January 15 Notification Deadline for Vacant Victorian Residential Property Owners

January 15 is the notification deadline for two important taxes on vacant Victorian residential property – the absentee ownership surcharge and the vacant residential land tax.

Absentee ownership surcharge (AOS)

The AOS is a land tax surcharge that applies to vacant Victorian residential land owned by a foreign absentee owner. It does not apply to Australian citizens or permanent residents.

The AOS is being doubled by the Victorian government in 2024 in an attempt to address the current Victorian housing supply crisis. It can be applied to foreign absentee individuals, corporations or trusts that have ownership (including joint ownership) of Victorian residential land who are absent from Australia on 31 December of the previous calendar year, or who have been absent for more than six months of that year.

The AOS is levied on the total value of Victorian land owned by the absentee owner. If you were an absentee owner of Victorian land on 31 December 2023 or absent for more than 6 months during that calendar year, then you have until 15 January 2024 to notify the State Revenue Office. If you don’t, you may be subject to additional charges or penalties.

It’s important to remember that the AOS is in addition to standard land tax rates, which have also risen in 2024. The table below [JC1] outlines the total land tax payable in 2024 including the AOS for individual owners for a range of Victorian land values.

Land valueAOS in 2024
$100,000 to $300,000$4,975 plus $4% of the value over $100,000
$300,000 to $600,000$13,350 plus 4.3% of the value over $300,000
$600,000 to $1,000,000$26,250 plus 4.6% of the value over $600,000
$1,000,000 to $1,800,000$44,650 plus 4.9% of the amount over $1,000,000
$1,800,000 to $3,000,000$83,850 plus 5.65% of the value over $1,800,000
Over $3,000,000$151,650 plus 6.65% of the value over $3,000,000

Source: https://www.sro.vic.gov.au/rates-taxes-duties-and-levies/land-tax-current-rates

Vacant residential land tax (VRLT)

The VRLT is a tax on any Victorian property within inner and middle Melbourne suburbs that has been vacant for more than six months in the preceding calendar year, regardless of whether it is owned by an Australian citizen, permanent resident, or is foreign-owned.  Once again, the intention of this tax is to discourage voluntary property vacancies during the current Victorian housing supply crisis.

Vacant in the VRLT context means that the property has not been rented to tenants under a formal lease agreement or used as the owner’s principal place of residence for longer than six months in the previous calendar year. Significantly, the vacancy doesn’t need to be for a continuous six-month period.

If you own a property that will be subject to VRLT for the 2023 calendar year, then you must also notify the State Revenue Office by January 15, otherwise additional charges or penalties may apply.

The VRLT rate is 1% of the current capital improved value of the taxable land. In other words, it includes a valuation of both the land and any residential home that is built on it. The capital improved value of your property will be shown on your most recent council rates notice.

The table below shows the amount of VRLT payable for a range of capital improved Victorian property values. It’s important to understand that VRLT is in addition to standard land tax and any absentee owner surcharge that may be payable on the property.

Capital improved valueVRLT
Over $1,500,0001% of the capital improved value

This content has been prepared by Wilson Pateras to further our commitment to proactive services and advice for our clients, by providing current information and events. Any advice is of a general nature only and does not take into account your personal objectives or financial situation. Before making any decision, you should consider your particular circumstances and whether the information is suitable to your needs including by seeking professional advice. You should also read any relevant disclosure documents. Whilst every effort has been made to verify the accuracy of this information, Wilson Pateras, its officers, employees and agents disclaim all liability, to the extent permissible by law, for any error, inaccuracy in, or omission from, the information contained above including any loss or damage suffered by any person directly or indirectly through relying on this information. Liability limited by a scheme approved under Professional Standards Legislation.

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