Tim Noonan
Audit Shield
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Tax
Vacant Residential Land Tax (VRLT) now Victoria wide
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 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 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:
| Number of consecutive years property is vacant | VRLT tax rate |
| 1 year | 1% of CIV |
| 2 years | 2% of CIV |
| 3 years | 3% of CIV |
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 year
Land that becomes residential land during the calendar year is not subject to VRLT in the following 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.
What do I need to do?
If you have vacant residential property during the 2024 calendar year, you will be required to notify the State Revenue Office (SRO) by 15 January 2025. This notification is required whether you are eligible for an exemption or not. You can submit your exemption eligibility within the notification. Failure to notify the SRO may result in penalties.
If you have any questions about VRLT and what it may mean for your property, please feel free to contact us.
