Understanding vacant residential land tax

Learn what vacant residential land tax is and who needs to pay it.

Key information

Vacant residential land tax (VRLT) is an annual tax on vacant residential land in Victoria. It aims to increase the supply of housing.

VRLT is based on how the property was used in the previous year. For example, if your property was vacant in 2025, you may need to pay VRLT in 2026.

VRLT applies to all residential land in Victoria. Before 2025, it only applied to these council areas in Melbourne: Banyule, Bayside, Boroondara, Darebin, Glen Eira, Hobsons Bay, Manningham, Maribyrnong, Melbourne, Monash, Moonee Valley, Merri-bek (formerly Moreland), Port Phillip, Stonnington, Whitehorse and Yarra.

VRLT is different from:

land tax
the absentee owner surcharge
the federal vacancy fee for foreign owners.

You may need to pay VRLT if you own:

residential land with an existing home that was vacant for more than 6 months in the previous calendar year
residential land with an existing home that has been under construction or renovation, or uninhabitable, for 2 years or more
from 1 January 2026, land in metropolitan Melbourne that has remained undeveloped for a continuous period of 5 years or more and is capable of residential development. The 5-year period may occur prior to 1 January 2026.

Property clearance certificates include outstanding VRLT.

Residential land

Residential land includes:

land with an existing home on it
land with a home which is being renovated
land where a former home has been demolished and a new home is being constructed (from 1 January 2026, there is no requirement to have had a former home)
land with a home on it that is uninhabitable
from 1 January 2026, undeveloped residential land.

VRLT does not apply to commercial residential premises, residential care facilities, supported residential services, retirement villages, or land in alpine resorts or Dinner Plain.

VRLT generally applies to land capable of being used solely or primarily for residential purposes. This means a property that can be occupied. It does not matter whether the property needs minor repairs or meets minimum rental standards.

Vacant properties

A property is vacant if it has not been lived in, for 6 months of the previous year, by:

the owner or their permitted occupant as their home, or
a person under a genuine lease or short-term letting arrangement.

The 6 months do not have to be continuous, or by the same occupant.

It is not enough for the property to be available to use, such as being listed for rent, sale or short-term occupation. It must actually be used for 6 months or more.

Properties under construction or renovation and uninhabitable properties

A property is vacant if, on 31 December, it had a residence that was:

under construction or renovation for 2 years or more, or
uninhabitable for 2 years or more.

Construction or renovation starts when the building permit was issued.

The renovation must be substantial enough to warrant a building permit.

Uninhabitable properties generally require significant work to return them to a state where someone could live.

We can use our discretion to extend the 2-year period if there is an acceptable reason.

Undeveloped land

From 1 January 2026, VRLT applies to land in metropolitan Melbourne that:

is in a zone other than a non-residential zone
is capable of residential development
has remained undeveloped for a continuous period of 5 years or more.

This includes:

land without a property on it
land with a residence that is partially built but has not been occupied.

The 5-year period may occur prior to 1 January 2026.

We can use our discretion to extend the 5-year period. The Victorian Government Gazette outlines the factors we will consider.

Metropolitan Melbourne is made up of the following council areas: Banyule, Bayside, Boroondara, Brimbank, Cardinia, Casey, Greater Dandenong, Darebin, Frankston, Glen Eira, Hobsons Bay, Hume, Kingston, Knox, Manningham, Maribyrnong, Maroondah, Melbourne, Melton, Merri-bek (formerly Moreland), Monash, Moonee Valley, Mornington Peninsula, Nillumbik, Port Phillip, Stonnington, Whitehorse, Whittlesea, Wyndham, Yarra and Yarra Ranges.

VRLT may not apply if:

the land is being developed for a non-residential use, and
the land has not yet been developed in that way due to an acceptable reason, such as delays outside the owner’s control.

Land is under development for a non-residential use when you make a genuine planning/building permit application or planning scheme amendment request for a non-residential use. We can use our discretion to determine land is being developed for a non-residential use even if you haven’t made an application or request yet.

Section 34C(4C) of the Land Tax Act 2005 provides for a break in the 5-year period if there is a genuine change in ownership.

Exemptions from vacant residential land tax

If a property is exempt from land tax, it is also exempt from VRLT.

There are also some specific exemptions from VRLT for:

holiday homes
properties that changed ownership in the previous year
land that recently became residential land
land incapable of residential development
work accommodation
undeveloped land adjoining your home or holiday home
from 1 January 2026, land with a residence that is under construction/renovation or uninhabitable at any time in the previous year.

Learn more about VRLT exemptions.

Making a notification

If you own vacant residential land, you must notify us by 15 February.

You can make a notification through our portal.

You must notify us even if you believe your land is exempt.

If you have made a notification in the past, you only need to make a new one if your circumstances have changed.

Learn more about making a VRLT notification.

Assessment notices

If you owe VRLT, we will send you a VRLT assessment before 30 June. Your assessment will show:

all the vacant residential land you own in Victoria
the taxable value of each property
the applicable rate of tax
any applicable exemptions or concessions.

If any of these details are incorrect, you must tell us via the portal within 60 days of receiving your assessment.

Learn how to understand your VRLT assessment.

Rates and calculations

VRLT is based on your land’s capital improved value. There is no threshold or COVID levy.

The rate of tax depends on:

the period the land has been liable for VRLT
other circumstances such as whether it is newly constructed or has been previously used or sold.

You can use our VRLT calculator to estimate how much you will pay.

See the current VRLT rates.