Vacant Residential Land Tax (VRLT) now Victoria wide

All owners of vacant residential land (as defined by the SRO) are required to submit a notification form to the SRO by Wednesday 15 January 2025. You are required to complete this form whether you are applying for an exemption or not. If your property is not considered to be vacant residential land, then you are not required to complete the notification.

You can also submit your exemption eligibility within the notification. Failure to notify the SRO may result in penalties.

To complete the vacant residential land tax notification please visit the SRO online portal.

What is it?
Vacant Residential Land Tax (VRLT) is additional to standard land tax and applies to residential property which has been considered vacant for the previous calendar year.

What’s new about it?
VRLT previously only applied to properties in specific Melbourne suburbs, however it is now applicable Victoria-wide from 1 January 2025.

What does vacant mean?
A property which has not been occupied for more than six months of the previous calendar year by the owner or tenant will be considered “vacant” and liable for VRLT. The use and occupation must be either as a principal place of residence or subject to a bona fide lease arrangement.

VRLT calculations

Unlike standard land tax, VRLT is based on the Capital Improved Value (CIV) of the property not the land value. VRLT is charged as follows:

What are the exemptions?
The main exemptions to VRLT are as follows:

Exemption 1 – Change of ownership
Properties that change ownership during a calendar year are exempt from VRLT in the following year.

Exemption 2 – The property becomes residential land during the calendar year
Land that becomes residential land during the calendar year is not subject to VRLT in the following calendar year. This includes, for example:
1. Commercial property that becomes residential property
2. Construction of a new home on vacant land

Exemption 3 – Holiday home exemption
In order to fulfill the holiday home exemption, the property needs to have been used/occupied by the owner (or a designated trust beneficiary or company shareholder) for a minimum of four weeks for the 2024 calendar year. This exemption can be complicated so if you are looking to apply for it we recommend speaking to us first.

If you have any questions about VRLT and what it may mean for your property, please feel free to contact us.

Last updated 09/12/2024