Direction 4.2.5 — Landholding Accountability

Summary

Newest direction in the Standing Directions, added October 2025. The Responsible Body must ensure the Agency applies the Victorian Government Landholding Policy and Guidelines (October 2025, approved 7 October 2025), published by the Department of Transport and Planning. The Policy contains 11 mandatory Compliance Directives covering land categorisation, annual reporting, surplus declaration, disposal coordination, LCG notification, Cabinet submission requirements, and return of sale proceeds.

Legislative basis: FMA Part 7B (s54N–54P) empowers the Minister to issue directions about the acquisition, leasing, and licensing of land by departments and public bodies.

The 11 Compliance Directives

The Policy (Table 3 and Guideline sections 2–8) establishes 11 mandatory directives:

Categorisation and Retention (Directives 1, 3, 5)

Directive 1: Agencies must only hold land where it is justified by one of six Categories. Each Category has specific criteria, consultation requirements (LCG), and approval requirements (Landholding Minister, in some cases Minister for Environment).

Directive 3: Land that does not currently meet any Category must be declared surplus without delay. A surplus declaration cannot be reversed unless the Minister for Finance approves. Written approval is required from the legal landowner (freehold) or the Accountable Officer/responsible Minister (Crown land).

Directive 5: Where land is currently meeting a Category but it is confirmed the use will end in the future (e.g. new site approved, program sunsetting), agencies must proactively declare surplus immediately upon becoming aware.

Six Categories for Holding Land

1. Category 1 — Currently used for service delivery by the Agency
2. Category 2 — Held for future service delivery (must demonstrate service delivery contribution, cost-effectiveness, interim use arrangements; requires LCG consultation and Landholding Minister approval)
3. Category 3 — Crown land retained to protect public land values (requires Strategic Crown Land Assessment; Minister for Environment approval for retention)
4. Category 4 — Not needed for Agency service delivery but contributing to government-supported outcomes through use by another agency or community organisation
5. Category 5 — Not needed for service delivery but financially beneficial to the State to retain (negative market value, contamination, heritage buildings; assessed from State perspective not Agency)
6. Category 6 — Not needed for service delivery but retained to support other government objectives (e.g. Crown land subject to Traditional Owner Settlement Act 2010 negotiations)

Reporting (Directives 2, 7)

Directive 2: Agencies must submit an accurate Landholding Report to DTP by 30 June each year (or as otherwise requested by the Minister for Finance or LCG). Reports must be in Excel format, cover all landholdings owned or managed, and include data specified in Table 5 (location, size, ownership status, contact details, value, planning details, Category, lease/licence details, physical site conditions).

Directive 7: Agencies exempted from Directive 6 (central sale coordination) must report their completed and planned land sales to DTP by 1 February and 1 September each year.

Disposal Coordination (Directives 4, 6)

Directive 4: Before repurposing land after the previous use has ended, agencies must consult the LCG and obtain relevant approvals. The LCG provides feedback on alternative government uses, co-location opportunities, and consistency with landholding Categories.

Directive 6: Surplus land must be referred to DTP Landholding and Sales to facilitate sale, unless an exemption applies. Exempted agencies: Universities, Homes Victoria, Development Victoria, Melbourne Water, Trust for Nature, VicTrack, DEECA (Crown land under $250K). DTP coordinates Strategic Crown Land Assessments, First Right of Refusal (FROR), valuations, and settlement.

Notification (Directive 8)

Directive 8: Agencies must notify the LCG without delay of any land that is currently or expected to become surplus or underutilised. The LCG (established 2023, sits within DTP) coordinates land functions and supports significant projects across departments. Triggers include: land declared surplus, land not meeting a Category but not yet declared surplus, current use ceasing in future, or Agency wishes to repurpose land.

Cabinet Submissions (Directives 9, 10)

Directive 9: Cabinet submissions and funding proposals must include details of any land to be acquired — cost estimates based on VGV valuations, site identification status, Native Title/Traditional Owner considerations, and contingency for value increases.

Directive 10: Submissions must also identify land that will become surplus as a result of the proposal being approved, including estimated sale proceeds as an offset in the Capital funding section.

Proceeds (Directive 11)

Directive 11: Net proceeds of all government land sales (gross proceeds less sale costs) must be returned to the Consolidated Fund after settlement. Six categories of exemption: (a) standing legislative exemption; (b) universities (freehold title); (c) Cabinet-approved retention; (d) Treasurer general exemption under FMA s29; (e) Treasurer PNFC exemption; (f) Minister for Finance exemption (philanthropy/bequest property, or land being replaced).

First Right of Refusal (FROR) Process

Before surplus land is sold, agencies must give notice to other Victorian Government agencies, the Commonwealth Government, the relevant local government authority (LGA), and the Registered Aboriginal Party (RAP) for the area. These parties have 60 days to express interest, then 30 days to negotiate terms. The FROR process is managed by DTP Land and Property via GovMap. LGAs may acquire land for community purposes at below market value with Minister for Finance approval. Standing exemptions from FROR apply to certain Homes Victoria and Development Victoria sales.

Key Roles

• DTP Land and Property — administers the Policy, coordinates central land sales, manages FROR via GovMap
• Land Coordinator General (LCG) — established 2023 within DTP; single entry point for cross-government land coordination, reviews landholding reports, advises on Category approvals
• Valuer-General Victoria (VGV) — provides valuations and estimates for land transactions
• Landholding Minister — the Minister who owns or is responsible for the agency/land; approves land retention under certain Categories
• Minister for Finance — approves the Guidelines, approves reversal of surplus declarations, approves exemptions
• Minister for Environment — approves retention of Crown land for public land values (Category 3)

Exemptions

Cabinet or a committee of Cabinet may approve an exemption to any or all Policy requirements. Universities are exempted from the Guideline Directives but must comply with the Policy itself (including FROR). Other exemptions are specific to individual Directives (data reporting, Directive 6 central sale, Directive 11 proceeds return, FROR).

Context

• Added October 2025 — the most recent addition to the Standing Directions
• Separate from general asset management (AMAF under SD 4.2.3) and construction procurement (PDCMA under SD 4.2.4)
• Land is an asset class, so entities holding land face both AMAF and Landholding Policy obligations
• Related policies: Victorian Government Land Transactions Policy (governs sale process), Strategic Crown Land Assessment Policy (Category 3)