the information

Confirm the land boundaries, or leased area. You can refer to the diagram in the plan to help
confirm the land boundaries. This may include, a
This will help you ensure the boundaries are plan of subdivision, lodged plan, registered plan,
accurate and any issues such as encroachments strata plan, cluster plan, or plan of consolidation.
can be investigated and addressed before an
agency undertakes the transaction. However, sometimes land boundaries and features
in the plan diagram may not reflect the land which
you believe you are transacting. For example, a
boundary fence may not be placed in accordance
with the land boundary in the plan, or an
easement may have been unlawfully built over.

If you are unsure, the Surveyor-General Victoria

(SGV) may be able to assist and advise in relation
to the status of the land and plan and survey
requirements (including a re-establishment
survey). If you are leasing land and unsure of
the leased area, you must obtain a lease plan.

Table 8: Building due diligence

Building due diligence

The steps taken to ensure the buildings and improvements on the land are safe and if not the
cost of addressing any safety issues.

Task Where you can find the information

Confirm there are no safety issues related to any You can find a range of guides on building safety
building or improvements on the land. This may on the Victorian Building Authority website, and
include electrical safety, building services, heater information about combustible cladding on the
safety, illegal building work, or the presence of Cladding Safety Victoria website.
asbestos or combustible cladding.
When to get professional advice?
You may want to get a professional building
inspection if you suspect the building or
improvements may have safety issues. Further
advice may be required to understand the cost
of addressing any safety issues identified.

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Table 9: Planning due diligence

Planning due diligence

The steps taken to understand how the planning provisions, such as a zone and any overlays,
set out in the local planning scheme may affect how the land can be used and developed.

Task Where you can find the information

Confirm the land zone and any overlays. Conduct a search in VicPlan using the land's
address to obtain a planning report that will
include a description of the land zone and
overlays. You can find out more about specific
zones and overlays by browsing the approved
planning schemes in Victoria.

When to get professional advice?

You may want to get professional advice to find
out more about how the land zone and overlays
impact on how you can use or develop the land.

An agency that requires planning scheme changes

to land it owns can apply for assistance through
the Government Land Planning Service.

Confirm if there are any proposed or granted Contact the relevant local council for advice about
planning permits for any land nearby that may proposed and current permits.
affect the use and development of the land.

Confirm if the site is subject to bushfire risk. Conduct a search in VicPlan using the land's
address to obtain a planning report that will
identify if the site is within a Bushire Management
Overlay (BMO) or Bushfire Prone Area (BPA) and
requires risk-based planning to manage the
bushfire hazard.

Contact the relevant fire authority for advice

about any potential bushfire hazards.

When to get professional advice?

You may want to get professional advice to find
out more about how the BMO or BPA impact on
how you can use or develop the land.

Confirm whether the land is subject to any You can find out whether land is affected by a
unexploded ordnance (UXO). UXO by searching the Commonwealth’s UXO
mapping application online.

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Due diligence

Table 10: Ecological due diligence

Ecological due diligence

The steps taken to confirm any significant environmental values that may affect the value
and future use of the land.

Task Where you can find the information

Confirm whether an environmental significance Conduct a search in VicPlan using the land's
or vegetation protection overlay affects the land. address to obtain a planning report that will
include a description of any overlay.
Identify any environmental encumbrances on title.
Examples of environmental encumbrances Conduct a title search showing any registered
include:   encumbrances on land.
• Registration as a biodiversity offset site
When to get professional advice?
• Trust for Nature covenant under the Victorian
Conservation Trust Act 1972, and You may want to get environmental expert advice
• Any conservation agreement recorded on to understand any environmental encumbrances
title through an agreement under section 173 affecting the land.
of the PE Act.

Confirm whether the land contains native Conduct an online address search in the Native
vegetation, threatened species, threatened Vegetation Information Management System to
ecological communities and/or is located in a explore native vegetation and biodiversity assets
biodiversity conservation strategy area. on the land.

When to get professional advice?

You may want to get expert advice to understand
the responsibilities and obligations you may have
in relation to the following:
• native vegetation
• threatened specifies and/or ecological
communities
• significant trees, or
• land located in a biodiversity conservation
strategy area.

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 Land Transaction Requirements

Table 11: Historical places, objects and archaeological sites due diligence

Historical places, objects and archaeological sites due diligence

The steps taken to confirm whether any historical heritage assets may limit how the land can
be used and developed.

Task Where you can find the information

Confirm whether a heritage overlay affects the Conduct a search in VicPlan using the land's
land. address to obtain a planning report that will
include a description of any overlays.

Confirm whether a place or object on the land is Conduct a search of the VHR online to determine
included in the Victorian Heritage Register (VHR) whether there is a heritage place or object on
and whether a heritage permit is required for the land.
activities on the land.
If the land, or part of the land, is listed on the
VHR you may need a heritage permit from
Heritage Victoria before undertaking any works.

When to get professional advice?

You may want to get expert advice to understand
the responsibilities and obligations you may have
in relation to the heritage values.

Confirm whether the land is a historical Conduct a search of the Victorian Heritage
archaeological site and whether consent is Inventory online to determine whether the land
required for the activities proposed at the site. is a historical archaeological site.

If the land is a historical archaeological site you

need consent from Heritage Victoria before
undertaking any activities.

When to get professional advice?

You may want to get expert advice to understand
the responsibilities and obligations you may have
in relation to the archaeological values.

Victorian Government Land Transactions Policy 22

Due diligence

Table 12: Cultural heritage due diligence

Cultural heritage due diligence

The steps taken to understand how any use or development of the land could affect Aboriginal
cultural heritage.

Task Where you can find the information

Confirm whether the land is in area of cultural Conduct a search of the online Aboriginal
sensitivity. This includes registered Aboriginal Cultural Heritage Register and Information System
cultural heritage places, as well as landforms and (ACHRIS) to determine if the land is in an area of
land categories that are generally regarded as cultural heritage significance.
more likely to contain Aboriginal cultural heritage.

Confirm if the proposed works require a Cultural If the area is associated with cultural heritage
Heritage Management Plan (CHMP). sensitivity you can check the Aboriginal heritage
planning tool online to see if your proposed use
or development of the land classifies as a ‘high
impact activity’ that will require a CHMP.

You can find more information on the

Aboriginal Victoria website:
www.aboriginalvictoria.vic.gov.au

When to get professional advice?

If you determine the land is in an area of cultural
heritage sensitivity and a ‘high impact activity’
is planned, you will need to engage a heritage
adviser. You should also seek advice from a
cultural heritage adviser if you’re completing
an activity that is not a ‘high impact activity’
but may harm Aboriginal cultural heritage.

Agency tip: Contamination due diligence

Contamination on land can cause harm to human
To help you conduct the general due health and the environment. If an agency owns or
diligence required before undertaking manages contaminated land (including
a land transaction, you can find a list groundwater), they need to comply with the
contaminated land duties under the EP Act. These
of online resources in Part 6 Appendix 1. are the:
• duty to manage risks of harm from contamination,
and
• duty to notify Environment Protection Authority
(EPA) of contamination in particular
circumstances.

These duties are in addition to the general

environmental duty to manage activities on land
to reduce the risk of harm from your activities to
human health and the environment, and from
pollution and waste.

23 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Contamination can also have a material impact on What is contamination?

land value, and how the land can be used and
developed by agencies. The EP Act defines land (including groundwater
and structures permanently attached to land) as
Given the risks and responsibilities associated with being contaminated if waste, a chemical substance
contaminated land an agency must conduct or prescribed substance is present on or under the
contamination due diligence before undertaking any surface of the land, and it:
land transaction, and provide the results, including • is present in a concentration above the
any expert reports, to VGV for consideration in background level, and
determining the current market value of the land.
• creates a risk of harm to human health or the
If an agency cannot complete the required level environment.
of due diligence before making an offer of
compensation under the LAC Act, or PE Act You can find out more about contamination on the
special arrangements may apply. You can find EPA website: www.epa.vic.gov.au.
out more in Part 4 Section 3.
What contamination due diligence is required?
The policy prescribes a three-step process for
conducting contamination due diligence. These
requirements are mandatory for agencies
Agency tip: transacting land but are not a substitute for any
other contamination due diligence that may be
required by law or under other government policies
To ensure VGV can consider the impact of
and directions.
contamination on the value of the land, you
should conduct your contamination due The extent of due diligence required will depend on
an agency’s findings at each step. In other words,
diligence before requesting a valuation.
as knowledge of contamination changes, the level
When VGLM reviews a request for approval of expected due diligence changes. For example,
to undertake a land transaction, it checks step 1 is mandatory so an agency must undertake
that agencies have undertaken the required an initial review before conducting all land
transactions. However, an agency is only required to
level of contamination due diligence and complete steps 2 and 3 if there is a finding of known
provided the results to VGV. or suspected contamination in the previous step.
If an agency has not undertaken the An agency must maintain records of land
required due diligence or provided VGV transactions, including evidence that the required
with all the required information, VGLM level of due diligence is completed, and must, upon
request, make these available to VGLM.
will ask the agency to obtain updated
valuation advice from VGV. Ensuring that The rest of this section provides more information
you have provided VGV with all the required on each step in the contamination due diligence
process, where you can find help to complete each
contamination due diligence helps prevent
step, and how the outcome of each step may impact
any delay in the VGLM approval process. on the land transaction.

Victorian Government Land Transactions Policy 24

Due diligence

Contamination due diligence: Step 1

Step 1 is the initial review phase. In this phase an
agency must qualitatively assess the potential for
contamination to be present. This phase is required
for all proposed land transactions. The table below
sets out how to undertake the initial review phase.

Table 13: Contamination due diligence step 1

Where you can find the

Considerations Steps/tasks
information

The land’s past and present Review agency information Review any information or
uses, and surrounding land uses documents that an agency has
related to the land. This may
include previous advice or
reports from a contaminated
land expert, records of
contaminating incidents, or
activities and events associated
with the land, including
insurance claims.

Review online resources This includes online planning,

mapping, spatial and EPA
resources. There is a list of
resources in Part 6 Appendix 2.

Review public records This includes conducting a

historical title search to identify
who owned or may have used
the land in the past, and a
general internet search to
identify any records of
contaminating incidents,
activities or events associated
with the land.

Identify activities that are often There is a list of activities that

considered to be a potential are often considered to be a
cause of land contamination potential cause of land
contamination in Part 6
Appendix 3.

25 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Where you can find the

Considerations Steps/tasks
information

Obvious physical evidence of Check the land for the If possible, conduct a site
likely contamination presence of: inspection.
• areas of obvious filling, such
as mounds, filled pits, or
stockpiles
• in-ground pipes and other
infrastructure
• stained and/or odorous soils
• waste materials stored at or
near the surface of the land,
and
• chemical or fuel storage
areas.

Initial review phase outcomes 2. Potential contamination

There are two possible outcomes of the initial review Where the initial review phase suggests the
phase. presence of contamination, further detailed
investigations are required and the agency must
1. No known or suspected contamination move to step 2 of the due diligence process before
undertaking the transaction. The findings of an
Where the initial review phase finds there is no initial review will suggest the presence of
known or suspected contamination on the land, contamination if they show the land is contaminated
an agency is not required to conduct any further or contamination is reasonably foreseeable.
contamination due diligence before it undertakes
the transaction. An agency should include findings If an agency identifies potential contamination on
of the initial review phase in any request to VGLM land that it owns or manages, it may trigger a duty
seeking approval to undertake the transaction. to manage or notify under the EP Act. You can find
more information on these duties on the EPA
website: www.epa.vic.gov.au

Victorian Government Land Transactions Policy 26

Due diligence

Contamination due diligence: Step 2

Step 2 involves engaging a qualified environmental
expert to undertake a preliminary site investigation
(PSI). A PSI is also sometimes called Preliminary
Environmental Site Assessment (PESA) or Phase I.
The table below sets out how to undertake the PSI
phase of contamination due diligence.

Table 14: Contamination due diligence step 2

Where you can find the

Considerations Steps/Tasks
information

PSI Engage a suitably qualified expert If you are unsure where to find a
(generally a contaminated land contamination expert, contact
consultant) to undertake a PSI the Department of Treasury and
consisting of the following activities:    Finance (DTF) Land and
• desktop site history review Property Group.
• analysis of previous advice
prepared in relation to
contamination, or potential
contamination, on the land
including reports by contaminated
land experts     
• site inspection by a qualified
expert, and
• if deemed necessary by the expert
having regard to the risk of
contamination, limited soil testing.

PSI outcomes: If a PSI identifies potential contamination on land

that an agency owns, it will trigger a duty to manage
There are two potential outcomes of the PSI phase. the contamination under the EP Act. If the
If the PSI identifies contamination or potential contamination is present in levels above certain
contamination, and further investigations are thresholds and is exposing a person to
recommended, an agency must move to step 3 contaminants, or is moving, has moved or is likely to
in the contamination due diligence process. move off the land, an agency also has a duty to
notify under the EP Act. You can find more
1. No or low risk of contamination identified information on these duties on the EPA website:
www.epa.vic.gov.au
Where the PSI finds no or a low risk of contamination
and the expert does not recommend any further
investigations, an agency is not required to conduct
any further contamination due diligence before it
undertakes the land transaction.

2. Contamination identified

Where the PSI finds evidence that the land is, or may
be, contaminated and further investigations are
recommended, an agency must move to step 3 of
the due diligence process before undertaking the
transaction.

27 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Contamination due diligence: Step 3

Step 3 involves engaging a qualified environmental
expert to undertake a detailed site investigation
(DSI). A DSI is sometimes also called a Phase II
Environmental Site Assessment. The table below
sets out how to undertake the DSI phase of
contamination due diligence.

Table 15: Contamination due diligence step 3

Where you can find the

Considerations Steps/Tasks
information

DSI Engage a suitably qualified If you are unsure where to

expert (generally a find a contamination expert,
contaminated land consultant) contact the DTF Land and
to undertake a DSI. This will Property Group.
include testing for contaminants
in the land. For example, in soil,
soil vapour, ground water,
surface water, or any mounds,
materials or stockpiles on the
land.

The DSI may lead to further

investigations or advice being
required from a qualified expert,
including the following:
• advice to quantify the
contamination risks
• advice on the scope and cost
of remediation, or risk
mitigation measures to
remove or reduce the
contamination risk, and
• health or ecological risk
assessments.

DSI outcomes: If remediation is pursued, the parties to the

transaction will need to decide who is responsible for
1. Contamination confirmed, but it doesn’t present remediation, and any ongoing risks. An agency will
an unacceptable risk and the risks and need to advise VGV about the responsibilities and
responsibilities of the contamination can be costs associated with remediation, as they will
managed inform the value of the land. Agencies should seek
advice from an expert on the expected costs of
An agency may undertake the land transaction, remediation or other measures that may be
provided: implemented to remove, reduce or manage
• based on legal advice, the risks associated with contamination.
land contamination can be mitigated using special
conditions in the contract, lease agreement or If a land transaction involves contaminated land,
offer of compensation, and/or agencies need to be aware of their responsibilities
• the land can be remediated, or risk mitigation under the EP Act. An agency purchasing,
measures implemented, before an agency compulsorily acquiring or leasing contaminated land
undertakes the transaction. will need to comply with the duty to manage or

Victorian Government Land Transactions Policy 28

Victorian Government Land Transactions Policy

notify under the EP Act and may be required to bear Are there any exemptions to the due
the costs of any contamination it causes to the land.
An agency selling contaminated land may be
diligence requirement in the policy?
pursued by the new owner for costs associated with There are no exemptions from the due diligence
managing contamination on the land that it requirement in the policy. However, if an agency
previously caused or contributed to. You can find cannot complete the required level of contamination
more information on these duties on the EPA website: due diligence before making an offer of
www.epa.vic.gov.au compensation under the LAC Act or Part 5 of the PE
Act, special arrangements may apply. You can find
2. Unacceptable risk
out more in Part 4 Section 3.
An agency must not undertake a land transaction if
the land presents an unacceptable risk to human Where can I find out more?
health or the environment. In these circumstances,
the risks and responsibilities associated with the The Land and Property Group at the DTF can
land may be too great to progress a transaction provide you with advice on issues related to
even if another party agrees to adopt the ongoing identifying and managing contaminated land.
liability and legal risk. The determination as to
whether an unacceptable risk is present should be
made in consultation with the Land and Property
Group at DTF, having regard to the findings of the
DSI, and any additional expert advice obtained. If the
land is remediated, a contamination expert must
confirm the unacceptable risk has been removed,
appropriately reduced or managed, before the land
can be transacted.

29 Victorian Government Land Transactions Policy

 Land Transaction Requirements

4. Victorian Government Land Monitor

This section sets out the role and functions of VGLM and explains
how the approval requirement in the policy operates

Requirement 3: Unless the transaction is between • attending valuation conferences, dispute

two agencies, agencies must obtain VGLM approval resolution conferences, mediations, and
to undertake a land transaction before: compulsory conferences to maintain probity,
• Agreeing to sell or purchase land (or an interest in and provide policy advice
land) where: • conducting audits to monitor compliance with
– the value of the land or transaction is $1 million the policy, and
(excluding GST) or more, or • delivering an annual assurance report to the
– the land forms part of a group of related Minister for Planning.
transactions by the same seller or purchaser,
including land which is part of a group of VGLM approval
adjoining parcels proposed for sale or purchase,
where the total value of the related land or To support VGLM’s role in providing assurance to
related transactions is $1 million (excluding GST) government, agencies must obtain approval from
or more VGLM before conducting certain types of land
transactions. This is known as the VGLM approval
• agreeing to grant a lease over land where the
requirement.
book value of the land is $5 million (GST exclusive)
or more in greater Melbourne or $3 million (GST The VGLM approval requirement helps to ensure
exclusive) or more in regional Victoria for a term that land transactions undertaken by agencies
exceeding five years comply with the requirements in the policy, or a
• making an offer of compensation under the LAC relevant exemption applies. When VGLM approves
Act, or Part 5 of the PE Act, where the amount a transaction, it confirms that the transaction
of compensation is $1 million (GST exclusive) complies with the policy based on an objective
or more, and assessment of all the relevant facts, circumstances,
• making an offer of additional compensation and evidence. VGLM does not examine the merits of
under the LAC Act, or Part 5 of the PE Act to an agency’s decision to undertake the land
settle a disputed claim. transaction, or the merits of any exemption, unless
the exemption is being granted by the VGLM, or the
Minister for Planning, on advice of the VGLM.
Background
VGLM is an independent function that provides What transactions require VGLM approval?
assurance to government that land transactions The table on the following page sets out the
undertaken by agencies meet the requirements circumstances in which an agency needs to obtain
in the policy. VGLM approval. Transactions between agencies
As part of its assurance role, VGLM supports are excluded from this requirement.
compliance with the policy by:
• reviewing proposed land transactions to confirm
they comply with the requirements in the policy,
or an applicable exemption applies
• providing advice and guidance to agencies to
assist them to meet the requirements of the
policy when undertaking land transactions

Victorian Government Land Transactions Policy 30

Victorian Government Land Monitor

Table 16: When an agency needs to obtain VGLM approval

Land transaction When is VGLM approval required?

Sale of land • The value of the land or transaction is $1 million (excluding GST) or
more, or
Sale of an interest in land
• The land forms part of a group of related transactions by the same
Purchase of land seller or purchaser, including land which is part of a group of adjoining
parcels proposed for sale or purchase, where the total value of the
Purchase of interest in land related land or related transactions is $1 million (excluding GST) or
more.

Granting a lease • The book value of the land that will be leased is $5 million (GST
exclusive) or more in greater Melbourne for a term exceeding five years,
or
• The book value of the land that will be leased is $3 million (GST
exclusive) or more in regional Victoria for a term exceeding five years.

Making an offer of The total amount of compensation offered is $1 million or more.

compensation under the
LAC Act, or Part 5 of the
PE Act.

Making an offer of All offers of additional compensation require VGLM approval.

additional compensation
under the LAC Act, or Part 5
of the PE Act to settle a
disputed claim.

Agency tip: VGLM approval to make an offer of additional

compensation
In some circumstances, you may need to In exceptional circumstances, VGLM may approve
obtain VGLM approval to undertake a land offering an amount of additional compensation to
settle a disputed claim under the LAC Act or Part 5 of
transaction, even if the land value is under
the PE Act.
$1 million. For example, where an agency is
selling or purchasing adjoining parcels of VGLM can only grant approval where the matter is a
disputed claim and the subject of litigation, or VGLM
land or undertaking related transactions,
is satisfied there is a reasonable prospect of
where the combined value of the land or litigation. When an agency requests approval to
transaction is $1 million (GST exclusive) or make an additional offer of compensation it will
more, including purchasing land and an need to provide information and documents to
VGLM that demonstrate exceptional circumstances.
interest in the associated air rights or selling VGLM will consider all the information and
adjoining properties, or lots. It would also documents an agency provides as part of its review.
include circumstances where an agency You can find out more about VGLM approval in these
is seeking to make an additional offer of circumstances, in Part 4 Section 3

compensation to settle a disputed claim.

31 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Are there any exemptions to the VGLM obtain VGLM approval before undertaking a
approval requirement? transaction will depend on the type of
transaction it is conducting. You can find more
The VGLM approval requirement does not apply to information about when an agency should lodge
transactions between two agencies. their request for VGLM approval in Part 4.

Apart from this, unless the land transaction is an How does an agency request VGLM approval
exempt transaction undertaken by a public university to undertake a land transaction?
or a leasing transaction that qualifies for one of the
agency-specific exemptions, there are no exemptions Agencies are required to lodge a request seeking
from the requirement to obtain VGLM approval. VGLM approval to undertake a land transaction
using VGLM Online.
VGLM approval when an exemption from the
land transaction requirement(s) applies What is VGLM Online?

Exemptions apply to individual requirements within VGLM Online is a web-based application established
the policy. They do not exempt an agency from for agencies to submit land transactions to VGLM for
complying with the entire policy. Therefore, when an approval.
agency is relying on an exemption, it must still seek
VGLM approval if the transaction meets the VGLM Who can use VGLM Online?
approval threshold. When an exemption is claimed
Agency employees responsible for managing land
VGLM’s role is to ensure that the:
transactions can register to use VGLM Online. Only
• agency has met all the conditions of the registered agency users can access the system.
exemption. Here, VGLM merely reviews the Agency employees can make a request to register
evidence provided by the agency to support the for VGLM Online at: www.vglm.vic.gov.au
exemption(s) and ensures the exemption
conditions are satisfied. VGLM does not examine How does an agency use VGLM Online to
the merits of any exemption, unless the exemption request approval to undertake a land
is being granted by VGLM, or the Minister for transaction?
Planning, on advice of VGLM (see below), and
• remaining requirements in the policy to which an An agency will be required to complete a submission
exemption doesn’t apply, are met. on VGLM Online. There are different forms for each
transaction type. The forms ask for the information
The only exception is when an agency qualifies for and documents VGLM generally requires in
the public university or agency-specific leasing reviewing a land transaction.
exemptions. When either of these exemptions apply
the agency is also exempt from the requirement for You can find out more about the right form to
VGLM approval. complete in the VGLM Online User Manual (user
manual). The user manual is available in VGLM
Applying for a policy exemption from VGLM Online.

In limited circumstances, VGLM, or the Minister for How does VGLM conduct its review?
Planning on the advice of VGLM, can grant an
exemption from complying with specific VGLM reviews the information and documents
requirements in the policy. provided by an agency to confirm whether the
transaction complies with the requirements in
If an agency wants an exemption from VGLM or the the policy, and/or an exemption applies.
Minister for Planning it will need to request one,
regardless of the value of the land or transaction. The scope of VGLM’s review will depend on the
You can find out more about exemptions in Part 3. facts and circumstances, including the type, value
and complexity of a transaction. The table on the
When should an agency lodge its submission following page lists some of the matters VGLM
requesting VGLM approval may consider as part of its review.
to undertake a transaction?
When VGLM approval is required, agencies must
obtain approval before undertaking the land
transaction. The point at which an agency must

Victorian Government Land Transactions Policy 32

Victorian Government Land Monitor

Table 17: Common features of a VGLM review

Common features of a VGLM review

Legislation permits the transaction, and it complies with any specific requirements set out in the
legislation

The right decision-maker, or delegate, has approved the transaction based on all the available
facts, evidence and supporting information

The planning controls on the land, including the zoning and any overlays

The appropriate level of due diligence has been conducted based on the status and attributes
of the land

The method of transaction proposed, and if it is a sale, that it is being conducted in accordance
with the requirements of a public sales process

A current certified VGV market valuation has been obtained and:

• The valuation is current
• VGV’s valuation reflects the terms and conditions of the proposed transaction, and
• VGV has been provided with copies of any expert reports obtained in conducting its due
diligence.

A check valuation has been obtained (if required), and the VGV and check valuation were
conducted on the same basis

If a VGV valuation and check valuation vary by more than 10 per cent, or use significantly
different methodologies, a conference of valuers was held

Relevant government policies have been complied with, including:

• the agency has complied with the FROR process in the landholding policy before seeking
approval to sell the land
• any strategic land use assessment being conducted in relation to the land under the land use
policy has been completed prior to requesting VGLM approval to sell the land
• if the land is Crown land, a strategic Crown land assessment has been undertaken in
accordance with the SCLA Policy, and the relevant Ministers have agreed to refer the land to
the Assistant Treasurer for sale.

The requirements for any exemptions have been met

33 Victorian Government Land Transactions Policy

 Land Transaction Requirements

What happens when VGLM has completed How long does it take for VGLM to review
its review of a land transaction? a land transaction and make a decision?
VGLM will write to an agency to confirm whether VGLM aims to provide a decision on:
it has provided approval to undertake the land • a sale, purchase, or leasing land transaction within
transaction and whether an exemption from any 10 business days of receiving all the necessary
of the policy requirements applies. information.
If VGLM provides approval to undertake the • making an offer of compensation under the LAC
transaction, it may be subject to terms and Act or Part 5 of the PE Act within seven business
conditions. This helps to ensure land transactions days of receiving all the necessary information.
proceed on the same basis that VGV valued the
If VGLM finds a submission does not include all the
land, and that the terms and conditions of the land
required information, it will contact the agency as
transaction appropriately protect the interests of
soon as possible, to ask for any additional
the Victorian government and community.
information or documents it needs. VGLM will place
If VGLM decides not to provide approval, it will an agency’s request on hold until all the necessary
provide detailed written reasons to the agency information is provided.
explaining its decision.

What happens if VGLM does not approve

a land transaction?
Agency tip:
If an agency disagrees with VGLM’s decision,
it can object to the decision by writing to VGLM. An
objection must include: An early engagement meeting with VGLM
• a statement setting out why the agency disagrees can help reduce the time it takes for VGLM
with the decision of VGLM. The statement must to review an agency request for approval to
address each of the reasons given by VGLM for undertake a land transaction. You can find
not approving the land transaction, and
more information about early engagement
• further supporting documents and information to
support the grounds of objection. VGLM may also
meetings below.
request more information to help it make a
decision.

If VGLM disallows the objection, an agency can refer

the VGLM objection decision for review by the
Minister for Planning through its responsible Minister.

Victorian Government Land Transactions Policy 34

Victorian Government Land Monitor

Does an agency need to comply with the policy • instructing VGV and obtaining valuations
if the land transaction does not require VGLM • releasing the EOI, or registration of interest
approval? • shortlisting potential purchasers, and
Unless an exemption applies, land transactions that • awarding contracts and signing any variations
do not require VGLM approval must still meet the to contracts.
requirements in the policy. An agency must maintain
records of all land transactions that show the How does an agency ask for policy advice from
transaction meets the requirements of the policy VGLM?
and satisfies the conditions of any exemption
An agency can make a request for policy advice
claimed and provide these to VGLM on request.
by completing the policy advice form using VGLM
VGLM may also conduct compliance audits on land Online.
transactions that do not require VGLM approval to
However, before requesting policy advice, agencies
check whether an agency is complying with the
are encouraged to discuss the proposed land
requirements in the policy.
transaction with VGLM. Early engagement can help
You can find more information on compliance audits VGLM ensure it provides the right type of advice.
below.
Maintaining probity at valuation conferences,
dispute resolution conferences, mediations and
Compliance assurance and supporting compulsory conferences.
agencies
VGLM attends certain types of meetings to ensure
VGLM conducts a range of other education and participants are following appropriate probity
compliance activities to help ensure that agencies protocols and procedures. This includes valuation
understand their obligations and provide the conferences, which are meetings between a VGV
government with assurance they are meeting the valuer and check valuer, and dispute resolution
requirements in the policy. conferences which are meetings between a VGV
valuer and a valuer appointed by a private party.
More information on each of these activities is VGLM also attends mediations and compulsory
provided below. conferences where the Supreme Court or VCAT order
parties to meet to try and reach an agreement on
Advice and guidance
the amount of compensation payable under the
VGLM provides advice and guidance to agencies to LAC Act or Part 5 of the PE Act.
assist them in meeting the policy requirements when
In these meetings, VGLM supports compliance with
undertaking land transactions.
the policy by:
VGLM may deliver this assistance through education • helping to maintain probity by ensuring
campaigns, engagement and advice, and guidance participants act with integrity, accountability,
material or in response to a request for advice from and impartiality
an agency. • providing advice on the requirements in the policy,
and
When should an agency ask VGLM for advice?
• in dispute resolution conferences, mediations or
If an agency is uncertain about how the policy compulsory conferences, approving an offer
applies or is proposing to engage in a large, complex including any offer of additional compensation to
and/or unique land transaction it needs to request settle a claim for compensation under the LAC Act
advice from VGLM. or Part 5 of the PE Act.

Agencies must seek advice from VGLM at the earliest As VGLM plays a probity role, it must attend
point possible. This provides the best opportunity for all valuation conferences, dispute resolution
VGLM to work with agencies to ensure the land conferences, mediations and compulsory
transaction meets the requirements in the policy. conferences, even if the value of the land
Where the sale of land is through a multi-stage EOI transaction is below the VGLM approval
or tender, VGLM engagement should occur before threshold.
each critical milestone in the process, including:

35 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Assurance reporting
Agency tip: VGLM is required to deliver an annual assurance
report to the Minister for Planning. The assurance
report will provide a list of transactions reviewed by
Brief VGLM ahead of time if you think
VGLM in the previous 12-month period. The following
you will need approval to make an offer details will be provided for each transaction:
of compensation at a dispute resolution • the name of the agency that conducted the land
conference, compulsory conference or transaction
mediation. When you brief VGLM we will • the type of land transaction
explain what information and documents • VGLM reference number
are needed to help VGLM prepare. • the date of VGLM’s decision, and
• the final land transaction value approved by
You can find more information on VGLM’s role VGLM.
at valuation conferences, dispute resolution
The report will also provide the Minister for Planning
conferences, mediations and compulsory
with details of any non-compliance identified by
conferences in Part 2 Section 5 and
VGLM through the year and identify any mitigation
Part 4 Section 3.
strategies developed to address issues or risks
Compliance audits identified.

VGLM may audit the land transaction records What happens if VGLM identifies non-
of an agency to monitor its compliance with the
policy requirements. Audits may be conducted
compliance with the requirements in
for different purposes, including: the policy?
• as a periodic assurance tool VGLM may become aware of non-compliance in
• to assess any potential breaches of the policy, or conducting its compliance and support activities
• better understand an issue that may have been or where an agency makes a voluntary disclosure.
voluntarily disclosed by an agency to VGLM.
In some circumstances it will be too late to correct
This means that in conducting an audit, VGLM may the transaction, but VGLM can advise on options for
examine a specific land transaction or multiple land managing the issue, and work with agencies to put
transactions that meet specific criteria. strategies in place to avoid non-compliance in the
future.
VGLM will notify agencies if they are subject to a
compliance audit and how to prepare for an audit. VGLM is required to include details of non-
An agency is required to maintain records of land compliance in its annual assurance report to
transactions and must make these documents the Minister for Planning. If an agency discloses
available to VGLM for the purposes of an audit. non-compliance to VGLM, it will be reported as
a voluntary disclosure rather than a detection.
VGLM will advise an agency of the outcome of an
audit in writing, generally within 30 days of finalising
the audit. More information on what happens if
non-compliance is identified, is provided later in this
section.

Victorian Government Land Transactions Policy 36

Valuation requirements

5. Valuation requirements
This section explains how the valuation requirements
in the policy operate

Requirement 4: Before undertaking a land • minimum price for the sale of land or an interest in
transaction agencies must obtain a certified land, or the minimum rent when granting a lease
current market (or rental) valuation of the land • maximum price for the purchase of land or an
from VGV, unless the transaction is between GG interest in land, or the maximum rent when
sector agencies based on the book value of the land. acquiring a lease
Requirement 5: Agencies must not sell (grant a lease • maximum amount of compensation an agency
or an interest in) any land at a price, which is less can offer for market value under the LAC Act or
than the current market (or rental) value of the land financial loss under Part 5 of the PE Act.
as determined by VGV unless the transaction is
As part of the process of obtaining a VGV valuation,
between GG sector agencies based on the book
agencies may also need to obtain a check valuation.
value of the land.
You can find more information on when check
Requirement 6: Agencies must not purchase valuations are required below.
(acquire a lease or an interest in) any land at a
In certain circumstances, streamlined valuation
price which is greater than the current market
arrangements apply for transactions between
(or rental) value of the land as determined by
agencies. This includes using a book valuation
VGV, unless the transaction is between GG sector
instead of a VGV valuation for transactions between
agencies based on the book value of the land.
GG sector agencies. You can find out more about
Requirement 7: Agencies must not offer an amount these arrangements in Part 4 Section 4.
of market value compensation under the LAC Act
or financial loss compensation under Part 5 of the What is a certified current VGV market
PE Act that is more than the assessment of valuation?
compensation determined by VGV, unless the matter
To meet the policy’s valuation requirements, a VGV
has been referred to the Supreme Court or VCAT for
valuation obtained and used by an agency must be
determination.
a current market (or rental) value certified by VGV.

Background What these terms mean in the context of the policy

is explained below.
Agencies must obtain and use a certified current
market valuation from VGV when undertaking land VGV valuation
transactions.
A VGV valuation can be carried out by either:
VGV is required to determine the value of land for • VGV, or
all agency land transactions. It is the government’s
• a member of the VSP that provides independent
valuation authority and has strict processes and
valuation advice on behalf of VGV.
controls to ensure that valuations made are
independent, transparent and correct. Where a member of the VSP conducts a VGV
valuation, VGV will confirm the valuation by
Under the policy VGV’s certified current market
certifying it. You can find out more about how
valuation must be obtained and used to establish
VGV certifies valuations below.
the following:
Agencies need to instruct VGV to undertake the
valuation. VGV will decide whether this is done by
VGV or a member of the VSP. To maintain the
independence of the valuation process, agencies
must not deal with VSP valuers directly.

37 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Certified You can find more information on different types

of land transactions, including when an agency
To meet the valuation requirements in the policy, undertakes a land transaction under the policy in
VGV’s valuation must be certified. Part 4.

All valuations conducted directly by VGV are Is an agency required to obtain an updated
certified valuations. Where a VSP member conducts check valuation when seeking updated
the valuation, VGV will certify that the valuation
valuation advice from VGV?
meets its standards in a form approved by VGV.
It is up to VGV to decide whether an updated check
Current valuation is required when seeking an extension or
valuation review. In making this decision, it will
Unless a valuation is carried out at a fixed date, for
consider matters such as current market conditions
example, to determine an amount of compensation
and whether there have been changes to the nature
under the LAC Act or Part 5 of the PE Act, a VGV
and scope of the transaction, or land.
valuation is only current for a specific period.
Therefore, unless VGV advises it is needed, there
To meet the policy’s valuation requirements VGV’s
is no requirement to obtain an updated check
valuation must be current when an agency
valuation when an agency requests updated
undertakes a land transaction. To assist agencies
VGV valuation advice.
in identifying whether a VGV market valuation is
current, VGV will confirm the date of valuation and
Market valuation
its period of currency when it issues the valuation
report. VGV provides different forms of valuation advice
to agencies. The table on the following page sets
If the currency of a valuation expires before the land
out the forms of certified advice that will meet the
transaction is undertaken, an agency must seek
requirement for a market valuation in the policy,
updated valuation advice from VGV. VGV will decide
and any conditions an agency needs to meet to
whether it can extend the valuation or whether a
rely on that advice.
valuation review is needed.

Agency tip:

If the land transaction requires VGLM

approval, you will need to a make submission
to VGLM based on the updated valuation
even if VGLM has previously approved the
land transaction and there has been no
change to the valuation. This is because
VGLM approval is only valid for the period
VGV’s valuation is current.

Victorian Government Land Transactions Policy 38

Victorian Government Land Transactions Policy

Table 18: Certified VGV advice

Transaction type Advice type Conditions

Sale or purchase of land Certified market valuation

or an interest in land made in accordance with the
Valuation of Land Act 1960 (VL
Act).

Sale or purchase of land Certified assessment of the An agency can demonstrate

or an interest in land value of land based on a that Cabinet or a committee of
specific development outcome Cabinet have endorsed the
that the Victorian government development outcome, or the
requires. responsible Minister or statutory
officer that owns land has
confirmed in writing that the
development outcome supports
an endorsed government policy.

Granting or acquiring a lease Certified market rental

valuation.

Granting a lease Certified pre-determined An agency must have previously

formula for calculating market agreed with the VGV that it is
rent such as a rate card. appropriate to determine the
market rent using a pre-
determined formula.

Offer of market value Certified assessment of

compensation under the LAC compensation made in
Act or financial loss accordance with the LAC Act.
compensation under Part 5
of the PE Act.

VGV also provides other forms of advice that do not

qualify as a market valuation under the policy. The
table on the following page sets out some of that
advice, and why an agency may request it.

39 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Table 19: Other forms of VGV advice

Advice When an agency may need it

Estimate of value To inform agency decision-making about a proposed land transaction or

project.

Agencies are required to obtain and use the current market value of land
as determined by the VGV when conducting a land transaction. Estimates
do not satisfy the requirement. Therefore, an agency must not undertake a
land transaction based on a valuation estimate.

Restricted use value To inform decision-makers when an agency is seeking an exemption to sell
land at a price that is less than the current market value as determined by
VGV because a restriction will be placed on title limiting the use of the land
for public and community purposes.

Assessment of offer To inform VGLM when an agency is seeking an exemption to sell land at a
price that is less than the current market value of the land as determined
by VGV after an unsuccessful public sales process.

Assessment of bid To inform decision-makers in assessing offers received as part of a

multi-stage EOI or tender process for the sale of land.

To inform VGLM when an agency is seeking an exemption to sell land at a

price that is less than the current market value of the land as determined
by VGV after a multi-stage EOI or tender.

Independent advice from To assist:

a member of the VSP in an • VGV in determining the current market value of land. Some common
allied discipline. examples include town planning, engineering and quantity surveying
advice, and
• an agency in determining the appropriate amount of compensation
payable for a loss attributable to disturbance under the LAC Act. Some
common examples include a business valuation, loss of profits
assessment, destruction value of a business, or relocation assessment.

VGV has full discretion in deciding whether to How do I obtain a VGV valuation?
provide an assessment of an offer or bid and may
consider it is not appropriate to provide an There are instructions for obtaining a VGV valuation
assessment in certain circumstances. on the Land.Vic website: https://www.land.vic.gov.
au/valuations/valuations-for-government-land/
request-a-government-land-valuation

When an agency requests a valuation, it must

provide details regarding the land and the proposed
transaction. This includes:
• the proposed terms of the land transaction
• any proposed special conditions, including any
incentives or rebates, or any obligation to
reimburse costs
• details of any lease or licence
• copies of any expert reports, including advice
relating to site suitability, contamination, cultural
heritage, ecology, planning, engineering, traffic
management, and building condition reports

Victorian Government Land Transactions Policy 40

Valuation requirements

• development plans and costs, and any related Who can request a VGV valuation?
development agreement or contract
• if land is being compulsorily acquired under the Section 3 of the VL Act sets out who in an agency
LAC Act, the notice of acquisition, and is authorised to request a valuation from VGV.

• if the valuation relates to a claim for financial loss If an agency is unsure who can request a valuation, it
compensation under Part 5 of the PE Act, should contact VGV.
documents relating to the event that triggered
the claim, for example the contract of sale or the
What is a check valuation?
permit application and a copy of the decision
refusing to grant the permit. A check valuation is a second valuation designed to
provide independent assurance that VGV’s valuation
This information is requested because the terms
is sound and properly made.
and conditions of a transaction, and the status and
attributes of the land can impact on the value of When is a check valuation required?
land.
Only certain VGV valuations require a check
If the valuation is to support a transaction between valuation. The table on the following page outlines
two agencies, the agencies must instruct VGV jointly. when an agency needs to instruct VGV to obtain a
check valuation, and when it does not.

Agency tip:

When VGLM reviews a transaction, it checks

that agencies have provided VGV with all
the required information and that VGV has
based its valuation on the proposed terms
and conditions of the land transaction. If
an agency has not provided VGV with all
the required information, VGLM will ask the
agency to obtain updated valuation advice
from VGV. Ensuring that you have provided
VGV with all the required information helps
prevent any delay in the VGLM review
process.

41 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Table 20: Check valuation requirement

A check valuation is required when: A check valuation is not required when:

• The value of the land is estimated to be • The land transaction is between two agencies
$1 million (GST exclusive) or more • The land transaction is with a local council or the
Commonwealth
• The value of the land or transaction is estimated
to be less than $1 million (GST exclusive).

The VGV may choose to obtain a check valuation Where a VGV and check valuation have been
even where it may not otherwise be required. obtained, an agency must also inform VGV if:
For example, a check valuation may be obtained • the VGV valuation and check valuation vary by
if there is something about the land or transaction more than 10 per cent (using the VGV valuation
that is complex or unique. as the measure), or
What if the valuation is for multiple parcels • the methodology used to value the land differs.
of land estimated to be valued at less than Sometimes a valuation report will provide individual
$1 million individually, but the aggregate valuations for multiple parcels of land that will be
value is likely to be more than a $1 million? sold or purchased separately. In these
circumstances, agencies must compare the VGV
If the valuation relates to lots in a staged public land valuation and check valuation for each parcel of
release or development, an agency will need to land and inform the VGV if any of the individual
obtain a check valuation before each stage. valuations vary by more than 10 per cent.
In all other cases, an agency should consult VGV
What happens when an agency informs VGV
about whether a check valuation is necessary before
requesting the valuation.
there is a variance between the VGV valuation
and the check valuation?
How do I obtain a check valuation?
VGV will consider the two valuations and the
A request for a check valuation is made through variances identified by an agency, to determine
VGV, but a member of the VSP will conduct the check whether a valuation conference is required.
valuation. If an agency believes a check valuation is
If there is a variance, but VGV considers a
required, it must request a check valuation when
conference is unnecessary, it will inform an agency
requesting the VGV valuation.
in writing. If the transaction requires VGLM approval,
VGV will commission both VGV’s valuation and check agencies will need to provide a copy of VGV’s advice
valuation based on the same instructions, but the to VGLM.
check valuer will provide its valuation directly to the
agency. What is a valuation conference?

The check valuation is not a certified current market A valuation conference is a meeting between valuers
valuation and cannot be relied upon by an agency to convened by VGV that provides the VGV valuer and
meet the valuation requirements in the policy. check valuer an opportunity to discuss any material
differences in opinion or approach to valuation
advice provided to an agency.
What happens when an agency receives
VGV’s valuation? VGV can also convene a valuation conference acting
independently or at the request of VGLM. If VGLM
An agency should carefully review VGV’s valuation requests a valuation conference it must be
report and any check valuation report to ensure the convened by VGV.
valuations reflect the terms and conditions of the
land transaction and the VGV and check valuer
undertook the valuation on the same basis. If there
are differences, an agency should contact VGV.

Victorian Government Land Transactions Policy 42

Victorian Government Land Transactions Policy

Who attends a valuation conference?

VGV, any appointed VSP valuers, an agency Agency tip:
representative and VGLM, must attend all
valuation conferences.
If VGV convenes a valuation conference,
The role of VGLM in a conference is to maintain you will need to provide VGLM with copies
probity by ensuring all participants act with integrity, of the VGV and check valuation reports,
accountability and impartiality and provide advice
together with advice from both valuers
on the requirements in the policy if needed. VGLM
must attend all conferences, even if the value of confirming the outcome of a conference.
the land is below the VGLM approval threshold of You should wait until you know the outcome
$1 million. of the conference before requesting VGLM
What happens after a conference? approval to undertake the transaction.

Both the VGV valuer and check valuer will consider

all the matters discussed at the valuation
conference and decide whether to review or confirm
their valuation.

Agencies will receive written advice from both the

VGV and check valuer after a valuation conference
setting out their decision.

43 Victorian Government Land Transactions Policy

 Land Transaction Requirements

What happens when an agency is undertaking Informal discussions and meetings

a land transaction with a private party, and
their valuer disagrees with a VGV valuation? An independent valuation process is integral to
ensuring land transactions undertaken by agencies
When an agency is undertaking a land transaction are accountable and transparent.
with a private party, the private party may seek its
own valuation advice. This is common where an Therefore, there must not be any informal
agency is negotiating the purchase of land, or there discussions or meetings between valuers or an
is a disagreement about the amount of agency and valuers relating to a valuation.
compensation offered under the LAC Act or Part 5
of the PE Act. Can an agency disclose a VGV
In these circumstances, VGV may agree to a dispute
valuation report?
resolution conference, which will generally operate in An agency may disclose a VGV valuation report
the same way as a valuation conference. where required to do so by law or for legal
proceedings.
VGV, any appointed VSP valuer, the private party’s
valuer, an agency representative and VGLM are As valuation reports may contain information that
required to attend a dispute resolution conference. is commercial in confidence, an agency must consult
In some circumstances, the private party and their with VGV if it wishes to disclose a valuation report in
legal advisers or other experts may also attend. any other circumstances.
Like in valuation conferences the role of VGLM is to
provide probity. Therefore, VGLM should be invited to Are there any exemptions from the
all dispute resolution conferences, even if the value requirement to obtain a VGV valuation?
of the land is below VGLM’s approval threshold of
$1 million (GST exclusive). Unless the land transaction is an exempt transaction
undertaken by a public university, or a leasing
Following a dispute resolution conference, VGV will transaction that qualifies for an alternative
consider the matters discussed and decide whether valuation or agency-specific exemption, there are no
to review or confirm their valuation. Agencies will exemptions from the requirement to obtain a VGV
receive written advice from VGV on the outcome. valuation before undertaking a land transaction.

Conferences with other experts In limited circumstances, there are some exemptions
that may apply to allow an agency to undertake a
Sometimes agencies appoint other experts to assist land transaction at a price different from the VGV
them determine matters related to a land valuation. You can find out more about exemptions
transaction that do not relate to the value of land. in Part 3.
For example, this may include business valuation or
business relocation experts appointed to help
agencies determine a fair and reasonable amount of
compensation for loss attributable to disturbance
under the LAC Act. These experts may be appointed
through the VGV’s VSP or directly through agency
procurement processes. For probity, VGLM must
attend any conferences held between an agency's
and private party’s expert(s) aimed at resolving the
matters in dispute between the parties.

Victorian Government Land Transactions Policy 44

Land exchange

6. Land exchange
This section explains how the land exchange requirement
in the policy operates

Requirement 8: Agencies must not undertake a land • the land exchange must be approved by the
transaction that involves the exchange of land. Assistant Treasurer if VGV’s market value of
the land (or the book value, if the land exchange
Background is between GG sector agencies) is less than
$5 million (GST exclusive), and
The price paid for the sale or purchase of land is • if the land exchange was agreed to before 1 July
generally a sum of money. However, under a land 2018 the Assistant Treasurer may approve the
exchange, the price paid for land is (or is reduced by) exchange if it is not practicable to terminate the
the value of the land received in the exchange. arrangement, regardless of the value of the land.
It is a requirement in the policy that an agency must A land exchange may also be exempt if:
not undertake a land transaction that involves the
• legislation expressly allows an agency to
exchange of land. This is because the government
undertake a land exchange, or
does not receive any money that it can reinvest to
deliver infrastructure and services to support the • Cabinet or committee of Cabinet has approved
Victorian community when it undertakes this type terms of a transaction that include a land
of transaction. exchange arrangement.

You can find more information about the exemptions

What is a land exchange? that might apply to the land exchange requirement
in Part 3.
A land exchange (sometimes called a land swap) is
the exchange of land between parties. It includes
arrangements where only land is exchanged, or If a land exchange is approved, do the
there is an exchange of land and a payment to other requirements in the policy apply?
equalise the value.
A land exchange involves the transfer of land
between parties. As explained in Part 1,
Are there any exemptions to the land a transfer from one party to another is treated as
exchange requirement? a sale and purchase and considered a land
transaction under the policy.
Agencies can generally achieve an outcome similar
to a land exchange, by selling and purchasing land in Therefore, if a land exchange is approved, it must
separate back-to-back transactions. comply with the other requirements in the policy,
unless another exemption applies. That means
However, there may be circumstances where the agencies must obtain a VGV valuation and as part
benefits of a land exchange outweigh its impact on of the land exchange arrangement the agency must
the revenue. Therefore, a process has been meet the dual requirements of:
developed for agencies to seek approval to
undertake a land exchange. • not selling land at a price that is less than the
current market value of the land as determined
The type of approval required depends on the value by VGV, and
of the agency’s land included in the exchange, as • not purchasing land at a price that is more than
follows: the current market value of the land determined
• the land exchange must be approved by the by VGV.
Expenditure Review Committee (ERC) if VGV’s
market value of the land (or the book value, if the In practice, if the current VGV market value of the
land exchange is between GG sector agencies) is land involved in the exchange is not equal, an
$5 million (GST exclusive) or more additional payment may be required to ensure the
valuation requirements in the policy are satisfied.

45 Victorian Government Land Transactions Policy

 Land Transaction Requirements

7. Public sales process

This section explains how the public sales process
requirement in the policy operates

Requirement 9: Agencies must sell land What methods of sale will meet
using a public process, unless the land is
being sold to another agency, a local council
the public process requirement?
or the Commonwealth in accordance with There are many methods of sale that may meet the
the requirements of the FROR process in requirements of a public sales process. In all cases,
the landholding policy. the method of sale selected must meet the critical
requirements of a public process set out previously,
Background and result in selling the land at a price that is not
less than the current market value of the land as
Unless an agency is selling land to another agency, determined by VGV.
local council or the Commonwealth in accordance
with the requirements of the FROR process in the Agencies should rely on the advice of a licensed real
landholding policy, land is required to be sold using estate agent, or where selling land is the core
a public process. business of the agency, an expert in that agency,
to determine the most appropriate method for each
A public process provides any interested party with land sale.
a fair and reasonable opportunity to purchase the
land. It can also result in multiple buyers competing
to purchase land, which helps to ensure agencies
achieve the highest possible price.

For these reasons, the public process requirement

is integral to ensuring that the land transactions
undertaken by agencies are accountable and
transparent.

What is a public process?

The critical requirements of a public process for the
sale of land are:
• a public marketing campaign is held to sell the
land using channels that potential purchasers
can easily access
• there has been a reasonable marketing period
• unless VGLM has approved a limited tender or EOI,
the selected method of sale gives anyone the
opportunity to purchase the land.

To meet the public sale process requirement, land

cannot be sold before auction or before an EOI or
tender closes.

Victorian Government Land Transactions Policy 46

Public sales process

Some of the most common sales methods and when

they are likely to be used are listed in the table below.

Table 21: Common methods of sale

Sale Method What is it? When should it be used?

Public auction A public sale conducted by a licensed Where there is likely to be demand for
real estate agent acting as an the land and competition amongst
auctioneer, at a specific place, time potential purchasers.
and date after a public marketing
campaign.

Publicly listed sale The land is publicly advertised for sale, • for the sale of land that failed to meet
and purchasers make their offers its reserve price and passed in after
directly to a licensed real estate agent. an auction
This includes different sales methods • for significant public land releases
used by licensed real estate agents
• for off the plan sales
including sale by set date, EOI, and
private sale. • in circumstances where an auction
may not be possible

Direct tender Tender or EOI is run by an agency in • for land with a limited market,
or EOI accordance with government and because of its value or unique
agency specific procurement policies. features
Offers are accepted from prospective • for the sale of medium to large, or
buyers and considered at a pre- strategically located, land
specified date by an evaluation panel.

Multi-stage EOI An agency runs a multi-stage EOI or • for the sale of large or strategically
or tender tender. It involves an initial approach to located land with significant
the market to identify parties who may development potential or significant
be interested in, and capable of development barriers
delivering an outcome on a parcel of • where an agency is seeking to expose
land through an EOI or registration of land to the market to achieve specific
interest. This is followed by one or more development options
subsequent approaches requesting
• where an agency is seeking to
proposals from the parties who have
achieve a specific development
demonstrated they may be capable of
outcome
delivering the required outcome.

47 Victorian Government Land Transactions Policy

 Land Transaction Requirements

Can a limited EOI or tender process meet

the requirement for selling land using a public
Agency tip:
process?
A limited tender or EOI will only be allowed in special Agencies are required to assess market
circumstances, where an agency can demonstrate
to VGLM that the process still provides a sufficient
led proposals in accordance with the
level of competition and will not unfairly exclude Market-led Proposals Guidelines that
potential buyers. DTF administers. If a market-led proposal
Examples of circumstances where a limited EOI or involves a land transaction, agencies are
tender may meet the public process requirement encouraged to engage early with VGLM to
include: discuss how the requirements in the policy
• where the government is seeking to achieve apply to any proposal.
a policy outcome by selling the land and that
outcome can only be provided by specific types
of entities, or Buy-back clauses
• where the number of potential buyers is limited The requirement to sell land using a public process
because the land is landlocked. means an agency cannot enter a contract of sale to
purchase land that gives the seller the right to buy
An agency must not proceed with a limited EOI or
back the land if the agency wishes to sell it in the
tender until VGLM has confirmed it satisfies the
future. This is because if the right is exercised it
requirements of a public process.
would require the agency to sell land without a
To seek endorsement for a limited EOI or tender public process.
process, an agency will need to submit a policy
advice form using VGLM Online documenting the Does the public process requirement
proposed process and indicating the circumstances apply to the sale of easements or other
and conditions which justify using a limited EOI or
tender.
interests in land?
In contrast to the sale of land, the public process
Agencies considering selling land using a limited
requirement does not apply to the sale of an interest
EOI or tender are encouraged to request an early
in land, such as an easement.
engagement meeting with VGLM.
However, all the other policy requirements apply,
What methods of sale do not meet the including obtaining a VGV valuation, seeking VGLM
public process requirement? approval if the value of the interest is above the
VGLM approval threshold, and not selling the interest
Negotiating directly with a buyer to sell or transfer in land at a price that is less than the current market
land without publicly advertising it for sale does not value of the land as determined by VGV.
satisfy the public process requirement in the policy.
Therefore, unless the sale results from a public Does the public process requirement
process, or an exemption applies, an agency must
not:
apply to the sale of land to other
• sell land to an adjoining owner
agencies, local councils and the
• accept a market-led proposal that involves
Commonwealth?
transferring land to a private party in exchange for Under the landholding policy, before land is listed
building infrastructure or providing services that for public sale, an agency must first offer to sell it
benefit the community on the land to all other agencies, local councils and the
• enter an option agreement, agreeing to sell land Commonwealth. This process is known as FROR.
within a certain period and/or on specific terms
and conditions The public sales process requirement in the
policy does not apply where land is being sold to
• agree to exchange land with another party, or
another agency, local council or the Commonwealth
• agree to transfer land to another party as a gift. in accordance with the requirements of the FROR
process in the landholding policy. This includes

Victorian Government Land Transactions Policy 48

Public sales process

circumstances where an agency has been granted Are there any exemptions from the
an exemption from the FROR process under the
landholding policy.
public sales process requirement?
In limited circumstances an agency may qualify
You can find more information about the FROR
for an exemption from the public sales process
process in the landholding policy. There is also
requirement.
more information on government to government
transactions in Part 4 Section 4. For quick reference, the table below lists the
exemptions that may apply to the public sales
In all other circumstances, agencies must comply
process requirement, subject to an agency satisfying
with the public sales process in the policy unless
the conditions for the exemption. You can find more
an exemption applies.
detailed information on each of these exemptions
later in Part 3.

Table 22: Exemptions from the public sales process requirement

Exemption When does it apply?

Cabinet Cabinet or a committee of Cabinet has approved the sale of land without
a public process

Minister for Planning The Minister for Planning has approved the sale of land without a public
process

Land exchange approval The ERC or Assistant Treasurer has approved entering into a land
exchange arrangement

Legislation A legislative provision expressly permits an agency to sell land without

a public process

Recognition and Settlement A Recognition and Settlement Agreement under the Traditional Owner
Agreement Settlement Act 2010 provides for the transfer of Crown land to a
Traditional Owner group entity.

Rented residence An agency is selling a rented residence to a renter under a policy of the
agency

Surplus railway land An agency is selling surplus railway land to an existing lessee

Public universities The land transaction is being undertaken by a public university and it is
not one of the transaction types expressly excluded from the exemption
in Part 3 Section 3

49 Victorian Government Land Transactions Policy

 Land Transaction Requirements

8. Sale of land with a public land zone

This section explains how the public land zone requirement
in the policy operates

Requirement 10: Agencies must not offer land with A planning scheme may only include land in a public
a public land zone for sale, unless the land is being land zone if it is Crown land or land owned, vested in
sold to another agency that can own public zoned or controlled by a Minister, an agency that can own
land, a local council, or the Commonwealth. public land zone land, or a local council.

The requirement that agencies must not offer land

Background with a public land zone for sale ensures agencies do
Land zones guide the use and development of land not transfer public use zone land into private
in Victoria. A zone sets expectations about what ownership or an agency that is not entitled to own
land use and development activity is or may be public use zone land. The requirement does not
acceptable on a parcel of land. Each zone broadly apply if an agency is selling land to another agency
deals with a predominant land use theme, such or local council that can own public zone land or the
as residential, commercial, industrial or public Commonwealth.
land uses.
What is a public land zone?
A public land zone is any one of the public land
zones listed in the table below:

Table 23: List of public land zones

Public Land Zone Description

Public use zone Recognises the use of land for a public purpose and prescribes different
categories of public use. This is the main zone for public land used for
utility or community service provision.

Public park and recreation The main zone used for public open space and public recreation areas.
zone

Public conservation and The primary intention of this zone is to conserve and protect the natural
recreation zone environment or resources. It also allows associated educational activities
and resource-based uses.

Road zone Enables the designation of declared roads and other important roads or
proposed roads on the planning scheme map.

Victorian Government Land Transactions Policy 50

Sale of land with a public land zone

What is the process for changing Does the public land zone requirement
a public land zone to meet the apply to the sale of land to other
requirement? agencies, local councils and the
If an agency wants to sell land that has a public
Commonwealth?
land zone, it must put in place the most appropriate The public land zone requirement in the policy does
planning controls prior to offering it for sale. not apply to the sale of land to another agency that
can own public zoned land, a local council, or the
Agencies that require planning scheme changes
Commonwealth. This is because both agencies and
for their land need to apply for assistance through
local councils are generally permitted to own public
the Government Land Planning Service.
zone land, and land owned by the Commonwealth
does not fall within the Victorian planning scheme.

To ensure planning provisions relating to Victorian

government land remain up to date, if you are selling
Agency tip: public zone land to another agency or local council
for a different public use, it must be a condition of
sale that the purchaser commences arrangements
Agencies can find out more about the
for the planning scheme to be changed to reflect the
Government Land Planning Service at: new use within 12 months.
https://www.planning.vic.gov.au/policy-and-
Unless another exemption applies, the sale of public
strategy/government-land-planning-service
zoned land to another agency, local council or the
Commonwealth will be required to comply with all
the other requirements in the policy including that
Are there any circumstances when an
the land must be sold at a price not less than its
agency can offer land for sale with a current market valuation as determined by VGV,
public land zone? or if the transaction is between two GG sector
agencies, based on its book value.
In limited circumstances, the Minister for Planning,
Cabinet, or a committee of Cabinet may grant an
exemption from the public land zone requirement.
The exemption only allows land to be offered for sale
with a public land zone. Agencies will still need to Agency tip:
ensure that appropriate planning controls are in
place before settlement, and that the contract or
development agreement contains conditions that If you are selling land with a public land
establish the party responsible for rezoning the land. zone to another agency or local council for
An exemption will only be granted in limited
a different public use, remember to include
circumstances, for example where an agency needs
to expose land to the market to determine potential a clause in the contract or agreement that
development outcomes. deals with updating the planning scheme to
reflect the new public use.

Are there any exemptions from the

public land zone requirement in the
policy?
Cabinet, a committee of Cabinet and the Minister for
Planning can approve offering land with a public
land zone for sale in limited circumstances. You can
find more information on these exemptions in Part 3.

51 Victorian Government Land Transactions Policy

 Land Transaction Requirements

9. Lease with option to purchase

This section explains how the lease with option to purchase
requirement in the policy operates

Requirement 11: Agencies must not grant a lease of Are there any exemptions to the lease
land that contains an option to purchase unless it is
granting the option to another agency.
with option to purchase requirement?
A lease with an option to purchase may be exempt
Background if Cabinet, a committee of Cabinet or the Minister
for Planning has approved terms in a lease that
This requirement operates to prevent agencies from include an option to purchase, or if legislation
contravening the public sales process requirement expressly allows an agency to grant a lease with
by entering into a lease that creates a legal an option to purchase.
obligation to sell land directly to another person
through an option. You can find more information on exemptions in
Part 3.
What is a lease with an option to
purchase?
A lease with an option to purchase (sometimes called
a lease option) is a lease agreement that gives the
lessee the option to purchase the leased land, during
the lease or at the end of the lease. If a lessee
exercises the option to purchase the land, the lessor
must sell the land to the lessee.

Does this requirement apply where

the option is being granted to
another agency?
The requirement does not apply where the option is
being granted to another agency (that is a Victorian
government agency, not a local council or the
Commonwealth). However, the other requirements in
the policy continue to apply. This means that if the
option is exercised, the land must be sold at a price
that is no less than the current market value of the
land as determined by VGV, or the book value of the
land if the transaction is between GG sector
agencies.

Agencies also need to comply with other government

policies before entering into a lease that grants an
option to purchase to another agency, including the
FROR process in the landholding policy.

Victorian Government Land Transactions Policy 52

Part 3:
Exemptions

53 Victorian Government Land Transactions Policy

 Exemptions

1. Exemptions
This section sets out the exemptions to the land transaction
requirements in the policy

Background What are the exemptions to the

Agencies must comply with the requirements in
land transaction requirements?
the policy unless an exemption applies. The policy The 15 exemptions to the land transaction
establishes 15 exemptions that may exempt an requirements are listed in the table on the following
agency from complying with one or more of the page. Each exemption has different eligibility
land transaction requirements in the policy in conditions and applies to different land transaction
specific circumstances. requirements. There is a full explanation of each
exemption later in Part 3.
The exemptions are intended to ensure the land
transaction requirements are consistent with
relevant legislation and government policy and
only apply where there are strong grounds to
support a departure from the policy requirements.

How do the exemptions in the policy

operate?
Undertaking a land transaction that does not
comply with the policy requirements is only allowed
if an exemption applies. The exemptions in the policy
relate to specific land transaction requirements and
do not generally exempt an agency from complying
with the policy completely. ​

The exemptions in the policy fall into two categories;

exemptions that can be granted by a decision-
maker and exemptions that apply to certain types
of land transactions.

Victorian Government Land Transactions Policy 54

Exemptions

Table 24: List of exemptions to the land transaction requirements

Exemption Category Exemption

Decision-maker exemptions 1. Cabinet or committee of Cabinet approval

2. Minister for Planning approval

3. Assistant Treasurer approval

4. VGLM approval – Purchase in excess of VGV valuation

5. VGLM approval - Sale or lease after an unsuccessful public process

6. ERC or Assistant Treasurer approval - Land exchange

7. Responsible Minister approval - Lease terms

8. Responsible Minister or statutory officer approval - Lease for public

and community purposes

Transaction specific 9. Legislation

exemptions
10. Recognition and Settlement Agreement

11. Sale of residence to renter under a residential rental agreement

12. Surplus railway land

13. Public universities

14. Alternative valuation

15. Agency-specific leasing exemptions

VGLM approval requirement exemptions. When either of these exemptions apply

the agency is also exempt from the requirement for
Exemptions apply to individual requirements within VGLM approval.
the policy. They do not exempt an agency from
complying with the entire policy. Therefore, when an Record keeping
agency is relying on an exemption, it must still seek
VGLM approval if the transaction meets the VGLM An agency is required to maintain records of land
approval threshold. When an exemption is claimed transactions and must make these available to
VGLM’s role is to ensure the: VGLM for a compliance audit. This includes
• agency has met all the conditions of the maintaining records to show it has satisfied the
exemption. Here, VGLM merely reviews the requirements for any exemption relied on. The record
evidence provided by the agency to support the keeping obligation applies, regardless of whether the
exemption(s) and ensures the exemption land transaction requires VGLM approval.
conditions are satisfied. VGLM does not examine
the merits of any exemption, unless the exemption Where can I find out more about the
is being granted by VGLM, or the Minister of exemptions to the land transaction
Planning, on the advice of VGLM, and
requirements?
• remaining requirements in the policy to which an
exemption doesn’t apply, are met. The rest of Part 3 provides a detailed explanation of
each exemption. It deals first with exemptions that
The only exception is when an agency qualifies for can be granted by a decision-maker and then the
the public university or agency-specific leasing transaction specific exemptions.

55 Victorian Government Land Transactions Policy

 Exemptions

2. E
 xemptions granted
by a decision-maker
This section explains the exemptions in the policy that
can be granted by a decision-maker and how they operate

Background A decision supporting the Cabinet approval

exemption can be made by Cabinet or a committee
In some circumstances, Cabinet, a Minister, VGLM or of Cabinet. Under the policy, a committee of Cabinet
other decision-makers may grant an exemption from also includes the Land Utilisation Working Group
one or more of the land transaction requirements in (LUWG). The LUWG is a group of Ministers formed to
the policy. Each exemption is limited to specific land make decisions about the utilisation of government
transaction requirements, and some decision- land and reports to ERC.
makers can only grant an exemption if the land
transaction meets certain conditions. When does the Cabinet or committee of
Cabinet exemption apply?
A decision-maker cannot grant an exemption from
the accountability, transparency and legislation, due This exemption applies where Cabinet or a
diligence, VGV valuation or VGLM approval committee of Cabinet has specifically approved one
requirements. or more of the following:
• the sale of land without a public process,
The next section explains each of the exemptions
that can be granted by a decision-maker under the • terms of a transaction that do not comply with
policy, including: requirements of the policy, including any of the
following:
• when each exemption applies
– selling land (or an interest in land) or granting
• what requirements in the policy each exemption a lease at a price, which is less than the current
applies to, and market (or rental) value as determined by VGV
• what an agency needs to do to obtain the – purchasing land (or an interest in land) or
exemption. acquiring a lease at a price, that is more than
the current market (or rental) value as
Exemption 1: Cabinet or committee of determined by the VGV
Cabinet approval – permitting a land exchange
– permitting a lease with an option to purchase
Background
to a private party
Cabinet is the means through which the government • offering land for sale with a public land zone.
makes decisions on policy, the legislative program
and administrative issues. It consists of the Premier Which land transaction requirements are
and all the Ministers. subject to the exemption?

Cabinet has a committee structure, which allows for The exemption applies to the requirements related
more detailed consideration of areas such as directly to the matters that Cabinet or a committee
economic development, social development and the of Cabinet can approve under the exemption. The
environment by Cabinet committees. In some exemption does not apply more broadly to allow
circumstances, Cabinet will delegate certain Cabinet or a committee of Cabinet to exempt an
decision-making powers to its committees. agency from other requirements, including VGV
valuation and VGLM approval requirements.

Victorian Government Land Transactions Policy 56

Exemptions granted by a decision-maker

For quick reference, the policy requirements that How can an agency obtain a Cabinet
Cabinet or a committee of Cabinet can exempt an exemption?
agency from complying with are identified in the
table below. Cabinet exemptions are generally reserved for
matters of state significance. An agency should get
Table 25: Land transaction requirements advice from the Cabinet Services area in its agency
that may qualify for the Cabinet or or portfolio department if it wishes to apply for a
committee of Cabinet exemption Cabinet exemption.

If the transaction requires VGLM approval, VGLM

Accountability, transparency will check that the exemption applies to any part
and legislation of the transaction that does not comply with the
requirements in the policy. To demonstrate that
Due diligence an agency has a Cabinet exemption, it will need to
provide VGLM with an extract of the Cabinet
VGLM approval submission that recommends an exemption from
the land transaction requirement(s) under the
VGV valuation policy and minutes of the decision of Cabinet or
the committee of Cabinet.
Sale or lease price
It is not enough for Cabinet, or a committee of
Purchase or lease price Cabinet to approve the land transaction. To qualify
for the exemption, Cabinet or a committee of
Offer of compensation Cabinet, must expressly grant an exemption from the
policy requirement(s) and approve each part of the
Land exchange transaction that does not comply with the policy.

Sale by public process Exemption 2: Minister for Planning

approval
Public land zone
Background
Lease with option to purchase
The Minister for Planning is responsible for the policy
and can approve an exemption from the land
transaction requirements in limited circumstances
on the advice of VGLM.

When does the Minister for Planning approval

exemption apply?
This exemption applies when, on the advice of VGLM,
the Minister for Planning has approved one or more
of the following:
• the sale of land without a public process
• terms of a transaction that do not comply with
the requirements of the policy (excluding terms
allowing the sale of land at a price less than the
current market value of the land as determined
by VGV or a land exchange), and
• offering land for sale with a public land zone.

57 Victorian Government Land Transactions Policy

 Exemptions

Which land requirements are subject to the How can an agency obtain a Minister for
exemption? Planning exemption?
The exemption applies to the requirements related An agency will need to request an exemption using
directly to the matters that the Minister for Planning the Minister for Planning exemption form on VGLM
can approve under the exemption on the advice of Online. To apply for an exemption, agencies must
VGLM. The exemption does not apply more broadly address the grounds that the Minister for Planning
to allow the Minister for Planning to exempt an has regard to in approving an exemption. You can
agency from other requirements, including the VGV find more information on the grounds an agency
valuation and VGLM approval requirements. must address on the following page.

For quick reference, the policy requirements that the An agency seeking an exemption from the Minister
Minister for Planning can exempt an agency from for Planning will need to request one, regardless of
complying with are identified in the table below. the value of the land or transaction. If the
transaction also requires VGLM approval because it
Table 26: Land transaction requirements exceeds the VGLM approval threshold, there is no
that may qualify for the Minister need to lodge a separate approval request. The
for Planning exemption VGLM will treat the request for an exemption as a
request for approval and advise the agency of the
outcome of the approval and exemption request in
Accountability, transparency the same letter.
and legislation

Due diligence

VGLM approval
Agency tip:
VGV valuation
Agencies are responsible for establishing
Lease price
that there are grounds for an exemption.
Purchase or lease price Therefore, when requesting an exemption
you must describe the proposed transaction,
Offer of compensation address the grounds that the Minister for
Land exchange Planning has regard to in approving an
exemption and provide any other facts or
Sale by public process information that may support an exemption.
VGLM also recommends you request an
Public land zone
early engagement meeting with us to ensure
Lease with option to purchase you have all the necessary documents and
information before requesting a Minister for
Planning exemption.

Victorian Government Land Transactions Policy 58

Exemptions granted by a decision-maker

What factors will the Minister for Planning The Minister for Planning will consider a range of
consider when determining whether to approve factors when deciding whether to approve an
an exemption? exemption on the advice of VGLM. The factors
considered will depend on the relevant facts and
circumstances of the land transaction and the
exemption requested. Some of the key factors the
Minister for Planning may have regard to are set out
in the table below.

Table 27: Minister for Planning exemption considerations

Consideration The Minister for Planning will consider whether an exemption:

Logical Will help the government achieve a logical and practical outcome.

Examples may include:

• where the sale of the land to an adjoining owner without a public
process is the only practical outcome because the land is landlocked
and/or undevelopable as a single parcel.
• offering land with a public land zone for sale to expose land to the
market to determine potential development outcomes.

No advantage Does not generate a financial advantage or another benefit that may
be unfair.

Equitable Will produce an outcome that is fair and impartial.

Agencies must demonstrate decisions have been made based on

objective criteria, free from any conflict of interest or bias.

In cases where the exemption relates to the sale of land and there is
more than one potential purchaser, an agency must demonstrate that
all purchasers were provided an equal opportunity to purchase the land
on the same terms.

Transparent Is supported by a transparent process.

Agencies must demonstrate an open decision-making process

supported by records about the issues considered in applying for the
exemption, the weight given to the evidence and the reasons for making
the decision.

Accountability Is supported by:

• a decision-maker in the agency who has been provided with the
information required to make a well-informed decision based on
available facts, and supporting information, and
• expert advice that may include legal, planning or surveying advice. If
an agency is seeking approval to offer land with a public land zone for
sale it must show it has consulted with the Government Land Planning
Service, and provide information about the rezoning process, including
planning proposals and timeframes.

Declared policy Supports a publicly-stated government initiative, strategy, policy or

development outcome and will result in material financial, economic,
social or other community benefits.

59 Victorian Government Land Transactions Policy

 Exemptions

Can the Minister for Planning approve the sale Exemption 3: Assistant Treasurer
of land at a price that is less than the current approval
market value of the land as determined by VGV,
or a land exchange arrangement? Background
No, different exemptions apply in these The Assistant Treasurer is responsible for financial
circumstances. You can find out more about the reporting and accountability and can approve
other exemptions that may be available later in Part selling land, or an interest in land, at a price which
3. is less than the current market value of the land as
determined by VGV in exceptional circumstances.
Delegation of decision-making powers
When does the Assistant Treasurer exemption
Under the policy, the Minister for Planning may apply?
grant an agency an exemption from complying
with specific requirements in the policy acting on The exemption applies, when, on the advice of DTF,
the advice of VGLM. the Assistant Treasurer approves the sale of land, or
an interest in land, at a price which is less than the
The Minister for Planning may delegate the power current market value of the land as determined
to approve an exemption in the following by VGV.
circumstances:
• to the Minister for Energy, Environment and The Assistant Treasurer may approve the sale of
Climate Change, where there may be a potential land to another agency, local council, or the
conflict of interest (real or perceived). This may Commonwealth where they intend to use the land
include circumstances where the Minister for for a public or community purpose that outweighs
Planning is a party to the land transaction or holds the loss to the revenue, and the sale is:
another portfolio related to the transaction. • at a price that is no less than the restricted use
• To VGLM, in relation to the sale of low-value land value of the land as determined by VGV, and
without a public process to an adjoining owner • on the condition that a restriction is imposed on
where selling the land to the adjoining owner is title that limits the land use to public and
the only practical outcome. This may include community purposes.
circumstances where the land is landlocked or
the only way to use and/or develop the land is The restriction on title ensures that any future
to consolidate it with an adjoining land parcel. change in the use of the land requires the Assistant
Treasurer’s consent. This provides an opportunity for
Delegation to VGLM the government to recover the difference between
the restricted use value of the land and its market
The delegation will have a value limit, and may value as a condition of removing the restriction.
be granted, varied or revoked by the Minister for
Planning at any time. DTF will advise agencies on how the restriction(s) will
be placed on title. However, for freehold land, it may
When a delegation is issued, it does not affect the require the surrender of the land to the Crown, so the
decision-making power of the Minister for Planning. freehold title for the land can be regranted with a
Therefore, VGLM may still refer unique or complex restriction limiting the use of the land for public and
exemption requests to the Minister for Planning for community purposes.
decision, even if they fall within the scope of VGLM’s
delegation. The Assistant Treasurer may also consider
approving an exemption in other exceptional
circumstances. If an agency thinks it has reasonable
grounds to support an exemption, it should contact
DTF for further advice.

Victorian Government Land Transactions Policy 60

Victorian Government Land Transactions Policy

Which land transaction requirements are Exemption 4: VGLM approval –

subject to the exemption? Purchase in excess of VGV valuation
The exemption is limited to the requirement that VGLM administers the policy and, in limited
agencies must not sell land, or an interest in land, circumstances, can approve the purchase of land
at a price that is less than the current market value for an amount above VGV’s valuation.
of the land as determined by VGV.
When does the VGLM exemption apply?
If an exemption is approved, the transaction must
comply with the other requirements in the policy The exemption will apply when VGLM approves
unless another exemption applies. the purchase of land for an amount above VGV’s
valuation in special circumstances where the
How does an agency request approval of an compulsory acquisition process can’t be used
exemption from the Assistant Treasurer? or is not available, and:
The Assistant Treasurer can only approve an • after obtaining VGLM approval (if required), an
exemption on the advice of DTF. Therefore, agencies agency has been unable to negotiate the purchase
will need to contact DTF to discuss the process for of a strategically important parcel of land at the
applying for this exemption. current market value of the land as determined by
VGV, or
DTF will only consider an exemption request, if an • an agency has invited VGLM and VGV to attend an
agency can show that the responsible Minister or auction where it intends to purchase a strategically
statutory officer that owns the land, has approved important parcel of land and during the auction
seeking an exemption. The agency must show the VGLM approves the purchase of the land for an
decision-maker has taken into account all relevant amount that is above the current market value as
considerations, including the risks and benefits of determined by VGV.
the transaction, and any estimated loss of revenue
based on a VGV valuation. The exemption only applies in special circumstances.
Agencies are responsible for demonstrating to VGLM
that special circumstances exist based on the
relevant facts and circumstances supported by clear
evidence.

61 Victorian Government Land Transactions Policy

 Exemptions

Negotiated purchase
Agency tip: If an agency is seeking VGLM approval to
purchase the land at a price which exceeds the
VGV valuation, it will need to request an exemption
You can find out more about the evidence
using the Exemption Land Requirements exemption
required to support a VGLM exemption in the form on VGLM Online. The exemption request must
Resources section on VGLM Online. include information and documents to demonstrate
that special circumstances exist. An agency must
not make an offer (formal or informal) to purchase
Which land transaction requirements are
land at above VGV’s valuation before obtaining
subject to the VGLM exemption? VGLM approval.
The exemption is limited to the requirement that
Auction
agencies must not purchase land or an interest in
land for an amount that is more than the current When an agency is purchasing land at auction, it
market value of the land as determined by VGV. must request approval for the purchase using the
Purchase form on VGLM Online. If an agency also
If an exemption is approved, the transaction must
wants VGLM to attend the auction, it should advise
comply with the other requirements in the policy
VGLM in the form and set out the special
unless another exemption applies.
circumstances that may support VGLM approving
How can an agency obtain a VGLM exemption? the purchase of land at above VGV’s current market
value at auction and also invite VGV to attend. If
The process for applying for an exemption will be VGLM approves the purchase of the land for a price
different depending on whether an agency is seeking above VGV’s valuation at auction, an agency will
approval to purchase land for an amount above need to lodge another submission with VGLM using
VGV’s valuation through a negotiated purchase or the Exemption Land Requirements form. This allows
at auction. There is more information on the VGLM to provide an agency with formal advice it
application process for each method of purchase in has approved the transaction and an exemption,
the following sections. for its records.

Agencies are required to comply with the In circumstances where an agency seeks VGLM
requirements in the policy unless an exemption attendance at an auction and the transaction does
applies. Therefore, if an agency wants to rely on the not require VGLM approval because it is below the
VGLM exemption to purchase land at a price above approval threshold, the agency should request an
VGV’s current market valuation, it must obtain VGLM early engagement meeting with VGLM to discuss the
approval for the exemption even if the transaction is special circumstances supporting VGLM attendance
below the VGLM approval threshold. at the auction.

Victorian Government Land Transactions Policy 62

Victorian Government Land Transactions Policy

Exemption 5: VGLM approval – Sale or • the agency has received an offer to purchase or
acquire a lease in the land, for less than the current
lease after unsuccessful public process market (or rental) value of the land as determined
In limited circumstances, VGLM may approve selling by VGV, and
or granting a lease in land at a price that is less than • VGV has provided the agency with written advice
the current market (or rental) value of land as confirming that it would be reasonable to accept
determined by VGV where an attempt to sell or lease the amount offered, or another amount, to sell or
the land using a public process has been grant a lease in the land.
unsuccessful.
Which land transaction requirements are
When does the unsuccessful public process subject to the exemption?
exemption apply?
The exemption is limited to the requirement that
This exemption applies when VGLM approves selling agencies must not sell land (grant a lease or an
or granting a lease over land at a price, which is less interest in land) at a price that is less than the
than the current market (or rental) value of the land current market value as determined by VGV.
as determined by VGV if an agency undertakes a
public process that does not result in the land being How can an agency obtain a VGLM exemption?
sold or leased.
An agency will need to request an exemption using
The VGLM can only grant an exemption if an agency the Exemption Land Requirements form, or Leasing
can demonstrate: form in the case of a lease, on VGLM Online. In the
form, agencies should provide evidence of an
• the agency conducted a public process to sell or
unsuccessful public process and attach the advice
grant a lease in land
from VGV.
• that the public process did not result in the land
being sold or leased at a price that is not less than An agency seeking an exemption based on an
the current market (or rental) value of the land as unsuccessful public process will need to request one,
determined by VGV. For example, this may include regardless of the value of the land or transaction.
circumstances where land failed to meet its
reserve price after an auction, tender or EOI, or
land is not sold or leased, after a reasonable
period on the market

63 Victorian Government Land Transactions Policy

 Exemptions

Exemption 6: ERC or Assistant Which land transaction requirements are

Treasurer approval - Land exchange subject to the exemption?
The exemption is limited to the requirement that
Background
agencies must not undertake a land transaction
Under the policy, an agency must not undertake a that involves the exchange of land.
land transaction that involves the exchange of land.
If a land exchange is approved, the arrangement
This ensures that when an agency divests land, it
must comply with the other requirements in the
receives a payment that is remitted to the
policy unless another exemption applies.
Consolidated Fund and reinvested by the
government to deliver infrastructure, support and
How can an agency obtain a land exchange
services to the Victorian community.
exemption?
However, there may be circumstances where the
The process for applying for an exemption will be
benefits of a land exchange outweigh its impact on
different depending on the value of the land. If ERC
the revenue. Therefore, the land exchange
approval is required, an agency should seek advice
exemption provides a process for agencies to seek
from the Cabinet Services area in their agency or
approval to undertake a land exchange transaction
portfolio department on the process for obtaining
in limited circumstances.
an exemption. If Assistant Treasurer approval is
When does the land exchange exemption required, the agency’s responsible Minister will need
to write to the Assistant Treasurer requesting an
apply?
exemption.
This exemption applies when an agency obtains
The VGLM will still need to approve any land
approval from ERC or the Assistant Treasurer,
transaction involving an approved land exchange
confirming that it can undertake a transaction that
arrangement where the value of the land or
involves the exchange of land.
transaction exceeds the VGLM approval threshold.
The type of approval required depends on the value
of the land in the exchange, as follows:
• If VGV’s market value of the land (or the book
value, if the land exchange is between GG sector
agencies) is $5 million or more, the land exchange
must be approved by ERC
• if VGV’s market value of the land (or the book
value, if the land exchange is between GG sector
agencies) is less than $5 million, the transaction
must be approved by the Assistant Treasurer, or
• If the land exchange was agreed before 1 July 2018
the Assistant Treasurer may approve the exchange
if it is not practicable to terminate the
arrangement, regardless of the value of the land.

To obtain approval an agency must demonstrate to

the Assistant Treasurer or ERC (as required) that the
benefits of the land exchange to the State, outweigh
any loss, including the loss of sales revenue that
would otherwise be returned to the Consolidated
Fund.

Victorian Government Land Transactions Policy 64

Victorian Government Land Transactions Policy

Exemption 7: Responsible Minister or • agencies must not acquire a lease in land for an
amount that is more than the current rental value
statutory officer approval - Lease of the land as determined by VGV.
terms
The exemption does not apply to any of the other
The responsible Minister or statutory officer that land transaction requirements. This includes the
owns the land, can approve lease terms that do not requirement that agencies must not enter a lease
comply with the requirements in the policy. giving an option to purchase to any party that is not
another agency, as well as the VGV valuation and
When does the responsible Minister exemption VGLM approval requirements.
apply?
How can an agency obtain a responsible
The exemption applies when the responsible Minister Minister exemption?
or statutory officer that owns the land, approves
lease terms that result in an agency: An agency will need to seek advice from Ministerial
• granting a lease at a price that is less than the Services, or the office of the relevant statutory
current market rental valuation as determined officer, in their agency or portfolio department, on
by VGV, or how to brief the Minister or statutory officer seeking
• acquiring a lease at a price that is more than the approval to lease land based on terms that do not
current market rental valuation as determined comply with the requirements in the policy.
by VGV.
The VGLM will still need to approve any lease
To qualify for the exemption, an agency must transaction that meets the requirements for VGLM
demonstrate that the responsible Minister or approval. You can find out more about the
statutory officer has approved an exemption, based circumstances where an agency requires approval
on all relevant considerations, including the risks and before granting a lease in Part 2 Section 4.
benefits of the transaction and any estimated loss of
An agency can request approval to undertake the
revenue based on a VGV valuation.
transaction using the Leasing form on VGLM Online.
In the form, agencies must attach a copy of the
Which land transaction requirements are
responsible Minister or statutory officer’s approval.
subject to the exemption?
As part of VGLM’s review process, it will verify
The exemption is limited to the following policy whether the exemption applies to the parts of the
requirements: transaction that do not comply with the policy.
• agencies must not grant a lease in land for an
amount that is less than the current rental value
of the land as determined by VGV, and

65 Victorian Government Land Transactions Policy

 Exemptions

Exemption 8: Responsible Minister or Which land transaction requirements are

statutory officer - Lease for public and subject to the exemption?
community purposes The public and community purposes exemption is
limited to the requirement that agencies must not
In certain circumstances, the responsible Minister or grant a lease in land at a price less than the current
statutory officer can grant an exemption from the rental value of the land as determined by VGV.
requirement not to lease land at a price that is less
than the current rental value of the land, where the An agency must still obtain a VGV valuation so that
land is being leased for a public or community it can brief the decision-maker about the revenue
purpose. loss to the state as a result of granting a lease at a
price which is less than the VGV current rental value
When does the public and community purposes of the land.
exemption apply?
How can an agency obtain the lease for public
This exemption applies if the following conditions and community purposes exemption?
are met:
• The lease is to a local council, not for profit, The public and community purposes exemption
community organisation, or a service delivery body will apply provided the lease meets the requirements
that delivers government policy priorities at less of the exemption and the responsible Minister or
than commercial terms, and statutory officer has approved the exemption.
• The lessee will wholly or predominately use the The VGLM will still need to approve any lease
land for public and community purposes. transaction that meets the requirements for
This includes any one or more of the following: VGLM approval. An agency can request approval
– community services to undertake the transaction using the Leasing form
– cultural services on VGLM Online. In the form, agencies must attach
– recreational services supporting documents showing it is granting a lease
to an eligible party for an eligible purpose, a copy
– social engagement of the approval granted by the responsible Minister
– public health and wellbeing services or statutory officer, and a copy of the delegation
– protection of public land values, or of authority (if relevant). As part of VGLM’s review
process, it will confirm whether the exemption
– similar facilities, activities or services.
applies to the parts of the transaction that do
• The lease has an annual rent of $10,000 (GST not comply with the policy.
exclusive) or less, and
• The responsible Minister or statutory officer has
approved granting the lease at a price, which
is less than the VGV valuation on the basis that
it represents best value for the community after
weighing the potential revenue loss against the
public and community benefits provided by
the lessee.

The responsible Minister may delegate the

responsibility for approving the exemption
under the policy, to a department Secretary,
administrative office head, governing board
or individual appointment governing a public
entity. Where a delegation is in place this should
be documented in writing and available for
VGLM review.

Victorian Government Land Transactions Policy 66

Transaction specific exemptions

3. Transaction specific exemptions

This section explains how the transaction specific exemptions
in the policy operate

Background When does the legislation exemption apply?

In some circumstances specific kinds of transactions The exemption applies when a legislative provision
may be exempt from one or more of the land confers powers and functions on a decision-maker
transaction requirements in the policy. Like the that expressly allow one or more of the following:
exemptions that can be granted by decision-makers, • the sale of land without a public process
each exemption is generally limited to specific land • terms of a transaction that do not comply with
transaction requirements. In addition, the land the requirements of the policy.
transaction may need to meet certain conditions
to qualify for the exemption. A legislative provision that simply authorises a
decision-maker to sell, purchase or lease land does
The next section explains each of the transaction not satisfy the requirements of the exemption.
specific exemptions under the policy, including:
• when each exemption applies To qualify for the exemption, an agency must be able
• what requirements in the policy each exemption to demonstrate:
applies to, and • there is a legislative provision that expressly
• what an agency needs to do to obtain the provides the decision-maker with authority to
exemption. decide to undertake a land transaction that does
not comply with the requirements in the policy.
• the decision-maker has approved the sales
Exemption 9: Legislation process/and or terms of the transaction under the
Agencies are required to undertake land relevant legislative provision based on all relevant
transactions following the land transaction considerations, including the risks and benefits of
requirements in the policy. However, the the transaction, the VGV valuation and any
requirements in the policy do not replace any estimated loss of revenue.
powers, functions or responsibilities an agency
may have under legislation. Therefore, where a Which land transaction requirements are
legislative provision expressly allows an agency subject to the exemption?
to undertake a land transaction based on terms
The exemption applies where a legislative provision
or at a price determined by the decision-maker,
allows an agency to undertake a transaction that
the transaction may be exempt from one or
involves a sales process or is based on terms that
more policy requirements.
do not comply with the requirements in the policy.
The exemption does not apply more broadly to
exempt an agency from other requirements,
including the VGV valuation and VGLM approval
requirements.

For quick reference, the table on the following page

identifies the policy requirements that may be
eligible for the legislation exemption.

67 Victorian Government Land Transactions Policy

 Exemptions

Table 28: Land transaction requirements that How can an agency obtain a legislation
may qualify for the legislation exemption?
exemption
The legislation exemption will apply provided
an agency meets all the requirements for the
Accountability, transparency
exemption.
and legislation
However, the VGLM still needs to approve the
Due diligence
transaction if the value of the land or transaction
VGLM approval exceeds the VGLM approval threshold. An agency
can request approval to undertake the transaction
VGV valuation using the Exemption Land Requirements form on
VGLM Online. In the form, agencies should reference
Sale or lease price the relevant legislation, explain how the legislation
applies to the transaction and attach a copy of the
Purchase or lease price authorised decision-maker’s approval under the
relevant legislative provision. As part of VGLM’s
Offer of compensation review process, it will confirm whether the exemption
applies to the parts of the transaction that do not
Land exchange comply with the policy.

Sale by public process Exemption 10: Recognition and

Settlement Agreement
Public land zone
Background
Lease with option to purchase
Under the Traditional Owner Settlement Act 2010
(TOS Act), the government may enter into a
Recognition and Settlement Agreement to recognise
a Traditional Owner group and certain Traditional
Owner rights over Crown land. A Recognition and
Settlement Agreement may include a land
agreement, which provides for grants of Crown land
in freehold title for cultural or economic purposes, or
as Aboriginal title to be jointly managed in
partnership with the state.

This exemption ensures that agencies can transfer

land under the terms of a Recognition and
Settlement Agreement without breaching the
policy’s requirements.

When does the Recognition and Settlement

Agreement exemption apply?
This exemption applies when the Victorian
government enters into a Recognition and
Settlement Agreement under the TOS Act that
includes a land agreement providing for the grant of
Crown land in freehold title for cultural or economic
purposes, or as Aboriginal title to be jointly managed
in partnership with the state.

Victorian Government Land Transactions Policy 68

Transaction specific exemptions

Which land transaction requirements are Exemption 11: Sale of residence to

subject to the exemption? renter under a residential rental
The exemption applies to the policy requirements agreement
that apply when land is transferred under a
Recognition and Settlement Agreement, as follows: Background
• agencies must not sell (grant a lease or an interest Some agencies rent residences and have policies
in) any land at a price that is less than the current that provide an opportunity for renters to purchase
market (or rental) value as determined by VGV, and the home they have been renting. This exemption
• agencies must sell land using a public process. ensures that agencies with these policies can sell
residences to renters without breaching the public
This exemption permits land transfers under a sales process requirement in the policy, provided the
Recognition and Settlement Agreement to be at any land is being sold at a price no less than the current
price including nominal consideration, with no need market value of the land as determined by VGV.
for a public sales process. In all cases a VGV
valuation is still required. When does the exemption apply?
How can an agency obtain a Recognition and To qualify for the exemption, an agency must
Settlement Agreement exemption? demonstrate that:
• the land is owned by the agency and contains a
The Recognition and Settlement Agreement residence
exemption will apply to any land transfer under a
Recognition and Settlement Agreement. • the agency is proposing to sell the land to the
renter named in a current residential rental
However, the VGLM still needs to approve the agreement, and
transaction and confirm the exemption if the value • the agency has a policy in place that permits the
of the land or transaction exceeds the VGLM sale of residences to renters, and the land is being
approval threshold. An agency can request approval sold to the renter in accordance with the policy.
to undertake the transaction using the Exemption
Land Requirements form on VGLM Online. In the Which land transaction requirements are
form, agencies must provide a copy of the subject to the exemption?
Recognition and Settlement Agreement, and any
Minister or Governor in Council consent and/or The exemption is limited to exempting agencies from
approvals required to grant an estate in fee simple or the requirement that they must sell land using a
Aboriginal title in public land under the TOS Act. As public process.
part of VGLM’s review process, it will confirm whether
the exemption applies to the parts of the transaction How can an agency obtain the exemption?
that do not comply with the policy.
The exemption will apply provided an agency meets
all the requirements for the exemption.

However, VGLM still needs to approve the transaction

if the value of the land or transaction exceeds the
VGLM approval threshold. An agency can request
approval to undertake the transaction using the
Exemption Land Requirements form on VGLM Online.
In the form, agencies must provide a copy of the
agency policy and a copy of the current residential
rental agreement showing the purchaser is the
current renter. As part of VGLM’s review process, it
will confirm whether the exemption applies to allow
the land to be sold without a public process.

69 Victorian Government Land Transactions Policy

 Exemptions

Exemption 12: Surplus railway land Which land transaction requirements are
subject to the exemption?
Background
The surplus railway land exemption is limited to the
When land purchased for rail transport is no longer requirement that agencies must sell land using a
required for the delivery of transport infrastructure, public process.
it may be declared surplus and sold. This exemption
allows land to be sold to an existing lessee without a How can an agency obtain a surplus railway
public sales process, provided the land is being sold land exemption?
at a price no less than the current market value of
the land as determined by VGV. The surplus railway land exemption will apply
provided an agency meets all the requirements for
When does the surplus railway land exemption the exemption.
apply?
However, the VGLM still needs to approve the
To qualify for the exemption, an agency must be able transaction if the value of the land or transaction
to demonstrate that: exceeds the VGLM approval threshold. An agency
can request approval to undertake the transaction
• the land was held for rail transport and is now
using the Exemption Land Requirements form on
surplus
VGLM Online. In the form, agencies must provide a
• the agency is proposing to sell the land to the copy of the clearance certificate confirming the land
current lessee, and is surplus and the lease agreement showing the
• the agency is proposing to sell the land at a price, purchaser is the current lessee. As part of VGLM’s
which is no less than the current market value of review process, it will verify whether the exemption
the land as determined by VGV. applies to the parts of the transaction that do not
comply with the policy.

Victorian Government Land Transactions Policy 70

Transaction specific exemptions

Exemption 13: Public university Which land transaction requirements

exemption are subject to the exemption?
The exemption applies to all the land transaction
Background
requirements in the policy. Therefore, unless a
Public universities fall within the definition of a university is undertaking a listed transaction, they
Victorian government agency under the policy are not required to comply with the requirements
because they are legal entities established under in the policy when undertaking a land transaction.
state legislation. However, the financial
If a public university undertakes a listed land
arrangements for universities require them to
transaction, it is not exempt and must comply with
operate independently. This means public
all the requirements in the policy unless another
universities undertake a range of land transactions
exemption applies.
that do not involve direct or indirect Victorian
government funding.
What is a public university?
How does the public university exemption Victoria has eight public universities, which meet
operate? the definition of a public university under the policy:
Public universities are exempt from the requirements • Deakin University
in the policy, except when undertaking any of the • Federation University Australia
following land transactions: • La Trobe University
• the purchase of land or entering into a lease with • Monash University
any money provided by the Victorian government
• RMIT University
• the sale of any land, that was granted, transferred
• Swinburne University of Technology,
or sold at nominal or less than its market value to a
public university by the Crown in right of the state • The University of Melbourne, and
of Victoria, Minister of the State or Victorian • Victoria University.
government agency
You can find a more detailed definition of public
• offering land with a public land zone for sale
university in the glossary in Part 5.
• an offer of compensation under the LAC Act or
Part 5 of the PE Act.

For the purposes of the policy these are known as

listed transactions.

71 Victorian Government Land Transactions Policy

 Exemptions

How does the exemption work with other Exemption 14: Alternative valuation
Victorian government land management
policies and legislation? Background

The exemption does not affect any of the The alternative valuation exemption allows
requirements or obligations imposed on public agencies to grant a lease to a private party at
universities under legislation or other government a price not less than the current rental value of
land management policies. the land determined by a licensed real estate
agent in two limited circumstances.
This includes the legislative requirement to seek
approval from the Minister for Higher Education When does the alternative valuation exemption
before undertaking certain types of land apply?
transactions and complying with the FROR process
under the landholding policy before selling any land. This exemption may apply in either of the following
circumstances:
How does a public university obtain an • when the cost of obtaining a current market rental
exemption? valuation from VGV exceeds the annual market
rental value of the land, as determined by a
The public university exemption applies licensed real estate agent, or
automatically to any transaction undertaken by a
public university that is not a listed transaction. • where land that is purchased or compulsorily
There is no requirement to obtain a VGV valuation or acquired to achieve an impending infrastructure
VGLM approval before undertaking an exempt or service delivery outcome is leased to a private
transaction because the exemption applies across party under a lease that can be terminated at any
all the requirements in the policy. time with not more than 6 months-notice.

To qualify for the exemption, agencies must grant

the lease at a price no less than the current rental
value of the land as determined by a licenced real
estate agent and retain supporting documents and
evidence to show they satisfied the requirements of
the exemption.

Which land transaction requirements are

subject to the exemption?
The alternative valuation exemption is limited to the
requirement that agencies must obtain a VGV
valuation before leasing land and not grant a lease
over land at a price less than the current rental value
of the land as determined by VGV.

How can an agency obtain the alternative

valuation exemption?
The alternative valuation exemption will apply
provided an agency meets all the requirements
for the exemption.

The VGLM will still need to approve any lease

transaction that meets the requirements for
VGLM approval. An agency can request approval
to undertake the transaction using the Leasing form
on VGLM Online. In the form, agencies must attach
supporting documents to show they meet the
requirements of the exemption. As part of VGLM’s
review process, it will confirm whether the exemption
applies based on the evidence provided.

Victorian Government Land Transactions Policy 72

Transaction specific exemptions

Exemption 15: Agency-specific leasing When do the agency-specific exemptions

exemptions apply?
The table below sets out the agency-specific
Background
exemptions and when they apply.
Specific agencies are excluded from certain
requirements of the policy when they grant certain
types of leases.

Table 29: Agency-specific leasing exemptions

Agency Leasing transaction

Department of Education The lease is granted over land that forms part of the teacher housing
and Training (DET) portfolio, and it is leased to a teacher employed by DET.

Department of Health The lease is granted:

• to a service provider that provides services related to the core
Department of Health
functions of an agency; or
services listed in Schedules
1 to 6 in the Health Services • as part of a public private partnership project.
Act 1988

Department of Families,
Fairness and Housing

Department of Transport

Department of Families, The lease is granted over land which contains a residential property and
Fairness and Housing the lessee:
• meets the eligibility requirements for a tenancy in social housing as
determined under the Housing Act 1983, or
• is a registered housing agency or community service organisation for
the purpose of providing accommodation to persons that meet the
eligibility requirements for a tenancy in social housing as determined
under the Housing Act 1983.

Department of Justice and The lease is granted over land that is used by the DoJCS for police
Community Safety (DoJCS) housing, and it is leased to an employee for police purposes.

Department of Transport The lease is granted to another entity created under the Transport
Integration Act 2010.

Department of The lease is granted over Crown land temporarily, permanently or

Environment, Land, Water deemed to be permanently reserved, that is the responsibility of DELWP,
and Planning (DELWP) its committees of management and Parks Victoria under legislation
including, Crown Land (Reserves) Act 1978, Forests Act 1958, National
Parks Act 1975, and Wildlife Act 1975.

73 Victorian Government Land Transactions Policy

 Exemptions

Which land transaction requirements are exemption, the exemption will apply
subject to the exemption? automatically. There is no requirement to obtain
a VGV valuation or VGLM approval because the
If an agency-specific leasing exemption applies, the exemption applies across all the requirements in
agency is only required to comply with the following the policy, except for the accountability,
requirements in the policy when granting the lease: transparency and legislation, due diligence, and
• Requirement 1 - Accountability, transparency and lease with option to purchase requirements.
legislation
However, even if an agency qualifies for an agency-
• Requirement 2 - Due diligence, and specific exemption, it still has the option of granting
• Requirement 11 - Lease with option to purchase. the lease following the policy requirements. Agencies
must also comply with any other government policy
How does an agency obtain an agency-specific that applies to leasing government land, including
exemption? the Leasing Policy for Victorian Crown Land and
Victorian Office Accommodation Guidelines and
If an agency grants a lease that meets the Building Standards.
requirements for an agency-specific leasing

Victorian Government Land Transactions Policy 74

Part 4:
Transactions

75 Victorian Government Land Transactions Policy

 Sale

1. Sale
This section explains how the land transaction policy
requirements apply to the sale of land

Background The table on the following page sets out some of

those transactions. Not every type of transaction
The policy includes several specific requirements listed complies with the requirements in the policy.
that apply when agencies are selling land. Therefore, these type of sale transactions are only
permitted in accordance with the policy if an
This section will explain: exemption applies.
• the types of transactions that fall within the
meaning of sale under the policy Agencies should keep in mind that the definition of
land under the policy is also broad. Therefore, the
• the types of land that an agency can sell
sale may relate to any part of the land, including the
• the land transaction requirements and how these land’s surface, land below the surface and the air
apply when an agency sells land, and above the surface. Selling an interest in the air above
• exemptions to the policy requirements that may the land’s surface is often referred to as selling the
apply when an agency sells land. air rights.

What is the sale of land?

Under the policy, a sale includes any arrangement
under which an agency agrees to transfer land to
another party or to create an interest in land that it
owns that will benefit another party.

The broad meaning of sale for the purposes the

policy means that a range of different land
transactions must comply with the requirements
that apply to the sale of land.

Victorian Government Land Transactions Policy 76

Sale

Table 30: List of sales transactions

Exemption
Sale transaction What it involves
required

Sale by public process Selling land using a public process, including

auction, EOI, multi-stage EOI or tender, or publicly
listing land for sale.

Sale by direct negotiation Directly negotiating with another party to sell

land, including an adjoining owner or another
person who has expressed interest in purchasing
the land.

Land exchange The exchange of land between parties.

Gift Giving land as a gift.

Option to sell land Agreeing to sell land at some time in the future.
The option may form part of an option deed,
contract or lease.

Granting an easement Giving another person the right to use the

agency’s land for a specified reason. Easements
are recorded on title and effect a defined area of
the land.

What types of land can be sold by agencies? authorised delegate, and they decide the Crown
land can be sold and either dispose of the land or
There are two types of government land, Crown land refer the land to the Assistant Treasurer for
and freehold land. The process for selling each kind disposal based on the monetary threshold set out
of government land is explained below. below, and

Crown land • if native title rights and interests exist and there is
a Traditional Owner group, an agreement with the
Crown land is owned by the Crown in right of the Traditional Owner group will be required in order to
State of Victoria and can be reserved for a particular sell the land. The Land Justice Unit in the DoJCS
public use, or unreserved. manages agreement-making in collaboration with
DELWP, Department of Premier and Cabinet, DTF
Reserved Crown land is managed by agencies, local and the Department Economic Development, Jobs,
councils or committees of management and cannot Precincts and Regions. If no Traditional Owner
be sold. However, unreserved Crown land that has group exists, the agency should ask the Land
not been set aside for a particular public use may be Justice Unit in DoJCS and the Victorian
alienated from the Crown estate and sold, provided Government Solicitor for advice on how to proceed.
this process complies with the SCLA policy and
requirements in the Land Act 1958. These The Land Act 1958 governs the process for selling
requirements include: unreserved Crown land. It involves the Crown
granting the land to the purchaser through a Crown
• The land has been declared surplus by the agency
grant, after which the land becomes freehold land.
managing the land,
Since agencies do not own Crown land (it is held by
• DELWP has conducted a strategic Crown land the Crown), DTF typically conducts all Crown land
assessment and determined the land should no sales, except for Crown land with a value of less than
longer be Crown land, $250,000, which can be sold by DELWP. In some
• the strategic Crown land assessment is submitted circumstances, legislation may also permit an
to the responsible Minister and the Minister for agency to sell Crown land.
Energy, Environment and Climate Change, or an

77 Victorian Government Land Transactions Policy

 Transactions

Unless an exemption applies, the sale of Crown land Are agencies required to sell land based on
must comply with the requirements in the policy. A certain terms and conditions?
sale does not include the surrender of land to the
Crown, the appointment of a Crown land When an agency sells land, the contract of sale
administrator or any change to the Crown land must outline the terms and conditions of the
administrator. transaction, including the purchase price, deposit
amount and date of settlement. The policy does not
Freehold land prescribe specific terms or conditions for inclusion in
the sale of land contract, because different terms
Freehold land is owned by an entity within the may be required depending on market conditions or
Victorian government (rather than the Crown), such the type of transaction.
as a Minister, department Secretary, statutory officer
or public entity. Freehold land can be sold provided However, unless an exemption applies, an agency is
that the agency has the legislative authority to sell required to sell land at a price that is no less than its
land and the sale complies with government policy, current market value as determined by VGV. As
including the: explained in Part 2 Section 5, the terms and
• landholding policy that requires agencies to offer conditions of a land transaction can impact on the
land to all other agencies, as well as local value of land. Therefore, when an agency requests a
government and the Commonwealth government valuation it must advise VGV of the terms and
through the FROR process before selling it conditions of the sale.
• land use policy that requires a whole-of-
government approach to government land use Land transaction requirements
decision-making to maximise public value for
Victorian communities, and Part 2 of the policy provided information on each of
the land transaction requirements. This section gives
• land transaction requirements in the policy.
more guidance on how the land transaction
An agency can sell an entire parcel of land or use a requirements apply when agencies sell land.
plan of subdivision to divide the land into two or
Requirement 1: Accountability, transparency and
more parcels of land and sell them separately.
legislation
Nothing in this policy prevents an agency from
subdividing and selling land, or entering into a An agency must ensure land sales are conducted to
contract for the sale of land before the subdivision is achieve accountability and transparency and are
registered, provided it has determined the areas and undertaken in accordance with relevant legislation.
dimensions of the land, VGV has provided a
valuation for the lot(s) proposed to be sold, and the The general requirements for meeting the
sale is undertaken in accordance with the policy. accountability, transparency and legislation
requirement are explained in Part 2 Section 2. The
table on the following page sets out some additional
requirements that apply when an agency sells land
using a public process under the policy.

Victorian Government Land Transactions Policy 78

Sale

Table 31: Accountability, transparency and legislation requirements for the sale of land

Multi-
Direct
Publicly stage
Auction tender or
listed sale tender or
EOI
EOI

The land has been declared surplus and

the agency has satisfied the requirements
of the FROR process in the landholding
policy.

Any strategic land use assessment under

the land use policy has been completed.

A licensed real estate agent is appointed to

conduct the transaction unless:
• an exemption from the Estate Agents Act
1980 applies, or
• the sale of land is the core business of the
agency.

A probity advisor is engaged.

Legal and other expert advice is obtained

The reserve, listed price, or price used to

assess responses arising from a tender, EOI
or multi-stage process must not be less
than the current market value as
determined by VGV.

The reserve price is set before the auction,

close of tender or EOI, or listing the land
for sale.

Responses to a direct tender or EOI (where

the sales process is not being conducted by
a licensed real estate agent) or a multi-
stage tender or EOI, are lodged with an
agency or their legal representative.

Responses to a direct tender or EOI (where

the sales process is not being conducted by
a licensed real estate agent) or a multi-
stage tender or EOI, are opened by a
formally appointed assessment panel
comprising representatives of the agency
that may include an agency’s legal
representative.

79 Victorian Government Land Transactions Policy

 Transactions

Multi-
Direct
Publicly stage
Auction tender or
listed sale tender or
EOI
EOI

The reserve price is revealed to an

appointed licensed real estate agent at the
latest possible time:
• not prior to the day of auction, and
• not prior to the close of tender or EOI

The method of sale meets the requirements

for a public process.

The land is not sold prior to the conclusion

of the public sales process.

VGLM is engaged at each critical milestone

in the sales process.

The selling price and terms and conditions

are recorded in a fully executed contract or
agreement.

Agency tip: Requirement 3: VGLM approval

Agencies must obtain VGLM approval before

You can find more information on when to agreeing to sell land or an interest in land where the:
engage VGLM during a multi-stage EOI or • value of the land or the transaction is $1 million
tender process in Part 2 Section 4. (GST exclusive) or more, or
• land forms part of a group of related transactions
by the same seller including land which is part of a
Requirement 2: Due diligence
group of adjoining parcels proposed for sale,
Before selling land, agencies must conduct an where the total value of the land or related
appropriate level of due diligence. Due diligence is transactions is $1 million (GST exclusive) or more.
required before an agency sells land so that:
This section provides specific guidance on the VGLM
• the information can be made available to VGV so approval requirement as it relates to the sale of land
that it can consider all matters affecting the land or an interest in land. You can find general
in determining its current market value, information on the VGLM approval requirement in
• agencies can meet their requirement to disclose Part 2 Section 4.
certain information to potential purchasers under
section 32 of the Sale of Land Act 1962, and ensure
the information provided is complete and
accurate, and
• if possible, any issues or risks associated with the
land can be mitigated by including special
conditions in the contract.

You can find more information on the due diligence

requirement in the policy in Part 2 Section 3.

Victorian Government Land Transactions Policy 80

Victorian Government Land Transactions Policy

When should an agency lodge its submission approaches. A multi-stage approval process helps to
requesting VGLM approval to sell land? ensure all parts of the sales process comply with the
requirements in the policy.
Agencies are required to seek approval to sell land
using VGLM Online. Agencies must have all the The table below lists when an agency needs to lodge
information and documents needed to complete the its request for VGLM approval for the most common
relevant form in VGLM Online before lodging the methods of sale. Not every type of sale listed
submission. This includes a certified current market complies with the requirements in the policy because
valuation reflecting the terms and conditions of the it either involves selling land without a public process
proposed transaction and any issues identified as or is an excluded transaction such as a land
part of the due diligence process. exchange. If an agency is requesting VGLM approval
for a transaction that requires an exemption, it will
The point at which an agency must obtain VGLM need to:
approval depends on the method of sale and may • demonstrate it meets the requirements for an
require a multi-stage VGLM approval process. For exemption as part of the approval process, or
example, where an agency is entering into an
• if the exemption is one that VGLM, or the Minister
arrangement to sell land in the future (whether
for Planning on the advice of VGLM, can approve,
binding or not) or is conducting a multi-stage sale
request the exemption as part of the approval
process that involves making an initial approach to
process.
the market, followed by one or more further

81 Victorian Government Land Transactions Policy

 Transactions

Table 32: When an agency needs to lodge a request for VGLM approval to sell land

Stage in sales process when VGLM submission Exemption

Method
must be lodged Required

Auction Before the date of

the auction.

Public listing Before the land is

listed for sale.

Tender/EOI Before the EOI or

tender close date.

Multi-stage sale Before the initial Before shortlisting Before signing the
approach to the potential contract of sale or
market via an EOI purchasers. development
or registration of agreement.
interest.

Variation of existing Before any

development variation of a
agreement involving development
the sale of land agreement is
signed.

Sale by direct Before the land is

negotiation offered for sale.

Option Before an option Before the

agreement is contract of sale is
signed. signed.

Memorandum of Before the Before the

understanding or memorandum of contract of sale is
heads of agreement understanding or signed.
heads of
agreement is
signed.

Land exchange Before agreeing to

the exchange.

Gift Before making a

commitment to
gift land.

Granting an Before executing

easement the agreement
creating the
easement.

Victorian Government Land Transactions Policy 82

Sale

How long does VGLM approval to sell land Requirement 5: Sale price
remain valid?
Unless the land is being sold to a GG sector agency,
When VGLM approves a land sale, it bases its agencies must not sell or grant an interest in any
approval on advice from VGV regarding the current land at a price that is less than the current market
market value of the land. Provided there is no value of the land as determined by VGV. A GG sector
change to the terms and conditions of the sale, an agency may sell land to another GG sector agency
agency can continue to rely on its VGLM approval based on a current book value.
during the period VGV’s valuation remains current.
You can find more information on the valuation
The circumstances are different if VGV’s valuation requirements that apply when selling land to another
expires or the terms and conditions of the sale agency in Part 4 Section 4.
change before the contract of sale is signed by both
parties. In this case, agencies are required to obtain Can an agency sell land for more than VGV’s
updated valuation advice and further approval from current market value?
VGLM before selling the land.
The VGV’s valuation acts as a minimum price. An
Requirement 4: VGV valuation agency can sell land for a price that exceeds VGV’s
valuation.
Unless a GG sector agency is selling land to another
GG sector agency or the public university exemption What happens if VGV’s valuation expires before
applies, agencies must obtain a certified current an agency sells the land?
market valuation of land from VGV before selling
land. Under the policy an agency must sell land based on
its current market valuation. Therefore, if VGV’s
VGV provides different types of advice, which will be valuation expires before both parties sign the
treated as a certified current market value for the contract of sale, (or other form of agreement if the
purposes of the policy. For the sale of land, or an transaction is between agencies), an agency must
interest in land, an agency can rely on a: obtain an extension or review of the valuation from
• certified market valuation made in accordance VGV to ensure it meets this requirement.
with the VL Act, or
What happens if the terms of the transaction
• if Cabinet or a committee of Cabinet has endorsed change or further due diligence is conducted
the development outcome, or the responsible
after an agency obtains its VGV valuation?
Minister or statutory officer that owns the land has
confirmed in writing that a proposed development VGV will consider its valuation based on the terms
outcome supports an endorsed government policy, and conditions of sale and information about the
a certified assessment of the value of land based status and attributes of land an agency provides in
on the specific development outcome. its valuation instructions. If the terms and conditions
of sale change, or an agency identifies more
You can find more information on VGV valuations in
information about the land, it may impact the
Part 2 Section 5, and more information on the
valuation. Therefore, an agency must obtain
special valuation requirements that apply to GG
updated valuation advice from VGV to ensure it sells
sector agencies in Part 4 Section 4.
the land based on its current market value.
If an agency is selling land to another agency, and a
Some common examples of changes to a
VGV valuation is required, the agencies must jointly
transaction that will require further VGV advice are
instruct VGV requesting the valuation.
set out in the table on the following page.

83 Victorian Government Land Transactions Policy

 Transactions

Table 33: Changes to a transaction that require further VGV advice

Category Examples

Terms and Purchaser offers to buy land on terms that are different to the terms considered by
conditions VGV in determining the current market value of the land.

Purchaser requests special conditions that were not identified as conditions of the
sale in the initial valuation instructions to VGV. This may include the sale being subject
to the:
• purchaser obtaining finance
• purchaser conducting a further period of due diligence
• seller or purchaser conducting works on the land
• discharge of obligations such as GAIC
• reimbursement of certain costs and expenses.

A response to a request for proposal as part of a multi-stage tender or EOI process, is

based on different terms and conditions to VGV’s valuation.

A variation to an existing development agreement.

Due diligence The size and dimensions of the land were incorrect or have changed.

An additional encumbrance has been identified. This may include:

• a lease
• caveat
• easement, or
• adverse possession rights.

An agency conducts further due diligence and identifies issues that impact the future
use and development potential of the land, including contamination, cultural heritage,
or planning issues.

Agency tip:

If a land transaction requires VGLM

approval, you will need to make a submission
to VGLM based on the updated valuation,
even if VGLM has previously approved the
transaction. This allows VGLM to review the
changes to the transaction and ensure it still
complies with the policy.

Victorian Government Land Transactions Policy 84

Sale

Sales by direct tender or EOI and multi-stage Requirement 8: Land exchange

tender or EOI
Agencies are not permitted to sell land under a land
As part of selling land by direct tender or EOI or exchange arrangement unless they have obtained
multi-stage tender and EOI, agencies will develop a approval from the Assistant Treasurer or ERC, or
set of standards called evaluation criteria that guide another exemption applies.
the assessment of responses received. Agencies are
required to obtain a VGV valuation before assessing You can find more information on the land exchange
responses against any evaluation criteria that relate requirement in Part 2 Section 6 and more
to the sale price of land, so that: information on exemptions is available in Part 3.

• agencies are using a consistent and independent Requirement 9: Sale by public process
benchmark to evaluate responses, and
• agencies comply with the requirement not to sell Unless an agency is selling land to another agency,
land for an amount that is less than the current local council or the Commonwealth in accordance
market value of the land as determined by VGV. with the FROR process in the landholding policy,
agencies are required to sell land using a public
If the preferred proposal is based on terms and process. The requirements for selling land using a
conditions not considered by VGV in determining the public process, including information about the key
current market value of the land, an agency will need features of a public process and the methods of sale
to obtain updated valuation advice from VGV. VGV that meet this requirement, are set out in Part 2
advice may be in the form of: Section 7.
• a certified market valuation based on the terms
Easements
and conditions of the preferred proposal, or
• advice to confirm the existing market value, In contrast to the sale of land, an agency can sell an
together with VGV’s assessment of the preferred interest in land such as an easement without a
proposal. public process. However, all other policy
requirements continue to apply to the transaction.
This includes obtaining a VGV valuation, not selling
the easement for a price that is less than the current
market value as determined by VGV and obtaining
Agency tip: VGLM approval if the easement has a value of $1
million (GST exclusive) or more.

If VGV confirms the existing current market Requirement 10: Sale with a public land zone in place
valuation, but provides advice confirming the
Unless an agency is selling land to another agency,
proposal is reasonable, an agency will need local council or the Commonwealth, it cannot be
to seek approval from VGLM to sell land at offered for sale with a public land zone. This means
a price that is less than the current market an agency must ensure the most appropriate
planning controls are in place, before offering land
value of the land using the unsuccessful for sale.
public sales process exemption. You can find
more about this exemption in Part 3. You can find more information on the public land
zone requirement in Part 2 Section 8.

Exemptions
When selling land, an agency must comply with all
the policy requirements that apply unless it qualifies
for an exemption. Agencies can use the table on the
following page as a quick reference guide to the
exemptions which may be available subject to
meeting the relevant eligibility criteria.

You can find more detailed information on each

exemption in Part 3.

85 Victorian Government Land Transactions Policy

 Transactions

Table 34: Quick reference guide for sales exemptions

Land transaction requirements

Exemption
VGLM Sale Land Public sales Public land
approval price exchange process zone

Cabinet or
committee of Cabinet

Minister for Planning

Assistant Treasurer

VGLM – Sale after

unsuccessful public
process

ERC or Assistant
Treasurer - Land
exchange

Legislation

Recognition and
Settlement Agreement

Sale of residence to
renter under a
residential rental
agreement

Surplus railway land

Public universities

Victorian Government Land Transactions Policy 86

Purchase

2. Purchase
This section explains how the land transaction policy requirements
apply to the purchase of land

Background What is a land purchase?

The policy includes a number of specific Under the policy, a purchase involves any
requirements for the purchase of land. arrangement under which an agency agrees to
receive a land transfer from another party or an
This section will explain: interest in land.
• the types of transaction that fall within the
The broad meaning of purchase means that a range
meaning of purchase in the policy
of different land transactions must comply with the
• the land transaction requirements and how these requirements that apply to land purchases.
apply when an agency purchases land, and
• exemptions to the policy requirements that may The table below sets out some of those transactions.
apply when an agency purchases land. Provided an agency follows the policy requirements,
the only purchase transaction that requires an
exemption is the transfer of land under a land
exchange arrangement.

Table 35: List of purchase transactions

Purchase transaction What it involves

Purchase by public process Purchasing land that is publicly advertised for sale. This may include land
publicly listed for sale or land purchased at auction or after an EOI.

Purchase by negotiation Directly negotiating with a land owner to purchase land.

Purchase under a GAIC WIK The transfer of land to an agency in exchange for discharging the
agreement obligation to pay GAIC.

Land exchange approval The exchange of land between parties. Agencies require an exemption
under the policy before they can enter into a land exchange
arrangement.

Gift Receiving land, or an interest in land, as a gift.

Option to purchase land Entering into an agreement (sometimes called an option deed) to
purchase land at some time in the future.

Lease with option to Entering into a lease that gives an agency the right to purchase the land
purchase in the future.

Receiving the benefit of an Receiving a right to use another person’s land for a specified reason. An
easement easement is recorded on title and affects a defined area of the land.

87 Victorian Government Land Transactions Policy

 Transactions

When can an agency purchase land? Land transaction requirements

An agency can purchase any land, or interest in land, Part 2 of the policy provided information on each
provided it has the legislative authority to purchase of the land transaction requirements. This section
the land and the land is purchased according to the provides further guidance on the land transaction
requirements in any legislation and government requirements that apply to the purchase of land.
policy.
Requirement 1: Accountability, transparency and
Can an agency enter into an option agreement legislation
to purchase land?
An agency must ensure land purchases are
When an agency enters into an option agreement, it conducted to achieve accountability and
agrees to purchase land in the future, subject to transparency and are undertaken in accordance
certain conditions being met. An agency may enter with relevant legislation.
into an option to purchase, provided the terms of the
option are consistent with the policy. This includes The general requirements for meeting the
that the purchase price must be no more than the accountability, transparency and legislation
current market value of land as determined by VGV, requirement are explained in Part 2 Section 2. Some
and that the purchase of the land under the option additional requirements that apply to the purchase
agreement is subject to VGLM approval if the value of land, or an interest in land are set out below:
of the land exceeds the VGLM approval threshold. • A probity advisor is engaged for large and/or
complex purchase programs
To ensure all parts of the purchase process comply
• VGLM is engaged before any large and/or complex
with the policy an agency must obtain VGLM
purchase program commences
approval before an agency enters into the option
agreement, and then again before it exercises its • The purchase price and terms and conditions are
option to purchase land. recorded in a fully executed contract or agreement
such as a development agreement, and
An option may also involve the payment of an option • An offer to purchase land, or an interest in land,
fee, which can be deducted from the deposit or (binding or non-binding) is not made subject to
forfeited if the purchase does not proceed. Payment VGLM approval or meeting the other requirements
of an option fee is allowed under the policy, provided in the policy. There is more information on the
the payment accords with relevant departmental limited circumstances where conditional offers
procurement processes and has been approved by may be approved later in this section.
an authorised financial delegate.
Requirement 2: Due diligence
Can an agency offer to pay costs incurred
when a person sells land to an agency? Before purchasing land, agencies must conduct an
appropriate level of due diligence. Due diligence is
An agency can offer to reimburse reasonably required before an agency purchases land so that:
incurred costs, such as valuation or accounting • it can confirm the land is appropriate for the
expenses, provided that: proposed use
• there is an agency policy or procedure that • the information can be made available to VGV so
supports the agency reimbursing costs that they can consider all matters affecting the
• the payment of costs has been approved by an land in determining its current market value, and
authorised decision-maker, including Cabinet, a • if possible, any issues or risks associated with the
Minister or appropriately authorised financial land can be mitigated by including special
delegate conditions in the contract.
• if the purchase requires VGLM approval, the
agency has provided VGLM with advice about the You can find more information on the due diligence
nature of the costs it intends to reimburse, and requirement in the policy in Part 2 Section 3.
• the payment is made following agency
procurement processes and is approved by an
authorised financial delegate.

Victorian Government Land Transactions Policy 88

Victorian Government Land Transactions Policy

Requirement 3: VGLM approval The point at which an agency must obtain VGLM
approval depends on the method for purchasing the
Agencies must obtain VGLM approval before land. In some circumstances, a multi-stage VGLM
agreeing to purchase land or an interest in land process is required. This helps ensure all parts of the
where the: purchase process comply with the requirements in
• value of the land or the transaction is $1 million the policy.
(GST exclusive) or more, or
The table below lists when an agency needs to lodge
• the land forms part of a group of related
its request for VGLM approval for the most common
transactions by the same purchaser including land
methods of purchase. Not every type of purchase
which is part of a group of adjoining parcels
listed complies with the requirements in the policy. If
proposed for purchase, where the total value of the
an agency is requesting VGLM approval for a
related land or related transactions is $1 million
transaction that requires an exemption, it will need
(GST exclusive) or more.
to:
This section provides specific guidance on the VGLM • demonstrate it meets the requirements for an
approval requirement as it relates to the purchase of exemption as part of the approval process, or
land, or an interest in land. You can find more • if the exemption is one that VGLM, or the Minister
information on the VGLM approval requirement in for Planning on the advice of VGLM, can approve,
Part 2 Section 4. request the exemption as part of the approval
process.
When should an agency lodge its submission
requesting VGLM approval to purchase land?
Agencies are required to seek approval to purchase
land using VGLM Online. Agencies must have all the
information and documents required to complete
the relevant form in VGLM Online before lodging the
submission. This includes a certified current market
valuation reflecting the terms and conditions of the
proposed transaction and any issues identified as
part of the due diligence process.

89 Victorian Government Land Transactions Policy

 Transactions

Table 36: When an agency needs to lodge a request for VGLM approval to purchase land

Stage in purchase process when VGLM approval Exemption

Method
request must be lodged Required

Purchase at Before the date of the auction.

auction

Purchase of land Before making an offer to

listed for sale purchase land.

Tender/EOI Before submitting a response

to an EOI or tender.

Direct negotiation Before making an offer to

purchase land (informal or
formal).

Option Before an option agreement is Before the contract is signed.

signed.

GAIC WIK Before negotiations Before the GAIC WIK

agreement commence. agreement is signed

Memorandum of Before a memorandum of Before the contract is signed.

understanding understanding or heads of
and heads of agreement is signed.
agreement

Before agreeing to the land

Land exchange
exchange

Gift Before accepting or making a

commitment to accept gifted
land.

Benefiting from an Before executing the

easement agreement creating the
easement.

Can an offer to purchase land be made subject How long does VGLM approval to purchase
to VGLM approval? land remain valid?
An offer to purchase land must not be made subject When VGLM approves a land purchase, it bases its
to VGLM approval or meeting any of the other approval on advice from VGV regarding the current
requirements in the policy unless VGLM has given market value of the land. Provided there is no
the agency approval to make a conditional offer. change to the terms and conditions of the purchase,
an agency can continue to rely on its VGLM approval
VGLM will only approve the making of a conditional during the period VGV’s valuation remains current.
offer to purchase land in exceptional circumstances.
If VGLM provides approval to make a conditional The circumstances are different if VGV’s valuation
offer, agencies will be required to comply with strict expires, or the terms and conditions of the purchase
processes and controls. change before the contract is signed by both
parties. In this case agencies are required to obtain
Any agency wishing to make a conditional offer to updated valuation advice and further approval from
purchase land must request an engagement VGLM before purchasing the land.
meeting with VGLM before requesting to purchase
land on a conditional basis.

Victorian Government Land Transactions Policy 90

Purchase

Requirement 4: VGV Valuation Can an agency purchase land for less than
VGV’s current market value?
Unless a GG sector agency is purchasing land from
another GG sector agency based on a current book VGV’s valuation acts as a maximum price. An agency
value, before purchasing land, agencies must obtain can purchase land for a price that is less than the
a certified current market valuation of land from current market value of the land as determined by
VGV. VGV.
You can find more information on VGV valuations in What happens if VGV’s valuation expires before
Part 2 Section 5, and more information on the an agency purchases the land?
special valuation requirements that apply to GG
sector agencies in Part 4 Section 4. Under the policy an agency must purchase land
based on its current market valuation. Therefore,
If an agency is purchasing land from another agency, if VGV’s valuation has expired before both parties
and a VGV valuation is required, the agencies must sign the contract, (or other form of agreement if the
jointly instruct the VGV requesting the valuation. transaction is between agencies), an agency must
Requirement 6: Purchase price obtain an extension or review of the valuation from
VGV to ensure it meets this requirement.
Unless a GG sector agency is purchasing land from
another GG sector agency based on its book What happens if the terms of the transaction
valuation, or an exemption applies, agencies must change or further due diligence is conducted,
not purchase or grant an interest in any land at a after an agency obtains its VGV valuation?
price which is more the current market value of the
land as determined by VGV. VGV will base its valuation on the terms and
conditions of purchase and information about the
In limited circumstances, VGLM can approve the status and attributes of land an agency provides in its
purchase of land with strategic significance for an valuation instructions. If the terms and conditions of
amount in excess of VGV’s valuation. Where approval purchase change, or an agency identifies more
is granted, this operates as an exemption to the information about the land, it may impact the
purchase price requirement in the policy. valuation. Therefore, an agency must obtain updated
valuation advice from VGV to ensure it purchases the
You can find more information on the VGLM land based on its current market value.
exemption in Part 3.
Some common examples of changes to a
transaction that will require further VGV advice,
can be found in Part 4 Section 1.

Agency tip:

If a land transaction requires VGLM

approval, you will need to make a submission
to VGLM based on the updated valuation,
even if VGLM has previously approved the
transaction. This allows VGLM to review the
changes to the transaction and ensure it still
complies with the policy.

91 Victorian Government Land Transactions Policy

 Transactions

Requirement 8: Land exchange Exemptions

Agencies are not permitted to transfer land When purchasing land, an agency must comply
under a land exchange unless they have obtained with all the policy requirements that apply unless
approval from the Assistant Treasurer or ERC, it qualifies for an exemption. Agencies can use
or another exemption applies. the table below as a quick reference guide to the
exemptions which may be available subject to
More information on the land exchange requirement
meeting the relevant eligibility criteria.
can be found in Part 2 Section 6 and more
information on exemptions is available in Part 3. You can find more detailed information on each
exemption in Part 3.

Table 37: Quick reference guide for purchase exemptions

Land transaction requirements

Exemption
VGLM approval Purchase price Land exchange

Cabinet or
committee of Cabinet

Minister for Planning

Assistant Treasurer

VGLM – Purchase in
excess of VGV valuation

ERC or Assistant Treasurer

- Land exchange

Legislation

Public universities

Victorian Government Land Transactions Policy 92

Compensation

3. Compensation
This section explains how the land transaction policy requirements
apply when agencies make an offer of compensation

Background An offer of compensation includes all the

components of compensation that can be offered
The policy includes several requirements that apply under the LAC Act, including market value,
when an agency makes an offer of compensation disturbance, solatium, severance, special value and
under the LAC Act and Part 5 of the PE Act. professional expenses.

This section will explain: What is an offer of compensation made under

• What constitutes an offer of compensation under the Part 5 of the PE Act?
the LAC Act or Part 5 of the PE Act, and
Part 5 of the PE Act creates a right to compensation
• The land transaction requirements that apply to in certain circumstances where the owner or
making an offer of compensation under the LAC occupier of the land has suffered a financial loss
Act or Part 5 of the PE Act. due to the land being reserved for a public purpose
under a planning scheme, or that is proposed to
What is an offer of compensation? be reserved for a public purpose.

The policy applies to offers of compensation made For the purposes of the policy, an offer of
under the LAC Act and Part 5 of the PE Act. What compensation made under Part 5 of the PE Act is
constitutes an offer of compensation under each any offer made by an agency in response to a claim
of these Acts is explained further below. for financial loss under Part 5. This includes financial
loss associated with any of the following:
What is an offer of compensation made under
• the sale of land, impacted by a current or
the LAC Act? proposed public acquisition overlay
The LAC Act provides the legal framework for the • refusal to grant a permit on the basis the land is
compulsory acquisition of land in Victoria and required for a public purpose, or may be required
provides for compensation to be paid in several for a public purpose in the future
different circumstances. • access to land being restricted by the closure
of a road by a planning scheme, and
For the purposes of the policy, an offer of
compensation under the LAC Act is any offer of • removal or amendment of a public acquisition
compensation made by an agency: overlay.

• for the acquisition of an interest in land by Under Part 5 of the PE Act this will include
agreement after a notice of intention to acquire compensation for financial loss, effect on residence
has been served, but before the notice of and professional expenses.
acquisition acquiring that interest has been
published in the Victoria Government Gazette
Land transaction requirements
• after a notice of acquisition acquiring an interest
in land is published in the Victoria Government Part 2 of the policy provides information on each of
Gazette the land transaction requirements. This section will
• in response to a claim for compensation for an provide further guidance on the land transaction
abandoned acquisition requirements that apply to an offer to pay
compensation under the LAC Act or Part 5
• in response to a claim for compensation for entry
of the PE Act.
or temporary occupation of land, and
• for the advance of compensation to a person to
assist in purchasing a similar interest in land under
section 51(8) of the LAC Act.

93 Victorian Government Land Transactions Policy

 Transactions

Requirement 1: Accountability, transparency and Requirement 3: VGLM approval

legislation
Victorian government agencies must obtain
Agencies are required to ensure all land transactions VGLM approval before:
are conducted to achieve accountability and • making an offer of compensation under the LAC
transparency and are undertaken in accordance Act or Part 5 of the PE Act where the total amount
with relevant legislation. of compensation is $1 million or more, and
The general requirements for meeting the • making any offer of additional compensation
accountability, transparency and legislation under the LAC Act, or Part 5 of the PE Act to settle
requirement were set out in Part 2 Section 2. a disputed claim.
These also apply to an agency when making
VGLM approval is required in two different scenarios,
an offer to pay compensation under the LAC Act
each is explained further below.
and Part 5 of the PE Act.

Requirement 2: Due diligence Approval before making an offer of

compensation of $1 million or more
Agencies are required to conduct an appropriate
level of due diligence before making an offer of Agencies are required to make an offer of
compensation. Due diligence is required so that: compensation using the Compensation Land
Acquisition or Compensation Planning and
• the information can be made available to VGV
Environment form on VGLM Online. Unless special
so it can consider all matters affecting the land
arrangements have been made with VGLM, agencies
in assessing an amount of compensation, and
must have all the information and documents
• the conditions of offer can address any issues or required to complete the relevant form in VGLM
risks associated with the land. Online before lodging the submission. This includes
a certificate of valuation issued by VGV which
Given offers of compensation must be made within
provides an assessment of market value
strict legislative timeframes and agencies may not
compensation as at the date of acquisition, or
have had prior access to the land, there will be
financial loss compensation as at the date the
limited circumstances when agencies can’t conduct
right to compensation was triggered.
all the due diligence required under the policy before
an offer of compensation is made. In determining whether the total amount of
compensation is $1 million or more, agencies must
If for valid reasons an agency requires more time to
have regard to all components of an offer of
complete due diligence, an offer of compensation
compensation. For an offer of compensation under
can be made provided the offer is subject to
the LAC Act this will include compensation for market
conditions that allow compensation to be adjusted
value, disturbance, solatium, severance, special value
subject to the outcome of any further due diligence,
and the claimant’s professional expenses, and for
and the required conditions have been endorsed by
an offer under Part 5 of the PE Act it will include
the agency’s legal adviser(s). Agencies must still
compensation for financial loss, effect on residence
complete the required due diligence after making an
and the claimant’s professional expenses.
offer. If further due diligence discloses issues that
relate to the status or attributes of the land after an
agency has made an offer, the agency must obtain
updated valuation advice from VGV. In all cases,
agencies must conduct an initial assessment of the
contamination status of land before making an offer.
Agency tip:

If an offer of compensation requires VGLM approval, To ensure VGLM has all the information
agencies must advise VGLM if the required due
diligence has not been completed, providing valid it needs to make a decision, you will need
reasons why, setting out their progress, and the to include an offer summary when you
special conditions it intends to rely on in making request VGLM approval to make an offer.
an offer.
Your offer summary can be attached to the
Offer Details tab in the Compensation Land
Acquisition and Compensation Planning and
Environment forms on VGLM Online.

Victorian Government Land Transactions Policy 94

Compensation

Approval of an additional amount of Does an agency need to seek approval of

compensation an offer of compensation that is less than
$1 million where the land acquired forms
VGLM can only approve an offer including additional part of a group of related acquisitions?
compensation in exceptional circumstances, where
the matter has been referred to VCAT or the Court, VGLM approval is only required where an individual
or the claim is disputed and there is a reasonable offer of compensation is for an amount which is
prospect that legal proceedings will be initiated. An $1 million (or more).
agency is required to obtain VGLM approval for any
offer that includes additional compensation, even if
the total offer of compensation remains below the
VGLM approval threshold of $1 million.
Example:
Agencies can request approval using the
Compensation Land Acquisition or Compensation An agency acquires land under the
Planning and Environment forms on VGLM Online.
LAC Act. Before the land was acquired,
company A was the registered
proprietor of the land and company
B was the lessee. The agency is
Agency tip:
proposing to make an offer of
compensation to company A for their
You can find more information about
freehold interest in the amount of $1.5
the supporting evidence you will need to
million, and an offer to company B for
provide VGLM when seeking approval for an
their leasehold interest in the amount
additional amount of compensation in the
of $500,000.
Resources section on VGLM Online.
In this example, the offer to company
A requires VGLM approval, because
it exceeds the VGLM approval
threshold of $1 million. However, the
offer to company B is below the VGLM
approval threshold and does not
require VGLM approval, even though
their entitlement to compensation
arises from the acquisition of the same
land.

When should an agency lodge its submission

requesting VGLM approval to make an offer of
compensation?
An agency must obtain VGLM approval before
making an offer of compensation. An offer of
compensation cannot be made subject to VGLM
approval.

95 Victorian Government Land Transactions Policy

 Transactions

How long does VGLM approval to make an offer only engage another expert witness(es) based
compensation remain valid? on legal advice. In accordance with the Supreme
Court Expert Witness Code of Conduct and the
If VGLM provides approval for an agency to make an VCAT Expert Evidence Practice Note, an expert
offer of compensation, the offer remains valid until witness is not an advocate for a party and has a
the agency makes any revised offer of paramount duty, overriding any duty to the party to
compensation. the proceedings or other person retaining the expert
witness, to assist the Supreme Court or VCAT
An agency must obtain VGLM approval before impartially on matters relevant to their area of
making any revised offer of compensation that expertise. Accordingly, after a matter has been
exceeds the VGLM approval threshold, or an offer referred to VCAT or Supreme Court for
that includes additional compensation to settle a determination, VGV will not issue any further
disputed claim. certified assessments of compensation. This means
that an agency’s legal adviser can instruct the
How long does it take for VGLM to review a valuation expert(s) directly.
request for approval to make an offer of
compensation? An agency must still obtain VGLM approval for all
revised offers that meet the requirements for VGLM
To assist agencies to meet legislative timeframes for approval before they are made. However, once a
making an offer, VGLM will make a decision on a dispute has been referred, VGLM may approve an
request for approval within seven business days of offer of market value or financial loss compensation
receiving all the necessary information. supported by evidence from any expert valuation
witness in the proceeding.
Requirement 4: VGV Valuation
Mediations and compulsory conferences
Agencies must obtain and rely on certified VGV
advice when making an offer of market value Mediations and compulsory conferences are
compensation under the LAC Act or financial loss meetings where the parties come together to try
compensation under Part 5 of the PE Act. and reach an agreement about the amount of
compensation payable. Mediations are facilitated by
In some circumstances, VGV will require other expert
a mediator and compulsory conferences are
advice to make its assessment of market value
conducted by a VCAT member. The Supreme Court
compensation, or agencies will need advice to
or VCAT can order a mediation or compulsory
determine other compensation amounts such as
conference, or sometimes this can be initiated by the
disturbance. Some common examples include town
parties to the legal proceeding.
planning, engineering and quantity surveying,
business valuation, loss of profits assessment, There are several reasons VGLM is required to
destruction value of a business, or relocation attend, including:
assessment. VGV’s VSP can provide allied advice in
• helping to maintain probity
most of these disciplines.
• providing advice on the requirements of the policy
Requirement 7: Offer of market value compensation, • approving a revised offer of compensation, and
or financial loss compensation
• approving making an offer of additional
Agencies must not offer an amount of compensation compensation under the LAC Act, or Part 5 of the
for market value under the LAC Act, or financial loss PE Act to settle a disputed claim.
compensation under Part 5 of the PE Act that is
VGLM must attend all mediations and compulsory
more than the assessment of compensation
conferences even if the total offer of compensation
determined by VGV, unless the matter has been
is under the VGLM approval threshold of $1 million.
referred to VCAT or Supreme Court for determination
and the VGLM has approved the offer. If VGLM approves an offer at a mediation or
compulsory conference, an agency still needs to
What advice can be relied upon once a matter
lodge a request for approval so that VGLM can
has been referred? formally confirm the approved offer. An agency can
Once a matter has been referred, agencies will need do this using VGLM Online after the mediation or
to rely on an expert valuation witness(es). In some compulsory conference. This process does not
circumstances it may be appropriate to rely on more prevent a matter from settling at a mediation or
than one expert valuation witness. An agency must compulsory conference.

Victorian Government Land Transactions Policy 96

Government to government

4. Government to government
This section explains how the land transaction policy requirements
apply to land transactions between government agencies

Background Requirement 1: Accountability, transparency and

follow legislation
A government to government transaction is a land
transaction between an agency and another agency, An agency must ensure all land transactions are
local council or the Commonwealth. conducted to achieve accountability and
transparency and are undertaken in accordance
There are two types of government to government with relevant legislation.
transactions, as follows:
The general requirements for meeting the
• inter-agency transactions which are land
accountability, transparency and legislation
transactions between two agencies, and
requirement are explained in Part 2 Section 2. Except
• inter-government transactions which are land for the requirement relating to documenting a sale
transactions between an agency and a local or purchase in a contract or agreement these
council or the Commonwealth. requirements apply equally to inter-agency
transactions.
This section will explain how the requirements in the
policy apply to each type of government to Agencies can choose any method for documenting
government transaction. an inter-agency transaction, provided the method is
transparent and sets out the terms and conditions of
Inter-agency transactions the transaction. This may include a contract of sale,
memorandum of understanding, or exchange of
The Victorian government is committed to ensuring letters. Whichever method an agency chooses, it
that surplus government land is identified and used must still meet any additional legal requirements for
to provide best value for Victorians. In some transferring land, including those under the Transfer
circumstances, this will involve an agency of Land Act 1958 or Land Act 1958.
transferring land to another government agency to
build infrastructure and/or deliver services to the Requirement 2: Due diligence
Victorian community.
Before undertaking a land transaction, agencies are
To make transferring land between agencies as easy required to conduct an appropriate level of due
as possible, some of the land transaction diligence. This requirement applies equally to
requirements in the policy apply differently to inter-agency transactions to ensure that:
transactions between agencies. This section will • the agency purchasing the land can confirm the
explain how each of the policy requirements applies land is suitable for its proposed use
to inter-agency transactions.
• if possible, any issues or risks associated with the
land can be mitigated by making the transaction
subject to special conditions, and
• if a VGV valuation is required, the information can
be made available to VGV so it can consider all
matters affecting the land in determining the
current market value of the land.

It is up to agencies to agree how risks or issues

identified during the due diligence process are
managed and reflected in the terms and conditions
of the transaction.

More information on the due diligence requirements

is in Part 2 Section 3.

97 Victorian Government Land Transactions Policy

 Transactions

Requirement 3: VGLM approval Is a check valuation required for

transactions between two agencies?
The requirement to obtain VGLM approval does not
apply where the land transaction is between A check valuation is not required as part of the VGV
agencies. However, agencies must still comply with valuation process if the land transaction is between
the other requirements in the policy that apply to two agencies.
inter-agency transactions.
You can find more information on check valuations
VGLM may conduct compliance audits to check in Part 2 Section 5.
agencies are complying with the policy when
undertaking land transactions that do not require Requirements 5 and 6: Sale price and purchase price
VGLM approval. You can find more information on
compliance audits in Part 2 Section 4. Under the policy agencies must not:
• sell land or an interest in any land at a price, which
Requirement 4: VGV valuation is less than the current market value of the land as
determined by VGV, or
Before undertaking a land transaction, agencies
must generally obtain a certified current market • purchase land or an interest in land at a price,
valuation of the land from VGV. which is more than the current market value of the
land as determined by VGV.
However, to make land transactions between two
GG sector agencies as streamlined as possible, they This requirement applies to land transactions
can use the book value of land as the sale/purchase between two agencies, unless the transaction is
price. Therefore, the VGV valuation requirement between two GG sector agencies based on the book
does not apply if the land transaction is between value of the land, or another exemption applies.
two GG sector agencies based on the book
If a transaction is between two GG sector agencies,
valuation of the land.
the agencies can rely on the book valuation for the
If there is no book valuation, the book valuation is sale or purchase price, unless the book valuation is
out of date, or the transaction involves a type of out of date, or no book valuation exists.
government agency known as a public non-financial
You can find out more information on the book value
corporation (PNFC), agencies must obtain a certified
of land below.
current market valuation from VGV. However,
agencies can request this valuation is provided in What is the book value of land?
the form of a simplified valuation. A simplified
valuation is a certified current market valuation of The book value of land is the value used by agencies
the land as determined by VGV in a short form for financial reporting purposes.
valuation report.
Book valuations are determined by VGV based on
You can find out whether an agency is a GG sector the fair value of an asset. VGV conducts a
agency or a PNFC in the ‘controlled entities list’ revaluation of each agency’s public assets, as at a
within the Annual Financial Report of the State of specific date, every five years.
Victoria, which is published on DTF’s website.
For financial reporting purposes, the value of land
When a land transaction involves an agency that is and building assets are recorded separately. In some
not a GG sector agency or a PNFC, there is no circumstances, the value of fixtures or improvements
entitlement to a simplified valuation report. In this on the land may also have a separate record.
case, a standard current market valuation must be Therefore, the book value agencies rely on to
requested from VGV. support a transaction must be the combined value
of all the relevant components.

An agency should seek advice from its finance area

to confirm the book valuation before undertaking a
Agency tip: land transaction.

If you need a VGV valuation for an inter-

agency transaction, the agencies must
jointly instruct VGV requesting the valuation.

Victorian Government Land Transactions Policy 98

Government to government

When is a book valuation out of date? You can find more information on the land exchange
requirement in Part 2 Section 6 and more
In Victoria, public assets, including land and information on exemptions in Part 3.
buildings, are valued by VGV on a five-year rotating
cycle. Within this cycle, Victorian government Requirement 9: Public sales process
financial reporting directions require agencies to
conduct an annual fair value assessment of assets, The requirement to sell land using a public process
to determine whether additional revaluations need does not apply where an agency is selling land to
to be undertaken within the revaluation cycle. another agency, in accordance with the FROR
process in the landholding policy. This includes
A book valuation is up to date, provided it satisfies circumstances where the agency has been granted
the revaluation requirements that apply under the an exemption from the FROR process under the
Victorian government financial reporting directions. landholding policy.
An agency should seek advice from its finance area
to confirm the book valuation is up to date before You can find more information on the public sales
undertaking a land transaction. process requirement in Part 2 Section 7.

Requirement 10: Public land zone

What happens if my book valuation is out of
date or there is no book valuation? The requirement that agencies must not sell land
with a public land zone in place does not apply to
Agencies will need to obtain a current market
land transactions between two agencies, where the
valuation from VGV but can request VGV provides a
agency purchasing the land is permitted to own land
simplified valuation.
with a public land zone. However, if an agency is
If the transaction involves part of an existing selling land to another agency for a different public
use, it must be a condition of sale that the purchaser
parcel of land, can an agency use a book value
commences arrangements for the planning scheme
on a pro-rata basis? to be changed to reflect the new use within 12
As a separate book valuation does not exist for the months.
part of the land being transacted, an agency will
You can find more information on the public land
need to obtain a current market valuation from VGV.
zone requirement in Part 2 Section 8.
This valuation can be requested in the form of a
simplified valuation. Requirement 11: Lease with option to purchase
Requirement 7: Offer of market value compensation, The requirement that an agency must not lease land
or financial loss compensation with an option to purchase does not apply in
circumstances where the option is granted to
Agencies must not offer an amount of market value
another agency (that is a Victorian government
compensation under the LAC Act or financial loss
agency, not a local council or the Commonwealth).
compensation under Part 5 of the PE Act, which is
However, the other requirements in the policy
more than the assessment of compensation
continue to apply. This means that if the option is
determined by VGV.
exercised, the land must be sold at a price that is no
You can find more information on the requirements less than the current market value of the land as
for making an offer of compensation in Part 4 determined by VGV, or the book value of the land if
Section 3. These requirements apply to an offer of the transaction is between two GG sector agencies.
compensation made to another agency in the same
way as they apply to an offer of compensation made
to any other person.

Requirement 8: Land exchange

Agencies are not permitted to transfer land to

another agency under a land exchange unless they
have obtained approval from the Assistant Treasurer
or the ERC, or another exemption applies.

99 Victorian Government Land Transactions Policy

 Transactions

Exemptions reference guide to the exemptions which may be

available subject to meeting the relevant
An agency must comply with all the policy eligibility criteria.
requirements that apply to inter-agency
transactions unless it qualifies for an exemption. You can find more detailed information on each
Agencies can use the table below as a quick exemption in Part 3.

Table 38: Quick reference guide to inter-agency exemptions

Land transaction requirements

Exemption
Sale price Purchase price Land exchange

Cabinet or
committee of Cabinet

Minister for Planning

Assistant Treasurer

VGLM – Purchase in excess

of VGV valuation

ERC or Assistant Treasurer

- Land exchange

Legislation

Public universities

Agency tip:

Agencies must still comply with the

requirements in the policy when undertaking
a transaction with a public university that
qualifies for the public university exemption.

Victorian Government Land Transactions Policy 100

Government to government

Inter-government transactions is part of a group of adjoining parcels proposed for

sale or purchase, where the total value of the
An inter-government transaction is a land related land or related transactions is $1 million
transaction with a local council or the (GST exclusive) or more
Commonwealth. Except for the public sales process • Granting a lease where the:
and public land zone requirements, the requirements
– book value of the land that will be leased is
in the policy apply to inter-government transactions
$5 million (GST exclusive) or more in greater
in the same way as other transactions.
Melbourne for a term exceeding five years, or
Although the policy requirements do not apply to – book value of the land that will be leased is
local councils or the Commonwealth, agencies must $3 million (GST exclusive) or more in regional
comply with the policy requirements when Victoria for a term exceeding five years.
undertaking land transactions with these • making an offer of compensation under the LAC
government entities. Act, or Part 5 of the PE Act where the total amount
of compensation is $1 million (GST exclusive) or
This section will explain how each of the policy
more, or
requirements applies to inter-government
transactions. • making an offer of additional compensation under
the LAC Act, or Part 5 of the PE Act to settle a
Requirement 1: Accountability, transparency and disputed claim.
follow legislation
You can find more information on the VGLM
Agencies must ensure all land transactions are approval requirement in Part 2 Section 4.
conducted to achieve accountability and
transparency and undertaken in accordance with Requirement 4: VGV valuation
relevant legislation.
Before undertaking a land transaction with a local
The general requirements for meeting the council or the Commonwealth, agencies are required
accountability, transparency and legislation to obtain a certified current market valuation of the
requirement were explained in Part 2 Section 2. land from VGV.
These requirements apply equally to inter-
In limited circumstances, the Assistant Treasurer
government transactions.
may approve the sale of land to a local council or the
Unlike transactions between agencies, an agency Commonwealth, at its restricted use value as
must document transactions with a local council or determined by VGV. Agencies need to instruct VGV to
the Commonwealth in a signed contract that sets provide both a current market value and a restricted
out the terms and conditions of the transaction. use value of the land if they intend to apply for this
exemption.
Requirement 2: Due diligence
Is a check valuation required for transactions
Before undertaking a land transaction, agencies between an agency and a local council or the
must conduct an appropriate level of due diligence. Commonwealth?
This requirement applies to all inter-government
transactions. A check valuation is not required as part of the VGV
valuation process if the land transaction is with a
You can find out more about the due diligence local council or the Commonwealth.
requirements in Part 2 Section 3.
You can find more information on check valuations
Requirement 3: VGLM approval in Part 2 Section 5.
Agencies must obtain VGLM approval to undertake a Requirement 5: Sale price
land transaction with a local council or the
Commonwealth before: Unless an exemption applies, agencies must not sell
• agreeing to sell or purchase land where the value land or an interest in any land to a local council or
of the land or transaction is $1 million (GST the Commonwealth at a price, which is less than the
exclusive) or more current market value of the land as determined by
VGV.
• agreeing to sell or purchase land where the land
forms part of a group of related transactions by In limited circumstances, the Assistant Treasurer
the same seller or purchaser, including land which may approve the sale of land to a local council or the

101 Victorian Government Land Transactions Policy

 Transactions

Commonwealth at a price that is no less than the Requirement 8: Land exchange

restricted use value of the land as determined by
VGV with a restriction on title limiting the use of Agencies must not transfer land to a local council
the land for public and community purposes. or the Commonwealth under a land exchange
arrangement unless they have obtained approval
You can find more information on the Assistant from the Assistant Treasurer or the ERC, or another
Treasurer exemption in Part 3 Section 2. exemption applies.

Requirement 6: Purchase Price You can find out more about the land exchange
requirement in Part 2 Section 6 and about
Unless an exemption applies, agencies must not exemptions in Part 3.
purchase land, or an interest in land, from a local
council or the Commonwealth at a price that is more Requirement 9: Public sales process
than the current market valuation of the land, as
determined by VGV. The requirement to sell land using a public process
does not apply where an agency is selling land to a
Requirement 7: Offer of compensation local council or the Commonwealth in accordance
with the requirements of the FROR process in the
Agencies must not offer an amount of market value landholding policy. This includes circumstances
compensation under the LAC Act or financial loss where the agency has been granted an exemption
compensation under Part 5 of the PE Act, which is from the FROR process under the landholding policy.
more than the assessment of compensation
determined by VGV. You can find more information on the public sales
process requirement in Part 2 Section 7.
You can find more information on the requirements
for making an offer of compensation in Part 4 Requirement 10: Public land zone
Section 3. These requirements apply to an offer of
compensation made to another government agency The requirement that agencies must not sell land
in the same way as they apply to an offer of with a public land zone in place does not apply to
compensation made to any other party. land transactions with a local council or the
Commonwealth. However, if an agency is selling land
As the Commonwealth Constitution gives the to a local council for a different public use, it must be
Commonwealth exclusive power to make laws for all a condition of sale that the purchaser commences
land acquired by the Commonwealth for public arrangements for the planning scheme to be
purposes, agencies cannot use the LAC Act to changed to reflect the new use within 12 months.
acquire Commonwealth land. If an agency wishes to
acquire Commonwealth land to build infrastructure You can find more information on the public land
or deliver services it will need to reach an agreement zone requirement in Part 2 Section 8.
with the Commonwealth to purchase the land,
according to the policy requirements. Exemptions
An agency must comply with all the policy
requirements that apply to inter-government
transactions unless it qualifies for an exemption.
Agencies can use the table on the following page as
a quick reference guide to the exemptions which
may be available subject to meeting the relevant
eligibility criteria.

You can find more detailed information on each

exemption in Part 3.

Victorian Government Land Transactions Policy 102

Victorian Government Land Transactions Policy

Table 39: Quick reference guide to inter-government exemptions

Land transaction Requirements

Exemption
VGLM approval Sale price Purchase price Land exchange

Cabinet

Minister for Planning

Assistant Treasurer

VGLM - Purchase in excess

of VGV valuation

ERC or Assistant Treasurer

- Land exchange

Legislation

Public universities

103 Victorian Government Land Transactions Policy

 Transactions

5. Leasing
This section explains how the land transaction policy requirements
apply when agencies lease land

Background Leases should also comply with other government

policies that may apply such as the Leasing Policy
The policy includes several specific requirements for for Victorian Crown Land and Victorian Office
leasing land. Accommodation Guidelines and Building Standards,
and relevant legislation including the Retail Leases
This section will explain: Act 2003.
• What constitutes a lease under the policy
• The land transaction requirements and how Land transaction requirements
these apply when an agency leases land, and
Part 2 of the policy provided information on each of
• Exemptions to the policy requirements that
the land transaction requirements. This section will
may apply when an agency leases land.
provide further guidance on how the land
What is a lease? transaction requirements apply when leasing land.

A lease is an agreement in which the agency Requirement 1: Accountability, transparency and

granting the lease (the lessor) gives another person follow legislation
(the lessee) an exclusive right to occupy land for An agency must ensure leasing transactions are
a specific term subject to the terms and conditions conducted to achieve accountability and
in the lease agreement. transparency and are undertaken in accordance
Agencies may grant a lease over land that they with relevant legislation.
own, or acquire a lease over land owned by The general requirements for meeting the
another person. accountability, transparency and legislation
A lease differs from a licence in that a licence requirement are set out in Part 2 Section 2.
permits the holder to carry out a permitted activity These requirements apply equally to leasing land.
on the land but does not give the licensee (licence In addition to those requirements agencies must
holder) a right of exclusive occupation. The policy also ensure that new leases are granted using a
does not apply to licences. competitive selection process, unless the public
benefit of directly granting a lease outweighs the
When can an agency lease land?
benefits that may be produced using a competitive
An agency can lease land (as lessor or lessee), process.
provided it has legislative authority and complies
Leases must also be documented in a signed lease
with applicable legislative requirements and
agreement, which clearly sets out the terms and
government policies.
conditions of the lease, including:
Under the landholding policy, surplus land (as • Identifying the lessee and lessor
defined in that policy) must be sold. Therefore, • Identifying the land subject to the lease
before leasing any land, the relevant decision-maker
• The term of the lease
(that is the person permitted to lease land under the
relevant legislation) must be satisfied that the • The rent amount and when it is payable, and
requirements of the landholding policy have been • The lessee and lessor’s obligations under the
met. If an agency is unsure whether land is surplus, it lease, including responsibilities for outgoings,
should seek further advice from DTF. This insurance and repairs and maintenance.
requirement applies even if the leasing transaction
qualifies for an exemption under this policy.

Victorian Government Land Transactions Policy 104

Leasing

Requirement 2: Due diligence

Before leasing land, agencies are required to Example:

conduct an appropriate level of due diligence to
ensure that:
• if an agency is acquiring a lease in land it can
An agency grants a lease for an initial
confirm the land is suitable for its proposed use period of three years, with an option to
• any issues or risks associated with the land can be renew the lease for two further terms
addressed in the terms of the lease agreement, of three years.
and
For the purposes of the VGLM approval
• the information can be made available to VGV so it
can consider it when determining the current requirement, this lease is a lease with
market rental value. a term exceeding five years, even if the
lessee never exercises the option to
You can find more information on the due diligence
requirement in Part 2 Section 3. renew.

Requirement 3: VGLM approval

Unless an exemption applies, agencies must obtain How do I know whether the land is in regional
VGLM approval before agreeing to grant a lease over Victoria or greater Melbourne?
land, if the lease is for a term exceeding five years,
and: Regional Victoria means the regional councils listed
• if the land is in greater Melbourne, the land has a in Part 6 Appendix 4. If the land is not in one of these
book value of $5 million (GST exclusive) or more, areas, it is in greater Melbourne for the purposes of
and the VGLM approval requirement.
• if the land is in regional Victoria, the land has a
What is the book value of land?
book value of $3 million (GST exclusive) or more.
The book value of land is the value used by agencies
Therefore, to determine whether an agency requires
for financial reporting purposes.
VGLM approval before granting a lease, it must
establish the following: You can find out more about book valuations
• whether the lease term exceeds five years in Part 4 Section 4.
• whether the land is located in greater Melbourne
or regional Victoria When is a lease excluded from the requirement
to obtain VGLM approval?
• the book value of the land, and
• whether granting the lease is excluded from the Leases between two agencies are excluded from the
requirement for VGLM approval. requirement for VGLM approval.

You can find more information on each of these There are also some exemptions in the policy that
matters below. provide an exemption from the requirement to
obtain VGLM approval, such as the public university
What is a lease term exceeding five years? and agency-specific exemptions.

A lease term will exceed five years in the following You can find more information on the exemptions
circumstances: from the leasing requirements below.
• the lease term is more than five years, or
If the threshold for VGLM approval is satisfied,
• the lease term is less than five years, but the
when should an agency request approval to
lessee has an option to renew the lease for a
further period, which would result in the lease grant the lease?
term exceeding five years. Agencies are required to seek VGLM approval before
agreeing to grant the lease.

105 Victorian Government Land Transactions Policy

 Transactions

Agencies must seek approval by completing the an agency proposes to grant a large number of
Leasing form on VGLM Online. Agencies must have low-value leases for similar types of land. An
all the information and documents needed to agency will need to engage VGV if it thinks that it
complete the relevant form in VGLM Online before may be appropriate to calculate market rent for
lodging the submission. Unless an exemption applies, land in this way.
this includes a certified current VGV rental valuation
reflecting the terms and conditions of the proposed There are no exemptions that apply to the
lease. requirement to obtain a VGV valuation when an
agency is acquiring a lease over land. However, the
Can an agreement to grant a lease be made following exemptions may apply when an agency is
subject to VGLM approval? granting a lease over land:
• public university exemption
An agreement to grant a lease must not be made
• alternative valuation exemption, and
subject to VGLM approval, or meeting any of the
other requirements in the policy unless VGLM has • agency-specific exemptions.
given the agency approval.
You can find more information on VGV valuations in
Agreeing to grant a lease subject to meeting any of Part 2 Section 5 and exemptions in Part 3.
the requirements in the policy will only be approved
by VGLM in special circumstances. If VGLM provides Is a check valuation required for leasing
approval, agencies will be required to comply with transactions?
strict processes and controls.
A check valuation is not required as part of the VGV
Any agency wishing to enter into a conditional valuation process for leases.
agreement to grant a lease in land, must request an
If an agency thinks a check valuation might be
engagement meeting with VGLM before requesting
beneficial, it can discuss this with VGV. The VGV may
to grant a lease on a conditional basis.
also recommend a check valuation in certain
How long does VGLM approval to grant a lease circumstances.
over land remain valid? Requirement 5 and Requirement 6: Lease price
When VGLM approves granting a lease, it bases its Unless an exemption applies, an agency must not:
approval on VGV advice regarding the current rental
value of the land. Provided there is no change to the • grant a lease over any land at a price that is less
terms and conditions of the lease, an agency can than the current market rental value of the land as
continue to rely on its VGLM approval during the determined by VGV, and
period VGV’s valuation remains current. • acquire a lease over any land at a price that is
more than the current market rental value of the
If VGV’s valuation expires or the terms and land as determined by VGV.
conditions of the lease change before the lease
agreement is signed, agencies are required to obtain More information on the exemptions that may apply
updated valuation advice and further approval from to these requirements are provided in the
VGLM before granting the lease. exemptions section below.

Requirement 4: VGV valuation Requirement 11: Lease with an option to purchase

Unless an exemption applies, agencies must obtain a An agency must not grant a lease of land that
certified current rental valuation of the land from contains an option to purchase unless the lease and
VGV before granting a lease. option to purchase is being granted to another
agency.
VGV provides different types of advice, which will be
treated as a certified current rental value under the You can find out more about this requirement
policy. For leases this is a: in Part 2 Section 9.
• certified market rental valuation, or
• certified pre-determined formula for calculating
market rent such as a rate card.

Valuations based on a pre-determined formula such

as rate cards are generally only appropriate where

Victorian Government Land Transactions Policy 106

Leasing

Exemptions
An agency must comply with all the policy
requirements that apply to leasing transactions
unless it qualifies for an exemption. Agencies can use
the table below as a quick reference guide to the
exemptions which may be available subject to
meeting the relevant eligibility criteria.

You can find more detailed information on each

exemption in Part 3.

Table 40: Quick reference guide to leasing exemptions

Land transaction requirements

Exemption
VGLM approval VGV valuation Price – granting Price – acquiring
a lease a lease

Cabinet or committee
of Cabinet

Minister for Planning

VGLM – Lease after

unsuccessful public
process

Responsible Minister
or statutory officer –
lease terms

Responsible officer or
statutory officer -
Public and community
purposes

Legislation

Public universities

Alternative valuation

Agency specific
exemptions

An agency should request an early engagement

meeting with VGLM if it has any concerns about
meeting the leasing requirements in the delivery
of a government policy commitment.

107 Victorian Government Land Transactions Policy

 Transactions

Victorian Government Land Transactions Policy 108

Part 5:
Glossary and
Abbreviations

109 Victorian Government Land Transactions Policy

 Glossary and Abbreviations

1. Glossary

Administrative office

An administrative office established through an order in council under section 11 of the Public
Administration Act 2004.

Agency

See Victorian government agency, below.

Book value

The book value of land is the value used by Victorian government agencies for financial reporting
purposes. The meaning of book value under the policy is set out in Part 4 Section 4.

Claimant

A person or entity who makes or is entitled to make a claim for compensation under the Land Acquisition
and Compensation Act 1986 or Part 5 of the Planning and Environment Act 1987.

Commonwealth

The government of the Commonwealth of Australia.

Contract

A contract may include a contract of sale, lease agreement, option agreement, development agreement
or grant of an easement.

Decision-maker

A person who has the legal authority to approve a land transaction or can grant an exemption from the
land transaction requirements in the policy.

Department

An entity formed to assist Ministers perform their portfolio function and are the means by which
government policy are implemented. Departments are part of the Crown and do not have a separate
legal identity. They are established and abolished through an Order in Council made under section 10 of
the Public Administration Act 2004.

Disputed claim

Has the same meaning as in the Land Acquisition and Compensation Act 1986.

Exemption

An exemption may relieve an agency from complying with a specific land transaction requirement(s)
subject to meeting certain eligibility criteria. The exemptions and their eligibility criteria are set out in
Part 3.

Expression of interest

A method of selling land where offers are made by prospective purchasers and considered at a pre-
specified date by a licensed real estate agent or an evaluation panel.

Victorian Government Land Transactions Policy 110

Glossary

First Right of Refusal

The landholding policy process that requires Victorian government agencies to offer surplus land for sale
through a ‘first right of refusal’ (FROR) process to other agencies, local councils and the Commonwealth
before it can be sold to the public.

General Government sector agency

A Victorian government agency listed as “general government” in the Financial Report for the State of
Victoria.

Greater Melbourne

Greater Melbourne comprises all local council areas that are not listed in Part 6 Appendix 4.

Land

The physical land and fixtures attached to the land, including all things that are a natural part of the land
such as trees and minerals and all things that are attached to land such as buildings and improvements
on the land. The term land includes the surface of the land (including land covered by water), and land
below the surface and the air above the surface.

Land transaction

Means the following:

• the sale of land,
• the sale of an interest in land,
• the purchase of land,
• the purchase of an interest in land,
• acquiring or granting a lease over land, and
• an offer of compensation under the Land Acquisition and Compensation Act 1986,
or Part 5 of the Planning and Environment Act 1987.

The terms ‘sale’ and ‘purchase’ have a special meaning under the policy and are defined below.

Land transaction requirements

The obligations agencies must comply with when undertaking land transactions. The land transaction
requirements are listed in Part 2.

Lease

A lease is an agreement under which the lessor gives the lessee an exclusive right to occupy land for a
specific term subject to the terms and conditions in the lease agreement.

Local council

Is a council as defined under the Local Government Act 2020.

Multi-stage EOI or tender

A multi-stage process involving an initial approach to market to identify parties who may be interested in,
and capable of, delivering an outcome on a parcel of land followed by one or more subsequent
approaches to interested parties who have shown they may be capable of delivering the outcome.

Person

Includes an entity and unincorporated body.

111 Victorian Government Land Transactions Policy

 Glossary and Abbreviations

Public auction

The public sale of a property, conducted by a licensed real estate agent acting as an auctioneer,
at a specific place, time and date after a public marketing campaign.

Public entity

A public entity as defined in section 5 of the Public Administration Act 2004.

Publicly listed sale

A method of sale used by a licensed real estate agent that involves publicly advertising land for
sale, and purchasers making their offers directly to a licenced real estate agent. This includes several
methods of sale commonly used by licensed real estate agents including sale set date, expression of
interest and private sale.  

Public non-financial corporation

A Victorian government agency listed as a ‘public non-financial corporation’ in the Financial Report for
the State of Victoria.

Public university

Is any one or more of the following:

• Deakin University as established under the Deakin University Act 2009
• Federation University Australia as established under the Federation University of Australia Act 2010
• La Trobe University as established under the La Trobe University Act 2009
• Monash University as established under the Monash University Act 2009
• RMIT University as established under the Royal Melbourne Institute of Technology Act 2010
• Swinburne University of Technology as established under the Swinburne University of Technology Act
2010
• The University of Melbourne as established under the University of Melbourne Act 2009
• Victoria University as established under the Victoria University Act 2010

Purchase

An arrangement under which a Victorian government agency agrees to receive a land transfer from
another party or an interest in land.

Regional Victoria

Any local council area listed in Part 6 Appendix 4

Responsible Minister

The Minister who owns the land or is responsible for the legislation providing authority for the land
transaction.

Sale

An arrangement under which a Victorian government agency agrees to transfer land to another party or
create an interest in land.

Victorian Government Land Transactions Policy 112

Glossary

Secretary

The department head appointed by the Minister and responsible to their Minister(s) for the management
of the department and advice on all matters related to the department and related administrative
offices.

Special bodies

A special body as defined in section 6 of the Public Administration Act 2004.

Statutory officer

The holder of a statutory office that owns land.

Tender

A method of selling land where offers are made by prospective purchasers and considered at a pre-
specified date by a licensed real estate agent or an evaluation panel.

Traditional Owner group

Has the same meaning as in section 3 of the Traditional Owner Settlement Act 2010.

Victorian government agency

A Victorian government agency is any of the following:

• Victorian government departments
• Victorian government administrative offices
• Victorian public statutory authorities
• Victorian government public entities
• Victorian government special bodies
• Any legal entity established by state legislation for the purpose of the state (including those
independent of government control, but does not include local councils)
• Companies in which the state has an interest, and
• Any organisation which requires statutory authorisation and/or ministerial approval, where public funds
are involved in the land transaction.

To avoid doubt, ‘Victorian government agencies’ does not include local councils or Commonwealth
government agencies.

113 Victorian Government Land Transactions Policy

 Glossary and Abbreviations

2. List of acronyms and abbreviations

ACHRIS Land Use Policy
Aboriginal Cultural Heritage Register Victorian Government Land Use Policy
and Information System and Guidelines

Agency LUWG
Victorian government agency Land Utilisation Working Group

ASIC PE Act
Australian Securities & Investments Commission Planning and Environment Act 1987

CHMP PESA
Cultural Heritage Management Plan Preliminary Environmental Site Assessment

DET PNFC
Department of Education and Training Public Non-financial Corporation

DELWP PSI
Department of Environment, Land, Preliminary Site Investigation
Water and Planning
SCLA Policy
DoJCS Victorian Government Strategic Crown
Department of Justice and Community Safety Land Assessment Policy and Guidelines

DSI Supreme Court

Detailed Site Investigation Supreme Court of Victoria

DTF TOS Act

Department of Treasury and Finance Traditional Owner Settlement Act 2010

EPA UXO
Environment Protection Authority Unexploded Ordnance

EP Act VCAT
Environment Protection Act 2017 Victorian Civil and Administrative Tribunal

EOI VGLM
Expression of Interest Victorian Government Land Monitor

ERC VGV
Expenditure Review Committee Valuer-General Victoria

FROR VHR
First Right of Refusal Victorian Heritage Register

GAIC VL Act
Growth Areas Infrastructure Contribution Valuation of Land Act 1960

GG VSP
General Government sector agency Valuation Services Panel

GST ROI
Goods and Services Tax Registration of Interest

LAC Act WIK

Land Acquisition and Compensation Act 1986 Work in Kind

Landholding Policy
Victorian Government Landholding
Policy and Guidelines

Victorian Government Land Transactions Policy 114

Part 6:
Appendices

115 Victorian Government Land Transactions Policy

 Appendices

1. O
 nline resources for general
due diligence
Before undertaking a land transaction an agency is required to conduct a range of general due diligence
activities. The table below lists some online resources to assist agencies meet this requirement.

What Where

Title and plan searches www.landata.vic.gov.au

Company search https://www.asic.gov.au

Zones and overlays https://mapshare.vic.gov.au/vicplan

Approved planning schemes www.planning.vic.gov.au/schemes-and-

amendments/browse-planning-schemes

Planning scheme changes for government land www.planning.vic.gov.au/policy-and-strategy/

government-land-planning-service

Unexploded ordinance (UXO) mapping application www.whereisuxo.org.au

Native Vegetation Information Management https://nvim.delwp.vic.gov.au/map

System

Heritage places and objects and historical www.heritage.vic.gov.au

archaeological sites

Aboriginal Cultural Heritage Register and achris.vic.gov.au/#/onlinemap

Information System

Aboriginal heritage planning tool www.aav.nrms.net.au

Building safety www.vba.vic.gov.au

Combustible cladding https://www.vic.gov.au/cladding-safety

Victorian Government Land Transactions Policy 116

Victorian Government Land Transactions Policy

117 Victorian Government Land Transactions Policy

 Appendices

2. O
 nline resources for contamination
due diligence
Before undertaking a land transaction, agencies are required to conduct an initial review to assess the
potential for contamination to be present on the land. This includes a review of relevant online resources. The
table below lists a range of online and mapping and spatial resources to assist agencies identify the past and
present use of the site and surrounding land uses.

What Where

Aerial and satellite images Google Maps ™, Google Earth ™, Nearmap ™,

Current local planning schemes and provisions Browse planning schemes at: https://www.
planning.vic.gov.au/schemes-and-amendments/
browse-planning-schemes

Historic planning schemes and Environmental Search VicPlan maps:

Audit Overlays
https://mapshare.vic.gov.au/vicplan/

Potentially contaminating past and present Search Victoria Unearthed:

use of the site and surrounding land uses.
https://mapshare.vic.gov.au/victoriaunearthed

EPA environmental audits and EPA Priority Sites Search Victoria Unearthed:
Register
https://mapshare.vic.gov.au/VictoriaUnearthed/

Historical aerial images Browse:

https://services.land.vic.gov.au/DELWPmaps/
historical-photomaps/ or https://www.landata.vic.
gov.au/tpc_menu.aspx

EPA licenced sites Search for a licence:

https://www.epa.vic.gov.au/for-business/find-a-
topic/licences-works-approvals/search-for-
licence

EPA notice sites Search for a notice:

https://www.epa.vic.gov.au/about-epa/what-we-
do/compliance-and-enforcement/1970-act/
remedial-notices-and-directions

Victorian Government Land Transactions Policy 118

List of potentially contaminating land uses

3. L
 ist of potentially
contaminating land uses
Before undertaking a land transaction, agencies are required to conduct an initial review to
assess the potential for contamination to be present on the land. To assist agencies conduct an
initial review, the table below provides a list of activities that are often considered to be a
potential cause of land contamination. This list is not exhaustive, and agencies should consider
all the relevant information in assessing the potential for contamination to be present.

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 Appendices

High potential for contamination Medium potential for contamination

• Abattoir • Gasworks Ancillary Use activities

• Abrasive blasting • Glass manufacture
In some cases, while the land use onsite may
• Airport • Iron and steel works be benign, an ancillary land use or even a
• Asbestos production/ • Landfill sites/waste one-off activity or event has the potential to
disposal depots cause contamination. Examples include:
• Asphalt manufacturing • Lime works • Above ground storage of chemicals or fuels
• Automotive repair/ • Materials recycling (where such storage is ancillary to the
engine works and transfer stations primary site activities but is not minor)
• Battery • Mass animal burial • Waste disposal such as illegal dumping
manufacturing/ on agricultural sites • Stockpiles of imported fill
recycling • Metal coating/
• Bitumen electroplating Adjacent contaminating activity
manufacturing • Metal finishing and For the activities listed below, potential for
• Boat building/ treatments contamination from adjoining land, and, if
maintenance • Metal smelting/refining/ there is reason to suspect further offsite
• Breweries/distilling finishing contamination, other nearby land, should be
• Brickworks • Mining and extractive considered.
• Cement manufacture industries • Automotive repair/engine works
• Ceramic works • Oil or gas production/ • Bitumen manufacturing
refining • Chemical Manufacturing/storage/blending
• Chemical
manufacturing/ • Pest control depots • Council works depot
storage/blending • Printing shops • Gasworks
• Chemical treatment/ • Pulp or paper works • Defence works
destruction facilities • Railway yards • Dry cleaning
• Coke works • Scrap metal recovery • Electrical/ electrical components
• Compost • Service stations/fuel manufacturer
manufacturing storage • Electroplating
• Concrete batching • Sewage treatment • Landfill
• Council works depot plant
• Service station
• Defence works • Ship building/breaking
• Fuel storage depot
• Drum re-conditioning yards
• Tannery
facility • Shipping facilities- bulk
(rate <100 t/day) • Underground storage tanks
• Dry cleaning
• Electrical/electrical • Shooting or gun clubs Agriculture and animal production
components • Stock dipping sites
manufacture • Tannery (and While most agricultural land is not likely to be
• Electricity generation/ associated trades) contaminated, the potential for specific
power station contaminating activities to have occurred over
• Textile operations time should be considered, including:
• Electroplating • Timber preserving/ • Commercial use of pesticides (including
• Explosives industry treatment herbicides, fungicides etc)
• Fertiliser manufacture • Tyre manufacturing • Biosolids application to land
or storage • Underground storage • Farm waste disposal
• Fill sites tanks
• Firefighting or training • Utility depots See also activities in the ‘high’ category
(use of foams) • Waste treatment/
• Foundry incineration/disposal
• Fuel storage depot • Wool scouring

Victorian Government Land Transactions Policy 120

Definition of regional Victoria

4. Definition of regional Victoria

The threshold for VGLM approval for leasing transactions is different depending on whether the land is
located in greater Melbourne or regional Victoria. The table below lists the local council areas that are in
‘regional Victoria’ for the purposes of the policy. If the land is not in one of these local council areas, it is in
greater Melbourne for the purposes of the VGLM approval requirement.

Local council areas in regional Victoria

• Alpine Shire • Corangamite • Horsham Rural • Mount • Surf Coast

Council Shire Council City Council Alexander Shire Shire Council
• Ararat Rural • East Gippsland • Indigo Shire Council • Swan Hill Rural
City Council Shire Council Council • Moyne Shire City Council
• Ballarat City • Gannawarra • Latrobe City Council • Towong Shire
Council Shire Council Council • Murrindindi Council
• Bass Coast • Glenelg Shire • Loddon Shire Shire Council • Wangaratta
Shire Council Council Council • Northern Rural City
• Baw Baw Shire • Golden Plains • Macedon Grampians Council
Council Shire Council Ranges Shire Shire Council • Warrnambool
• Benalla Rural • Greater Council • Pyrenees Shire City Council
City Council Bendigo City • Mansfield Shire Council • Wellington Shire
• Buloke Shire Council Council • Borough of Council
Council • Greater • Mildura Rural Queenscliffe • West Wimmera
• Campaspe Geelong City City Council • South Shire Council
Shire Council Council • Mitchell Shire Gippsland Shire • Wodonga City
• Greater Council Council Council
• Central
Goldfields Shire Shepparton • Moira Shire • Southern • Yarriambiack
Council City Council Council Grampians Shire Council
• Hepburn Shire Shire Council
• Colac Otway • Moorabool
Shire Council Council Shire Council • Strathbogie
• Hindmarsh Shire Council
Shire Council

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Victorian Government Land Transactions Policy 122

delwp.vic.gov.au