Insights Library
Further Amendments to VRLT and Land Tax following State Budget
State Parliament has introduced the State Taxation Acts Amendment Bill 2024, proposing several changes to the application of a variety of state property taxes to deliver on a number of 2024–25 State Budget initiatives. The changes come just six months after the recent legislative amendments were made to Vacant Residential Land Tax (VRLT), Windfall Gains Tax and Land Tax as covered by our earlier update.
- Vacant Residential Land Tax – Extension of Holiday Home Exemption Criteria: The 2024–25 Budget amendment to the Land Tax Act 2005 extends the holiday home exemption from the vacant residential land tax to now also include homes owned by companies or trust trustees. This extension, effective from 28 November 2023, will allow the exemption to extend to shareholders, certain trust beneficiaries, and their relatives. The property must have been continuously owned by the same entity since 28 November 2023, with no change in ownership except for transfers between relatives. This expanded exemption starts on 1 January 2025 for the land tax year of 2025 and onwards.Starting from 1 January 2026, the vacant residential land tax (VRLT) will be imposed on “undeveloped residential land in metropolitan Melbourne that has not been developed for over 5 years”. However, an amendment to the Land Tax Act 2005 ensures that if such land is contiguous to a holiday home that is exempt from VRLT, it will also be exempt. This amendment aims to prevent inconsistent tax treatment between holiday homes and adjacent land that enhances their use. The change is part of the State Taxation Acts and Other Acts Amendment Act 2023 and aligns with the broader application of VRLT.
- Land tax exemption for social and emergency housing: The 2024–25 Budget includes an amendment to the Land Tax Act 2005, introducing an exemption for social and emergency housing. This exemption applies to:
- Housing owned by a charitable institution, participating registered agency or public statutory authority (housing providers);
- Privately-owned housing managed by a housing provider; or
- Vacant land designated by a charity for future social or emergency housing use within 2 years (or such longer period on application).The exemption is only available on application and can be allocated to only part of the land as it aims to reduce costs for landowners dedicated to social and emergency housing. It will take effect from 1 January 2025 for the land tax year of 2025 and beyond.
Our Property Law team are available to help you navigate the proposed legislative amendments; to proactively implement strategies and advise on the availability of these exemptions including preparing applications to the State Revenue Office.
Please reach out to discuss any aspect if it may be relevant to your circumstances.
