Vacant Residential Land Tax (VRLT) applies as an additional levy on properties that remain vacant for more than six months in a year in Victoria. VRLT is separate from land tax and distinct from both the absentee owner surcharge and the federal annual vacancy fee. However, if a property is exempt from land tax, it is also exempt from VRLT.

From 1 January 2025, a progressive rate of VRLT applies to non-exempt vacant residential land across all of Victoria. VRLT is calculated on the Capital Improved Value (CIV) of taxable land. Capital Improved Value (CIV) is the value of the land, buildings and any other capital improvements made to the property as determined by the general valuation process. It is displayed on the council rates notice for the property.

The VRLT rate increases the longer a property remains vacant:

• 1% of CIV in the first year it becomes liable.
• 2% of CIV if the property is vacant for a second consecutive year.
• 3% of CIV if the property remains vacant for a third consecutive year or more.

From 1 January 2026, Unimproved residential land in metropolitan Melbourne that has remained undeveloped for at least 5 years and is capable of residential development may attract VRLT from 1 January 2026 onwards.

If you would like to know more about the VRLT please feel free to read our article Vacant Residential Land Tax (VRLT) In Victoria.