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Attention Owners of Vacant Residential Properties! – More Taxes payable! Vacant Residential Land Tax

The Vacant Residential Property Tax is the first of its kind in Australia and commences on 1 January 2018. It is intended to encourage owners to make their property available for rent or purchase. It is in addition to the annual land tax that may be payable.

Consider this:

  1. Do you own a residential property?
  2. Has it been vacant for more than 6 months (aggregated) in the last calendar year?
  3. Is any of the vacant residential property located in the following council areas:
  • Banyule
  • Glen Eira
  • Melbourne
  • Port Phillip
  • Bayside
  • Hobsons Bay
  • Monash
  • Stonnington
  • Boroondara
  • Manningham
  • Moonee Valley
  • Whitehorse
  • Darebin
  • Maribyrnong
  • Moreland
  • Yarra

If you answered “yes” to all three questions above, you may be subject to Vacant Residential Land Tax.

However, some exemptions apply.

Have you met your obligations to notify the State Revenue Office (SRO) that you have a vacant residential property by 15 January 2018?

You have a positive obligation to notify the State Revenue Office even if you believe an exemption may apply.

How much is the Vacant Residential Land Tax?

It is 1% of the capital improved value (CIV) of the property. You can find out the CIV on your latest council rates notice.

So if your property has a CIV of $1,000,000.00. The Vacant Residential Land Tax is $10,000.00 per annum.

Transition to the Vacant Residential Land Tax (VRLT)

To assist with the transition to the VRLT, all properties are deemed to have been occupied for the period between 1 January 2017 and 30 April 2017.

This means that if your property is occupied for less than two months between 1 May 2017 and 31 December 2017, you may be subject to the tax.

Notifying the State Revenue Office

You will need to notify the SRO by 15 January each year if you believe you are subject to and/or exempt from the VRLT.

Failure to Notify the State Revenue Office

If you have failed to notify the State Revenue Office by 15 January you may be subject to penalties under the Taxation Administration Act 1997 and should immediately notify the State Revenue Office.

What this means for Owners of a vacant residential property?

The following taxes form part of the annual costs of holding the vacant residential property:

  • Vacant Residential Land Tax on CIV;
  • Land Tax of 5% (additional land tax applies if the property is held on trust);
  • Absentee owner surcharge of 1.5%.

How can Burke & Associates Lawyers assist?

  • Where you have made a decision to dispose of your property, we will be able to assist in drafting of the Contract of Sale and Vendor’s Statement and with the conveyance of the property.
  • If you have failed to notify the SRO by the due date, we will be able to assist in notifying the State Revenue Office.
  • If you have any issues with the assessment, we would be able to assist in your application to object or vary the assessment.

Please do not hesitate to contact our Property & Development team should you have any queries.


Kristy Muhlhan


Kristy Muhlhan

Since 2014, she has been an owner and Principal of the firm and has mastered a broad range of essential commercial and business skills which go hand in hand with the work she does for...

Emma Dickens


Emma Dickens

Bachelor of Legal and Dispute studies
Emma joined us in 2018 and holds a Bachelor of Legal and Dispute studies. Emma is currently studying for her Advanced Diploma of Conveyancing.

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