Owners of property left vacant for more than six months in a year will be taxed in a push to make more homes available to people who need them, the Victorian Government announced this week.
Hundreds of properties in apartment towers have been identified as vacant for more than six months in a recent investigation, making them liable for vacant residential land tax (VRLT). The investigations aim to make better use of empty homes by encouraging owners to put them on the rental market to avoid paying the tax.
Across five buildings targeted, 177 properties were found liable for VRLT – resulting in 337 assessments covering the last five years. The investigation will now expand to another 13 apartment towers, as well as houses in the inner and middle suburbs of Melbourne, where the tax currently applies.
From 1 January 2025, however, the tax will be applied to homes across all of Victoria if they are vacant for more than six months in the preceding calendar year.
Then from 2026, the tax will apply to empty residential blocks in the inner and middle parts of Melbourne, discouraging land banking and incentivising owners to build more homes. An escalating rate of tax will apply, based on the number of consecutive years the land has been liable for VRLT.
Holiday homes are typically exempt from VLRT, and this exemption has been expanded to include properties held in trust or owned by companies.
