From January 1 2018, a new vacant residential land tax will be applied to all residential homes in metropolitan Melbourne that were vacant for more than six months in the preceding calendar year. This is a new Victorian tax and different (but also payable in addition) to land tax, the absentee owner surcharge and the federal annual vacancy charge.
The vacant residential land tax will be an annual tax and the fee payable is to be set at one per cent of the value of the home or capital improved value (CIV) as denoted by the Valuer General. This new tax will be assessed over a calender year, January 1 through to December 31, and the six month vacancy does not have to be a continuous period.
Initially self-reporting, the State Revenue Office will be undertaking monitoring and compliance activities to determine vacancy status. There will be certain specific exemptions applicable such as holiday homes used for a minimum of four weeks every year, and properties used for at least 140 days a year for the purpose of attending the owner’s workplace.
Lucas Property Management Director Dylan Emmett encourages local property owners to act now to avoid being caught out unaware. “Many homeowners leave a property vacant when deciding whether to rent or sell, or when considering relocating. This new tax will take away from the yield or profitability of your property – it can now be in the homeowner’s best interest financially to rent out the property whilst living changes are pending.”
Click here for more details about the vacant residential land tax, the State Revenue Office provides a great reference for local property owners.
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