Soil condition is commonly assessed by using soil organic carbon (SOC) as an indicator; however, a large proportion of the world’s soils can contain charcoal, a biologically-inert form of organic carbon. We investigated whether the presence of charcoal in soil could lead to an inaccurate assessment of soil condition when using SOC as an indicator. We sampled topsoil in a south-east Australian catchment affected by severe fires in 2003. Samples (n =100) were analysed for two SOC fractions: (i) total SOC (t-SOC, loss on ignition), which included charcoal, and (ii) biologically-active SOC (a-SOC, persulphate-oxidation), which did not contain charcoal. Using novel (boosted regression trees) and traditional (linear regression) modelling methods we compared the relative importance of abiotic (slope, aspect, elevation and soil texture) and biotic (land use and vegetation structure) factors as predictors of t-SOC and a-SOC concentration. A major difference between the two response variables was less relative importance of land use as a predictor when using t-SOC as a response variable. Therefore, ignoring the presence of charcoal would have led to an under-estimation of the effect of land-use conversion on the biologically-available SOC fraction. The presence of charcoal has important ramifications for routine assessments of soil condition given that (i) SOC is a commonly used indicator and charcoal and biologically-active SOC differ in their effects on soil properties, (ii) fires historically occur on a large area of land, (iii) charcoal is a long-lasting consequence of fires and (iv) charcoal can account for a large proportion of SOC and yet be unnoticed during sample preparation.