Vacant Residential Land Tax Reminder: Victorian Residents Must Review Before February

If you own residential property in Victoria, now’s the time to review your position ahead of the Vacant Residential Land Tax (VRLT) notification deadline on 15 February 2026, for vacancy during the 2025 calendar year. 

The State Revenue Office (SRO) Victoria requires owners to self-assess whether their land meets the VRLT criteria and, if applicable, lodge a notification by 15 February 2026. 

Recent legislative changes mean VRLT now affects all residential land across Victoria (not just inner and middle Melbourne), and the tax rate is progressive from 2025. 

What is Vacant Residential Land Tax?

The Vacant Residential Land Tax is an annual tax applied to residential properties that are vacant for more than six months in the previous calendar year.

It’s designed to encourage landowners to make better use of existing housing stock and increase housing availability.

What’s Changed for 2025?

Until recently, the VRLT applied only to properties in inner and middle Melbourne. However, from 1 January 2025, the Victorian Government has expanded the tax to cover all residential land across the entire state.

This means holiday homes, regional investment properties, or city apartments that sit empty for more than six months could now fall within the taxable category.

Key Exemptions

Some land is automatically exempt because it’s exempt from land tax (e.g., your principal place of residence). Specific VRLT exemptions can also apply, including: 

• Holiday home exemption: Generally available where the owner (or eligible relative) uses and occupies the property as a holiday home for at least 4 weeks in the year, and the owner has an Australian principal place of residence. Certain companies and trusts can also qualify if strict conditions are met.
• Change of ownership during the year exempts the following year. 
• Under construction/renovation or uninhabitable: special rules apply.
• From 1 January 2026: Certain contiguous undeveloped land next to a PPR or holiday home can also be exempt if it enhances the main land and is used solely for private benefit. 

Note: Undeveloped residential land enters the VRLT regime from 1 January 2026 for metropolitan Melbourne only, at a flat 1% of CIV where it has been undeveloped for a continuous 5+ years. 

What You Need to Do

If you think your property might be affected:

1. Review your property’s use during 2025 (who lived there, and for how long).
2. Check exemptions relevant to your circumstances (holiday home, construction/renovation, change of ownership, etc.). 
3. Notify the SRO by 15 February 2026 if you’re liable, or to claim an exemption, using the online portal. 
4. Keep records (e.g., occupancy evidence) in case the SRO requests support. 
5. Need clarity? Contact your Aintree Group advisor if you need help assessing your obligations or lodging your declaration

Take Action

The VRLT can represent a significant annual cost, especially for properties held as investments or holiday homes. Failing to declare on time can also lead to penalties or interest charges.

With the expanded rules now applying statewide, many property owners who have never been affected before may be caught out.

If you’re unsure whether the Vacant Residential Land Tax applies to you, please reach out to your Aintree Group advisor or contact our office for tailored advice.

Don’t leave it too late. Review your situation now to avoid penalties or unexpected tax liabilities.

This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your accountant.