Understanding the Victorian Vacant Residential Land Tax: Three key questions to answer
Not sure if this applies to you? Let’s answer three essential questions:
- Do you own a Victorian property that is not your principal place of residence?
- Do you, or should you, pay land tax on that property?
- Was that property occupied for less than 6 months in 2024?
If you answered "yes" to all three, you could be liable for VRLT in addition to regular land tax. Here's what you need to know.
What is the Vacant Residential Land Tax (VRLT)?
The VRLT is a tax on vacant residential properties that from 1 January 2025 will apply to ALL of Victoria. Properties that are vacant for 6 months or more during the previous calendar year may be subject to the tax. Taking 2025 as an example, this means that if your property was unoccupied for more than 6 months in 2024 calendar year, VRLT may apply. If VRLT does apply it be issued with other land tax assessments in early 2025.
The key dates to remember are:
- 31st December 2024 - the VRLT is levied on whoever owns the property on this date.
- 15 January 2025 - Notifications must be made to the Victorian State Revenue Office (SRO) on or before this date. Failing to notify the SRO on time could result in penalties.
- 2024 calendar year - Occupancy during 2024 determines whether VRLT applies.
How is the VRLT calculated?
The tax rate for VRLT depends on how long the property has been vacant:
- 1% of the property’s Capital Improved Value (CIV) in the first year
- 2% in the second year
- 3% in each subsequent year
The Capital Improved Value is the government’s assessment of the property’s market value. As that will usually be significantly higher than the site value, especially for apartments, the VRLT will often be substantially higher than regular land tax.
VRLT assessments will issue alongside regular land tax assessments during early 2025.
Are there any exemptions?
Some properties may be exempt from VRLT, but the exemptions are specific, and properties owned by trusts or companies have particularly limited access to them. Common exemptions include:
- Holiday homes: If the property was used as a holiday home and occupied by the owner for at least 4 weeks during 2024, and the owner’s principal residence is elsewhere in Australia, it may qualify for an exemption. Keeping a logbook of occupancy dates is crucial.
- Work-related occupancy: If the property was used for work purposes and occupied by the owner for at least 140 days in 2024, it may be exempt.
- Property sale: If ownership changed and the sale was settled during 2024, an exemption may apply.
- Renovations or unsafe conditions: Special rules may apply if the property was undergoing substantial renovations or was unfit for occupancy.
What you need to do:
- Make the notification: Notify the SRO if your property was vacant for more than 6 months in 2024. This must be done via the SRO's online VRLT portal by 15th January 2025 - start now.
- Apply for an exemption: If you believe your property qualifies for an exemption, you must apply for it when making your notification - start now.
- Be timely: Failure to notify on time may result in penalties.
Seek professional guidance
The VRLT rules can be complex, and many practical questions remain. For assistance understanding your obligations or navigating the SRO’s online portal, please contact your usual Forvis Mazars advisor or one of our specialists below:
| Brisbane – Jamie Towers | Melbourne – Michael Jones | Sydney – Stephen Baxter |
| +61 7 3218 3900 | +61 3 9252 0800 | +61 2 9922 1166 |
Author: Michael Jones
Date published: 23/10/2024
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.
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