From 1 January 2025, Vacant Residential Land Tax will apply to residential properties across Victoria if they have been vacant for more than six months in the preceding calendar year.
For the first time, this now includes holiday homes in Victoria. Applications for exemption to this tax, where applicable, must be made to the SRO by 15th January 2025.
What does this mean?
This means that if you own residential property in Victoria that is vacant for more than 6 months in the 2024 calendar year, you may be liable for Vacant Residential Land Tax in 2025. This tax is calculated on the Capital Improved Value (CIV) of the property, not just its calculated land value.
The Vacant Residential Land Tax rates are as follows:
| No. years the residential property is vacant | Vacant Residential Land Tax rates (%) on CIV |
| 1 year | 1.0% |
| 2nd consecutive year | 2.0% |
| 3rd consecutive year | 3.0% |
What does ‘Vacant’ mean?
A property is considered vacant if, for more than 6 months in the preceding calendar year, it has not been lived in by:
- the owner or the owner’s permitted occupant, as their principal place of residence (PPR), or
- a person under a lease or short-term letting arrangement.
What about my holiday home?
Your holiday home may be exempt if the property is a holiday home used for at least four weeks of the year by family and your principal place of residence is in Australia. In this scenario, you may be exempt from Vacant Residential Land Tax, however, please reach out to discuss this with your advisor.
It is important to note that this exemption can only apply to one holiday home.
You must notify the SRO of this exemption by 15th January 2025.
What if my holiday home is owned by a Trust or Company?
Holiday homes owned by a Trust or Company must meet additional criteria for eligibility. The entity must have owned the property as of 28 November 2023 to be eligible for the exemption.
What exemptions may apply?
The following exemptions may apply:
- Holiday homes in specific circumstances, or
- Ownership of the property changed during that year, or
- The property became a ‘residential property’ during that year, or
- The property became a ‘residential property’ during the previous two calendar years and ownership is unchanged, or
- The owner occupied the property for at least 140 days of that year to attend their workplace or business and the owner has a PPR in Australia. Homes owned by companies, associations, or organisations are generally not eligible for this exemption.
Which properties are excluded?
- Unimproved land i.e. land without a residential premises, or
- Commercial residential premises, or
- Residential care facilities, supported residential services or retirement villages.
How to submit the nomination form for the exemption
If your property has been vacant for more than 6 months and you believe you are exempt in the calendar year ending 31 December 2024, you are required to notify the Victorian State Revenue Office (SRO) by the 15th of January 2025. You can apply for an exemption directly via the SRO online portal: Vacant residential land tax | State Revenue Office
Please contact your local William Buck Property advisor for assistance preparing for these changes.
