Who is affected?
Owners of properties that have been vacant for more than 6 months in any given Calendar year. For the 2024 Calendar year, only properties in inner Melbourne suburbs are caught, but from 1 January 2025 this is going to be extended to all Victorian properties.
What do I need to do if I own vacant property?
You are required to lodge a vacant residential land tax (VRLT) notification with the State Revenue Office (SRO). The due date for lodgement is the 15th of January 2025 and is done through the SRO’s online system (see link at the bottom of this newsletter).
Are holiday homes caught?
In short, yes.
However, holiday homes that have been occupied by the owner for at least 4 weeks in the year may be eligible for an exemption from this additional tax. Owners can apply for this exemption together with their vacant residential land tax notification online.
If I have vacant property, and I do not qualify for any exemptions, how much is this additional tax?
The rate of VRLT is based on the number of consecutive tax years the land has been liable for VRLT and is:
- 1% of the Capital Improved Value (CIV) of the land for the first year the land is liable for VRLT where the land was not liable for VRLT in the preceding tax year
- 2% of the CIV of the land where the land is liable for VRLT for a second consecutive year
- 3% of the CIV of the land where the land is liable for VRLT for a third consecutive year.
As usual, if you want to discuss any of the above further, please do not hesitate to contact your usual HMH advisor.
SRO Links
https://www.sro.vic.gov.au/vacant-residential-land-tax
https://www.sro.vic.gov.au/vacant-residential-land-tax/frequently-asked-questions