Thinking | 8 January 2018

Victorian land tax absentee owner surcharge and new Vacant Residential Land Tax

If you or any of your clients own Victorian land and either the land tax absentee owner surcharge and/or the new Vacant Residential Land Tax taxes apply, you or your clients will need to notify the State Revenue Office of Victoria (SRO) by 15 January 2018 through the SRO’s online portal.

Victorian land tax absentee owner surcharge

The absentee owner surcharge will apply to Victorian land for a land tax year if you or your client were an “absentee owner” (a natural person absentee, absentee corporation or absentee trust) at 31 December of the preceding year. The absentee owner surcharge for the 2018 land tax year is 1.5 per cent of the land’s capital unimproved value, or “site value”, in addition to the general and trust surcharge rates of land tax.

New Vacant Residential Land Tax

The Vacant Residential Land Tax (VRLT) is a new, annual tax calculated on 1 per cent of the capital improved value of taxable land. This is different to land tax and the absentee owner surcharge.

The VRLT applies to homes in inner and middle Melbourne that were vacant for more than six months in the preceding calendar year, unless an exemption applies.

To assist with the transition to the VRLT, all properties are deemed to have been occupied for the period between 1 January and 30 April 2017. This means that a property should not be liable to the VRLT in 2018 if the owner or a permitted occupant has occupied the property for at least 2 months between 1 May and 31 December 2017.

If you have any queries in relation to the above taxes or how they may impact you or your clients, please do not hesitate to contact us.