With the year ending, property owners across Victoria must act quickly to assess the occupancy status of their residential properties. Properties vacant for more than six months in 2024 may attract Vacant Residential Land Tax (VRLT)—and failing to act could result in unnecessary costs. However, exemptions are available that could reduce your liability. For instance, properties used as holiday homes may qualify for an exemption if they have been occupied for at least four weeks during the year—an opportunity worth exploring before the calendar year closes.
This article explains VRLT, who it applies to, and the steps you can take to ensure compliance before the 15 January deadline.
What is VRLT and Does it Apply to You?
VRLT is an annual tax applied to residential properties that remain vacant for more than six months in a calendar year. It is separate from land tax and other surcharges.
A property is considered vacant if it has not been:
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Lived in by the owner or a permitted occupant as their principal place of residence (PPR)
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Occupied under a bona fide lease or short-term letting agreement made in good faith
Important Note: Sporadic or casual use—such as occasional visits by friends or family—does not count as occupancy. Simply listing the property for rent or as available on a short-term rental platform is not sufficient. To qualify, the property must be actively used and occupied for more than six months.
How VRLT is Calculated
VRLT is based on the Capital Improved Value (CIV) of a property, as shown on your council rates notice.
From 2025, progressive tax rates will apply for properties that remain vacant over multiple years:
•1% of the CIV in the first year the property is liable.
•2% in the second consecutive year.
•3% in the third and subsequent years of vacancy.
Exemptions You Should Know About
Certain properties are exempt from VRLT, including:
• Properties under construction or renovation: Homes undergoing significant renovations or construction are exempt for up to two years from the date the building permit was issued
• Holiday homes: If the property was used as a holiday home for at least four weeks (whether continuous or aggregate) during the year, it may qualify for an exemption
• Newly acquired or developed properties: Properties purchased or developed during the year are generally exempt
• Work accommodation: If the property was used for work purposes for at least 140 days during the year, provided the owner has an Australian PPR. From 2025, this applies only to work within Victoria.
Example: How VRLT Could Apply
Four Oaks in Shepparton was unoccupied in the 2023 and 2024 calendar years. It will not be assessed for VRLT in 2024 (based on 2023 occupancy) as VRLT did not apply to regional properties until 2025. As Four Oaks was vacant in 2024, it will be assessed for VRLT at 1% in 2025 (based on 2024 vacancy) and 2% in 2026 if it remained unoccupied throughout 2025. If it continues to remain vacant in 2026, it will attract VRLT at 3% in 2027.
The owner of Four Oaks is required to make a notification in the portal by 15 January 2025 and 2026 advising that Four Oaks was vacant for 6 months or more in 2024 and 2025. Failing to make a notification may result in an assessment being issued with penalty.
Steps to Take Before 15 January 2025
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Assess Your Property’s Occupancy and Take Action Where Possible:
Evaluate whether your property was occupied for at least six months during 2024. If it wasn’t, consider whether you can take steps now to meet exemption criteria, such as ensuring a holiday home is used for the required four weeks.
- Notify the State Revenue Office (SRO):
Use the SRO’s online portal to notify them if your property was vacant for more than 6 months in 2024. This is a mandatory requirement, and failing to do so can result in penalties. The portal allows you to:
• Declare your property’s status
• Claim exemptions
• Update contact information
Click here to read more about exemptions and your obligations
Taking action now to review your property’s status, understand your obligations, and notify the SRO can help you avoid unnecessary tax liabilities and penalties. Don’t leave it too late—prepare for VRLT compliance today.
