Vacant residential land tax
The introduction of a tax on vacant residential properties known as the vacancy tax, is a tax on residential properties in Melbourne’s inner and middle suburbs which are unoccupied for more than six months a year.
The tax applies from 1 January 2018 as is based on use and occupation in the preceding year.
Who does the tax apply to?
The tax only applies to vacant residential properties located in Melbourne’s inner and middle suburbs. Vacant residential properties outside these suburbs are not subject to the tax.
A residential property is land capable of being used solely or primarily for residential purpose, such as a home or apartment.
The vacant residential land tax applies to properties in these local council areas:
Banyule, Bayside, Boroondara, Darebin, Glen Eira, Hobsons Bay, Manningham, Maribyrnong, Melbourne, Monash, Moonee Valley, Moreland, Port Phillip, Stonnington, Whitehorse and Yarra.
What is the vacant residential land tax?
If your property is vacant for six months or more, you may be subject to the vacancy tax.
The six-month timeframe does not need to be continuous. Provided a property was occupied for an aggregate of six months in the preceding calendar year, the tax does not apply for that tax year.
If the property is used and occupied as the principal place of residence of a family member or friend for more than six months in a calendar year, the property is not considered vacant and is not subject to the tax.
However, if the property is only used intermittently or on a casual basis throughout the year, the property is considered vacant and liable for the tax unless a specific exemption applies or there is a bona fide lease or letting arrangement in place.
What do I need to do if I am subject to the vacancy tax?
Owners of vacant residential properties are required to notify the State Revenue Office by 15 January each year via an online portal.
Penalties apply for failing to notify the State Revenue Office.
Where can I get more information?
For more information please visit the State Revenue Office Victoria website