1% · 2% · 3% No threshold
Vacant Residential Land Tax — Victoria
Victoria taxes residential land that is left empty, at a rate that climbs the longer it stays empty: 1% of capital improved value in the first year, 2% in the second, and 3% from the third year on. There is no threshold — this is a separate tax from land tax, and a property below the land tax threshold can still attract it.
The rate, and what it comes to
| How long the land has been liable | Rate |
|---|---|
| One year | 1% of capital improved value |
| Two years | 2% of capital improved value |
| Three or more years | 3% of capital improved value |
The SRO publishes the rate against consecutive years the land has been liable for VRLT — so the rate you pay depends on how long the property has been caught, not on how long you have owned it. Before 2025 the rate was 1% for every property, whatever the year.
| Capital improved value | One year | Two years | Three or more years |
|---|---|---|---|
| $400,000 | $4,000 | $8,000 | $12,000 |
| $600,000 | $6,000 | $12,000 | $18,000 |
| $800,000 | $8,000 | $16,000 | $24,000 |
| $1,000,000 | $10,000 | $20,000 | $30,000 |
| $1,500,000 | $15,000 | $30,000 | $45,000 |
Worked out from the published rates at the time this page was built — the arithmetic, not a summary. Capital improved value is set by the Valuer-General and appears on your assessment.
When land counts as vacant
- Not lived in for 6 months of the previous year by the owner, a permitted occupant, or someone under a genuine lease or short-term letting arrangement. The 6 months need not be continuous, and need not be the same person.
- Listing the property is not enough. The SRO says it is not enough for the property to be available to use — being listed for rent, sale or short-term occupation does not count. It has to have been used.
- Under construction or renovation, or uninhabitable, for 2 years or more on 31 December. Construction or renovation starts when the building permit was issued.
- Undeveloped land in metropolitan Melbourne that has stayed undeveloped for a continuous 5 years or more and is capable of residential development — included from 1 January 2026. The 5 years may be before 1 January 2026.
- Not covered: commercial residential premises, residential care facilities, supported residential services, retirement villages, and land in alpine resorts or Dinner Plain.
It is charged on the property, not on you. A property left empty while it is being sold, or while you are overseas, is exactly the situation this tax is aimed at — which is why the exemptions below matter more than the rate.
The exemptions, by their codes
Your assessment shows an exemption code against each property. These are the codes the SRO lists:
| Code | What it means |
|---|---|
| HOL | Exempt as a holiday home |
| WRK | Exempt where the land is occupied to attend a place of business or employment |
| TFR | Exempt because ownership transferred to you during the preceding year |
| CON | Concessionary rate — new residential land unused, unoccupied and unsold for more than 3 years |
| RES1 / RES2 / RES3 | Exempt because it became residential land in the preceding year, the second preceding year, or the third with genuine efforts to sell |
| HAB | Exempt where construction or renovation to make the land habitable started and finished during the preceding year |
| ADJ-HOL / ADJ-PPR | Exempt as land adjoining a holiday home, or adjoining your principal place of residence |
| DEV | Exempt because the land cannot be used or developed for residential purposes |
Frequently asked questions
What is vacant residential land tax in Victoria?
A separate annual tax on residential land in Victoria that was left vacant. It is charged on the property’s capital improved value — the land plus buildings and improvements — and the rate rises the longer the land stays vacant.
How much is it?
1% of capital improved value for the first year the land has been liable, 2% for the second consecutive year, and 3% for three or more. On a property with a capital improved value of $600,000 that is $6,000, $12,000 and $18,000 in those years. The SRO states plainly that there is no threshold — unlike land tax, there is no value below which you pay nothing.
Which properties does it apply to?
Residential land that was vacant: anywhere it was not lived in for 6 months of the previous year by the owner, a permitted occupant, or a person under a genuine lease or short-term letting arrangement. The 6 months do not have to be continuous or by the same occupant. Land under construction or renovation, or uninhabitable, for 2 years or more also counts. From 1 January 2026, undeveloped land in metropolitan Melbourne that has been undeveloped for 5 years or more and is capable of residential development is included too.
Is it enough to have the property listed for rent?
No. The SRO is explicit that it is not enough for the property to be available to use — being listed for rent, sale or short-term occupation does not satisfy the test. It must actually have been used for 6 months or more.
Is this the same as land tax?
No, and they are separate charges. Land tax is on the value of your land holdings above the land tax threshold; vacant residential land tax is on a property’s capital improved value with no threshold at all. The SRO also lists it separately from the absentee owner surcharge and from the federal vacancy fee for foreign owners. You can be liable for more than one of them.
Which year is assessed?
It works off the previous year’s use: if the property was vacant in 2025, you may be assessed for VRLT in 2026. The assessment lists the vacant residential land you owned at 31 December of the previous year.
Where does it apply?
From 2025 onwards, all residential land in Victoria. Before that it applied only in 16 Melbourne council areas — Banyule, Bayside, Boroondara, Darebin, Glen Eira, Hobsons Bay, Manningham, Maribyrnong, Melbourne, Monash, Moonee Valley, Merri-bek, Port Phillip, Stonnington, Whitehorse and Yarra.
What if the assessment is wrong?
Tell the SRO through the VRLT portal within 60 days of receiving the assessment, or penalty tax may apply. If you disagree with the valuation itself, an objection has to be lodged within 2 months. Both windows are set out on the SRO’s assessment page.
Related
- Victoria land tax calculator — the annual tax on land value, with its own threshold
- Absentee owner surcharge — the other charge that applies to some Victorian owners
- Rental bond calculator VIC — for the tenancy side of the same property
- Every state’s land tax compared
Rate, vacancy tests and exemptions from SRO — Understanding your vacant residential land tax assessment (page updated 12 June 2026) and Understanding vacant residential land tax, checked 16 October 2026. General information only — not tax advice.