Vacant Residential Land Tax

​From 1 January 2018, a vacant residential land tax applies to homes in inner and middle Melbourne that were vacant for more than six months in the preceding calendar year.

This is a new Victorian tax, and is different to land tax, the absentee owner surcharge and the federal annual vacancy charge.

The vacant residential land tax is assessed by calendar year (1 January to 31 December) and the six months do not need to be continuous.

The Victorian Government has introduced this tax to help address the lack of housing supply in Victoria.

Quick Facts

What is meant by 'vacant'?

A property is considered vacant unless it was occupied for more than six months in the preceding calendar year by:

  • The owner, or the owner's permitted occupier, as their principal place of residence, or
  • A person under a lease or short-term letting arrangement.

The six months does not need to be continuous.

A principal place of residence is the home you occupy and where you primarily reside.

Does the tax apply to all residential properties in Victoria?

No. The tax only applies to vacant residential properties located in Melbourne's inner and middle suburbs.

Vacant homes in the following municipal council areas may be affected:

  • Banyule
  • Bayside
  • Boroondara
  • Darebin
  • Glen Eira
  • Hobsons Bay
  • Manningham
  • Maribyrnong
  • Melbourne
  • Monash
  • Moonnee Valley
  • Moreland
  • Port Phillip
  • Stonnington
  • Whitehorse
  • Yarra

How does the SRO know if I have vacant property?

The SRO conducts monitoring and compliance activities to ensure that vacant residences are being declared. Our compliance program includes comparing our data with that of other state and federal agencies, and conducting investigations.

How much is the tax and how is it calculated?

It is an annual tax of 1 per cent of the capital improved value (CIV) of taxable land. For example, if the taxable land has a CIV of $500,000, the tax is $5000.

The CIV of a property is the value of land and buildings as determined by the general valuation process, and is found on the owner's council rates notice.

You can read more about the tax on the State Revenue Office website here, or alternatively speak with your regular contact at Hamilton Morello.