Leaving residential property unused in Victoria can have tax consequences. Vacant Residential Land Tax (VRLT) applies where residential land is left vacant, and its scope expanded statewide from 1 January 2025. If you owned residential land that was vacant during 2025, you may need to notify the State Revenue Office (SRO) by 15 February 2026, even where an exemption may be available. This guide explains when notification is required, the key dates to be aware of and what happens if you do not notify.
What is Vacant Residential Land Tax?
VRLT is a Victorian tax intended to discourage homes and residential land from being left unused and to encourage leasing, sale or development to increase housing supply.
From 1 January 2025, VRLT applies statewide to residential land that is vacant for more than six months in the preceding calendar year.
Who needs to notify the SRO?
You must notify the SRO by 15 February 2026 if you owned residential land in Victoria that was vacant at any time in 2025, including:
- residential property vacant for more than six months
- property under construction or renovation that remained uninhabitable for two years or more
- undeveloped residential land in metropolitan Melbourne that has been capable of development and vacant for five continuous years or more
Importantly, notification is required even if you believe an exemption applies. Failing to notify is itself a compliance breach.
When and how to notify
The 2026 notification deadline is 15 February 2026.
Notifications are lodged online through the SRO portal and require property identification details such as an assessment number or municipal property number. If you have lodged a VRLT notification in a prior year, you generally only need to notify again if your circumstances have changed.
What happens after you notify?
After lodging your notification:
- you will receive confirmation of lodgement
- if VRLT applies, the SRO will issue a separate VRLT assessment
VRLT assessments are issued separately from standard land tax assessments.
Exemptions and ongoing obligations
Certain exemptions may apply, including where land is used as a principal place of residence, is undergoing substantial renovation, or where specific hardship criteria are met.
However:
- you must still notify the SRO
- the SRO determines whether an exemption applies based on the information provided
You must also notify the SRO if your circumstances change, including where an exemption starts or ends or the land ceases to be vacant.
Penalties for failing to notify
Failing to lodge a VRLT notification by the required deadline may result in penalty tax, interest on unpaid amounts and further compliance or enforcement action.
Key takeaways
- Owners of vacant residential land in Victoria in 2025 must notify the SRO by 15 February 2026
- Notification is required even where an exemption may be available
- Failure to notify can lead to penalties and interest
Key FAQs
How does the SRO know if a property is vacant?
The State Revenue Office may identify vacant properties using owner declarations, data matching, utility usage, rental records, and compliance reviews. It can also request documents to verify how a property was used during the year.
Is a property vacant if it is advertised for rent or sale?
Yes. Advertising a property for rent or sale does not count as occupation for VRLT purposes. The property must be genuinely occupied for at least six months in a calendar year.
Does Airbnb or short-term accommodation count as occupancy?
Short-term accommodation may count as occupancy if it meets minimum usage requirements. However, occasional bookings or limited short-stay use may still result in the property being considered vacant.
Can friends or family living in the property avoid VRLT?
Generally no. Informal or irregular occupation by friends or family may not meet VRLT requirements. Occupancy must be genuine, lawful, and supported by evidence if requested by the SRO.
What evidence should owners keep for VRLT purposes?
Property owners should retain leases, utility bills, insurance records, council notices, renovation contracts, and any documents showing genuine occupancy or eligible exemption periods.
Does VRLT apply during renovations or construction?
VRLT can still apply during renovations or construction. Some exemptions exist, but they are time-limited and require owners to meet strict conditions and notification requirements.
What if a property is vacant for part of the year only?
VRLT is assessed based on total vacancy across the calendar year. Multiple shorter vacancy periods can be combined to reach the six-month threshold.
Can VRLT apply even if no land tax is payable?
Yes. VRLT can apply separately from ordinary land tax and may still be payable even if the property does not exceed standard land tax thresholds.
How MST Lawyers can assist
VRLT obligations often turn on how land is used, documented and structured. MST Lawyers assists property owners, investors and developers by reviewing property use, identifying potential exemptions and supporting practical compliance strategies.
For property-related matters, see our Property and Leasing services page.
Author: Evelyn Marcou, Lawyer Principal
Prepared by MST Lawyers. This article is general information only and does not constitute legal advice.
