A reminder that some significant changes occur to Victorian property owners for the 2024 year. From 1 January 2024, the land tax property thresholds have been reduced significantly which means that more properties will incur land tax than ever before. This has been well publicised and is hopefully well known to property owners, even if unwelcome news.

However, with this reduction in the thresholds, there could be unexpected ramifications for foreign owners or owners of properties which have not been occupied during the previous 12 months. There are additional taxes that apply in these situations if the property owner is liable for land tax (i.e. their land holding is above the minimum threshold). As this threshold has decreased from $300,000 to $50,000 many more individuals may be caught by these additional taxes.

Vacant residential land tax (VRLT) is an additional 1% surcharge owed by property owners if their property was unoccupied for a period of 6 months or more in the proceeding 12 months from 31st December. This 6 month period does not need to be consecutive and it applies to properties located in inner and middle Melbourne (i.e. excludes rural areas). There are however, specific and limited exceptions that may be available depending on the circumstances.

Absentee owner surcharge (AOS) is an additional 4% surcharge payable by property owners who live overseas. This surcharge has doubled from prior years.

Any owners impacted by these additional taxes for the 2024 assessment must notify the SRO by 15th January 2024. If not notified, the SRO will not update the status of their assessment. The issue is that severe penalties apply if the SRO discovers that the status is incorrect and they have not been notified where VRLT and/or AOS should apply. These penalties start at 5% for voluntary disclosure prior to an SRO investigation but will be 20% if the SRO discovers the issue and can go as high as 90% if the SRO believes the owner has intentionally disregarded the law.

If you have any queries, please do not hesitate contact us.