By Jeremy Quah

3 January 2018

One of the new housing measures which were introduced with the Victorian Government's housing package in June 2017 was the introduction of the “Vacant Residential Land Tax” which has come into force as of 1 January 2018.

The purpose behind this tax was to address the Government’s concern about the number of properties being left vacant across Melbourne’s inner and middle suburbs. The tax applies to properties located in a select number of Melbourne’s inner and middle suburbs (Details of suburbs affected can be obtained from the State Revenue Office’s website).

The tax will be charged at a rate of 1 per cent of the capital improved value of taxable land and will be charged on any property which is unoccupied for more than six months a year. Whilst the tax applies from 1 January 2018, it will be based on use and occupation in the preceding year (ie. an owner’s tax liability for 2018 will be based on use and occupation in 2017).

A property will be considered vacant unless it was occupied for more than six months in the preceding year. Occupation needs to be by either:

(a) The owners, or the owner’s permitted occupier as their principal place of residence, or

(b) A person under a lease or short-term letting agreement.

Along with the usual exemptions which apply to standard land tax, exemptions to the vacant residential land tax also apply under certain conditions. This is where the properties are holiday homes, city apartments, homes or units used for work purposes, property transfers during the preceding year and new residential properties.

Significantly, it will be the owner’s responsibility to notify the State Revenue Office (SRO) of unoccupied houses through their online portal http://www.sro.vic.gov.au/vacantportal and or whether any exemptions apply to them. This must be done no later than 15 January each year. Penalties will apply if owners fail to notify the SRO.

The SRO will carry out monitoring and compliance activities to check whether owners are reporting appropriately. Third parties can also notify the SRO of any suspected non-compliance, via a “tip off” portal where third parties can notify the SRO if they suspect that properties are unoccupied.

Therefore if you are an owner of residential property, it is essential that you that you urgently consider whether the residential property is vacant land for the purposes of this new tax and notify the SRO accordingly.

 

Should you have any queries, please do not hesitate to contact a member of our Property Team.

Related Articles

View All
Property & Development / Developments

GST easy as 1-2-3

Here are the top three questions we get asked by clients when it comes to GST and property   1 Is GST payable when...
Read More
Property & Development / Real Estate Agents / Leasing & Lease Disputes

The Retail Leases Amendment Bill 2019: What do the proposed changes mean for landlords and tenants of retail premises?

The Retail Leases Act 2003 (the “Act”) as presently drafted is intended to provide certainty and fairness in retail...
Read More
Property & Development / Developments / Real Estate Agents

First Home Owners Guide: What You Need to Know

First Home Owners: there are many things for you to think about – what suburb you want to live in, what type of...
Read More
Property & Development / Real Estate Agents

URGENT LEGAL UPDATE – New Statements of Information just released

Tisher Liner FC Law were consulted by Consumer Affairs Victoria in respect to their review of Statements of...
Read More
Owners Corporation / Owners Corporations & Strata / Property & Development

Looking behind an Owners Corporation’s ‘special resolution’ to authorise legal proceedings

At an interlocutory hearing, the developer asked VCAT to dismiss the Owners Corporations’ proceedings on the basis...
Read More
Property & Development / Developments

Sale of Land Amendment Act: What You Need To Know

The Act implements key outcomes of the Consumer Property Law Review’s examination of the Sale of Land Act 1962 (Vic)...
Read More
Property & Development / Developments

The Sun Sets on Developer Rights

The new Sunset Provisions will give greater power to purchasers in off-the-plans contracts The amendments will...
Read More
Business Law / Property & Development / Developments

TLFC Law Triple Finalists in the Lawyers Weekly Australian Law Awards 2019

Celebrating its 19th year, the Australian Law Awards, in partnership with UNSW Law, is the pinnacle of award programs...
Read More
Construction / Property & Development / Construction

What Developers should look for in a Vendor Statement

The Vendor Statement in particular is often the starting point for a developer’s due diligence enquiries and it is...
Read More
Property & Development / Developments

Developers Beware: Stamp Duty Soon to be Payable on Development Agreements

Developers need to be aware of this Act as stamp duty will now, in most cases, be payable on what has been...
Read More
Commercial Contracts & Agreements / Leasing & Lease Disputes / Property & Development

Could you Be Contaminated?

Whether you are the purchaser of land, the seller, a landlord, a tenant, a developer or a lender, there are obligations...
Read More
Information Technology & Innovation / Developments / Business Law

Cyber Security and Protection from Cyber Fraud

Email communication is an inherent part of modern day business It is not uncommon to run an entire transaction online,...
Read More