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How To Manage The Victorian Vacant Residential Land Tax?

By November 24, 2023 No Comments
How To Manage The Victorian Vacant Residential Land Tax?

If your residential property was vacant for more than 6 months in the preceding calendar year, you may be subject to Vacant Residential Land Tax.

Vacant residential land tax applies to homes in inner and middle Melbourne that were vacant for more than six months in the preceding calendar year. This tax is different to land tax, the absentee owner surcharge and the federal annual vacancy fee.  This annual tax is set at 1% of the capital improved value (CIV) of taxable land. For example, if a vacant home has a CIV of $500,000, the tax will be $5000.

The vacant residential land tax is assessed by calendar year (1 January to 31 December) and the six months of occupancy do not need to be continuous.

Do you have a property in these Melbourne council areas that you use for less than 6 months of the year?

  • Banyule
  • Bayside
  • Boroondara
  • Darebin
  • Glen Eira
  • Hobsons Bay
  • Manningham
  • Maribyrnong
  • Melbourne
  • Monash
  • Moonee Valley
  • Merri-bek (formerly Moreland)
  • Port Phillip
  • Stonnington
  • Whitehorse
  • Yarra

Air Design Australia is here to help!  With the flexibility of both short to mid-term rental bookings across multiple booking and leasing platforms, you can occupy the property when visiting and maximise your returns as a furnished rental when not in residence.

A property is considered vacant if, for more than six months in the preceding calendar year, it has not been lived in by:

  • the owner, or the owner’s permitted occupant, as their principal place of residence (PPR), or
  • a person under a lease or short-term letting arrangement made in good faith.

The occupation does not need to be by the same occupant or for a single continuous period, and a beneficiary of a discretionary trust can be a permitted occupant.

It is not enough that the property is available for occupation, such as by listing on a short-term rental website. It must actually have been used and occupied for more than six months.

For further information, please seek advice from your local tax professional and refer to The Victorian State Revenue Office



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