Vacant Land Tax

Vacant Land Tax Victoria. Coming January 2025.

Victorian Vacant Residential Land Tax (VRLT). What you need to know.

Starting 1 January 2025, the VRLT will apply to all vacant residential land and properties across Victoria, not just properties in Melbourne’s inner and middle suburbs.

A property is considered “vacant” if it remains unoccupied for more than six months in a calendar year
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​Several exemptions to this general rule apply:

  1. ​Holiday Home Exemption
    Owners of holiday homes may qualify for an exemption from VRLT under specific conditions:

The holiday home must be occupied for at least four weeks per year.
The owner must have a principal place of residence (PPR) elsewhere in Australia.

From 2025, additional criteria apply for holiday homes owned through companies or trusts: at least 50% ownership must be held by individuals with a PPR in Australia.
This exemption is designed to apply to genuinely used holiday homes, rather than those held purely for investment or under utilisation​

  1. Properties Recently Acquired: Exempt in the first calendar year of ownership.
  2. Residences for Work or Business: If the property is kept for work/business needs.
  3. New Developments: Vacant land undergoing significant development or where construction completion is in progress may qualify for exemptions.

Tax Rates
The VRLT rate remains at 1% of the property’s Capital Improved Value (CIV).

However, a progressive rate structure will begin from 2025:

  • 1% for properties vacant for one year,
  • 2% if vacant for two consecutive years,
  • 3% if vacant for three consecutive years or more​

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Unimproved Residential Land Provisions (2026)
From 1 January 2026, VRLT will also cover unimproved residential land in metropolitan Melbourne, targeting land that has remained undeveloped for five or more years. This includes vacant lots suitable for residential development but without any structures​.

​Notification Requirements
All owners of residential properties liable for VRLT must self-report by 15 January of each year if their property has been vacant, as non-compliance may result in penalties​.

Self reporting needs to be done by the property owner via the Victorian State Revenue Office  My Land Tax account – this is where you would generally pay land tax instalments, make payment arrangements and receive invoices.  https://www.sro.vic.gov.au/my-land-tax

PRA Clients, PLEASE NOTE:  We are unable to lodge these returns on your behalf.

Do you need assistance?

If you are unsure if your property falls under this new tax or if you are required to self report, please make contact with your Accountant.