Victoria land tax checklist

With the end of the 2025 calendar year fast approaching, it’s crucial for Victorian property owners to understand their land tax obligations. At Macpherson Kelley, our team has a thorough understanding of the land tax landscape and expertise in ensuring that your land tax obligations are suitably handled for the upcoming 2026 land tax year.

Land tax can be complex, especially with the multiple recent changes to the land tax legislative framework in Victoria.

Our experts have prepared a checklist of key issues, specific to the type of landholdings involved.

Principal Place of Residence (PPR)

• Have you notified the SRO of a newly purchased residence being used as your PPR?
• If you own multiple residences, and have just moved from one residence to another, have you notified the SRO?
• If you own multiple residences and live in more than one property, which property is currently exempt and do you know that there is no legislative requirement that at least one property will be treated as exempt?
• If you are moving overseas or going to be temporarily absent from your current PPR, have you considered the “absence rule” and what you need to do to satisfy the land tax exemption under the absence provisions?
• If you are constructing a residence on land that you intend to claim a land tax exemption, are you aware of the notification and compliance requirements?
• If you have moved out of your PPR due to it being unfit for occupation, have you considered what you need to do to continue receiving a land tax exemption for the property?
• Do you know that since 1 January 2024, adjustments for land tax are prohibited at settlement, unless the property is considered a “high-value property”?

Primary Production Land (PPL)

• If you have recently purchased land not currently used for primary production but intended to be used for primary production purposes, are you aware of the requirements for the preparatory works exemption?
• If you are currently carrying out preparatory works on the land, have you identified what category (as defined in the legislation) of primary production that you intend to
• carry out?
• If the land is located outside of greater Melbourne and agistment of animals are undertaken on the land, do you actually know whether those activities will be considered to be sufficient to obtain the land tax exemption?
• Have you kept contemporaneous records of receipts for expenses and other purchases undertaken, as well as sales (if applicable)?
• Do you know whether the land will satisfy the PPL exemption based on the ownership requirements in legislation (ie if land is located in Greater Melbourne, in an urban zone)?

Deceased Estates

• Are you aware of what the law is in relation to land tax on deceased estates, especially what constitutes an “administration trust”?
• If the period of administration of a deceased estate has commenced, have you notified the SRO?
• Do you know the duration of the concessionary period during which time the land(s) in question are not assessed at the surcharge rate of land tax?
• If the land in question is the deceased’s PPR, do you know how the property will be treated differently from non-PPR land(s)?
• If administration has been completed, have you notified the SRO?

Investment Properties/Holiday Homes

• Are you aware of the recent changes to the vacant residential land tax (VRLT) regime which has been expanded to the whole of Victoria commencing on 1 January 2025?
• If property has been vacant for the current calendar year, are you aware that in some circumstances, exemptions may apply?
• If no exemptions apply, do you know when you need to notify the SRO so as to not be penalised with penalty tax?
• Do you know what the rules are for holiday homes, including the amended rules for the holiday home exemption?

Vacant Undeveloped Land

• Are you aware that from 1 January 2026, undeveloped residential land in metropolitan Melbourne may attract VRLT, as such, if such land is owned at the end of 31 December 2025, VRLT may apply?

Lands held in Trust

• Are you aware that generally land held under a trust will be assessed at the surcharge rate of land tax?
• Do you know that while the trust surcharge generally applies to trusts, there are exemptions?
• Have you notified the SRO of any recently purchased lands that are owned by the Trust, including if the Trust has disposed of any lands?
• Do you know that both PPR trust notifications and beneficiary trust notifications can be lodged with the SRO so as to generally obtain a reduced land tax liability for the trust?
• Do you know that while trust notifications generally provide a reduced land tax liability, in some instances, it may be beneficial to actually revoke or amend the relevant trust notifications?

Absentee Owner Surcharge (AOS)

• Are you aware that the AOS applies to not only absentee individuals, but also absentee corporations and absentee trusts?
• Do you know that in instances where AOS is applicable, there are exemptions available to absentee trusts and absentee corporations?
• Do you know that the absentee trust/ corporation exemptions have multiple factors which need to be proven so as to receive the exemption?

Charitable Land

• Do you know that even though your charity is listed or recognised by the ACNC, that in
• Victoria, an ACNC-recognised charity can be treated as not constituting a “charity” for land tax purposes?
• Are you aware that land used and occupied by a charitable institution exclusively for charitable purposes is exempt from land tax?
• Are you also aware that if vacant land is held   for future use and occupation by a charitable institution exclusively for charitable purposes, it is also exempt from land tax?
• If land has been treated as charitable land by the SRO and has been historically exempt from land tax, are you up to date with the legislative changes that took effect from the 2022 land tax year now requiring the land to also be “occupied” exclusively for charitable purposes and what the implications are?
• Do you know that while the SRO may assess part of a land if it is not used/held for future charitable uses, the crux of whether part of a land is assessable for land tax will come down to whether such part is used and occupied (ie intermittently or otherwise) by the charity or other third party?

Contact our taxation experts

For a printable hardcopy of the checklist, you can contact Thomas directly at Thomas.abraham@mk.com.au. If any of the above raises questions for you, please don’t hesitate to contact our experienced Tax lawyers.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.