Consider these three questions in the first instance:

1. Do you own a Victorian residential property that is not your principal place of residence?
2. Do you pay land tax on that property?
3. Was the property occupied for less than 6 months in 2024?

If you answered “yes” to all three, you might be liable for VRLT in addition to regular land tax. Here’s what you need to know:

What is the VRLT?

The VRLT is a tax on vacant residential properties, effective from 1 January 2025. Properties vacant for 6 months or more in the previous calendar year may be subject to this tax. For example, if your property was unoccupied for more than 6 months in 2024, VRLT may apply in 2025.

Key Dates:

• 31 December 2024: VRLT is levied on whoever owns the property on this date.
• 15 January 2025:  Deadline to notify the Victorian State Revenue Office (SRO) if your property was vacant for more than 6 months in 2024. Late notifications may incur penalties.

How is the Tax Calculated?

• 1% of the property’s Capital Improved Value (CIV) in the first year
• 2% in the second year
• 3% in each subsequent year

Exemptions:

Some properties may be exempt from VRLT, including:

• Holiday Homes: Used as a holiday home and occupied by the owner (and/or relative) for at least 4 weeks in 2024. (Tip: Keeping a logbook / guestbook of occupancy dates as an evidentiary document in case of audit).
• Work-Related Occupancy: Used for work purposes and occupied by the owner for at least 140 days in 2024.
• Property Sale: Ownership changed and the sale was settled during 2024.
• Renovations or Unsafe Conditions: Undergoing substantial renovations or unfit for occupancy.

What You Need to Do:

1. Notify the SRO: If your property was vacant for more than 6 months in 2024, notify the SRO via their online VRLT portal by 15 January 2025.
2. Apply for an Exemption: If you believe your property qualifies for an exemption, apply when making your notification.
3. Be Timely: Late notifications may result in penalties.

Seek Professional Guidance

The above summary is necessarily simplified. VRLT rules can be complex. If you have any further questions or need additional clarification, feel free to ask one of our specialists below:

Gregory Keady GKeady@apwpartners.com.au

Jeff Wain JWain@apwpartners.com.au

Alistair Bett ABett@apwpartners.com.au