Vacant Residential Land Tax (Victoria)

Estimate vacant residential land tax on capital improved value, including how it escalates for each consecutive year the property stays liable.

Statewide since 1 January 2025, and it escalatesVacant residential land tax now applies across all of Victoria, not just inner Melbourne. The rate rises from 1% to 2% to 3% of capital improved value for each consecutive year the land remains liable. Owners must notify the State Revenue Office by 15 January each year, and penalties apply if they do not.

The property

$1,100,000 capital improved value

Capital improved value

VRLT is assessed on capital improved value — land plus everything on it — not the site value used for general land tax. There is no threshold and no COVID debt levy.

Years liable

First year · 1%

Consecutive years the land has been liable

First year

Second year

Third year or more

Land is liable if it was unoccupied for more than six months in total during the preceding calendar year.

Special categories

Standard escalating rate

Undeveloped land or new residential land — flat 1%

Undeveloped land in metropolitan Melbourne capable of residential development and vacant for five years or more, or new residential land unused, unoccupied and unsold for more than three years — assessed at a flat 1% that does not escalate.

Escalation if the property stays vacant

Rate applied

–

of capital improved value

Next year if still vacant

–

at the same valuation

Three-year cost

–

if it never gets occupied

What three vacant years cost

Your current yearOther years

The escalation is the point of the tax — it is designed to make holding a property empty progressively more expensive rather than to raise revenue. Six months of genuine occupation in a calendar year resets liability, and a number of exemptions remove it entirely.

Property sitting empty and not sure if you have to notify?

Notification is due by 15 January each year and penalty tax applies if it is missed. Several exemptions can remove liability altogether — we can check which apply.

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When a property counts as vacant, and when it doesn't

Vacant residential land tax applies where residential land was unoccupied for more than six months in total during the preceding calendar year. The six months do not need to be continuous, and occupation means genuine use as a residence — by the owner, a tenant, or someone under a lease or licence.

It is assessed on capital improved value rather than site value, which is why the bill is so much larger than general land tax on the same property. There is no tax-free threshold at all, and VRLT sits on top of any general land tax and absentee owner surcharge.

Exemptions do a lot of work here. Genuine holiday homes, properties used for work purposes, land that changed ownership during the year, and land undergoing construction or renovation can all fall outside the tax. Each has its own conditions and most require the owner to make a notification.

Rates & assumptions used

Rates published by the State Revenue Office: 1% of capital improved value in the first year of liability, 2% in the second consecutive year and 3% in the third and later consecutive years. Before 2025 the rate was a flat 1% for all properties.
A flat 1% applies to land in metropolitan Melbourne that has remained undeveloped for five years or more and is capable of residential development, and to new residential land that has been unused, unoccupied and unsold for more than three years.
There is no tax-free threshold and no COVID debt levy component.
Liability is determined by the use of the land in the calendar year preceding the assessment year. Land is generally vacant if it was not occupied for more than six months in total in that year.
VRLT is separate from, and additional to, general land tax and the absentee owner surcharge.
Not modelled: holiday home, work accommodation, change of ownership, new residential land and construction or renovation exemptions; commercial residential premises; apportionment on a change of ownership during the year.

Buying a property that has been sitting empty?

A change of ownership can affect liability, and a property clearance certificate shows what is outstanding before settlement.

Important. Figures shown are estimates generated from the information you enter. They are not an assessment, a quote, or a statement of what you will actually pay.

Owners of vacant residential land must notify the State Revenue Office by 15 January each year in respect of the preceding calendar year. Penalty tax may apply where a notification is not made. A number of exemptions are available — including for genuine holiday homes, properties used for work purposes, land that changed ownership during the year, and land undergoing construction or renovation — and any of these may remove liability entirely. Eligibility should be confirmed with the State Revenue Office.

This calculator provides a general estimate only, based on the figures you enter and the rates and assumptions listed above as at 28 July 2026. It is not legal, financial, tax or credit advice, does not take account of your objectives, financial situation or needs, and is not a substitute for advice from a qualified adviser. Rates, thresholds, concessions and eligibility rules change, and an official assessment may differ from this estimate. You should confirm your position with the relevant revenue office or the Australian Taxation Office and obtain your own professional advice before acting.