The State Taxation Further Amendment Act 2025 (the Act) received Royal Assent on 25 November 2025.

The Act implements changes to the congestion levy announced in the 2024–25 Budget Update and makes various changes to other taxation laws.

Congestion levy changes

The Act makes several changes to the Congestion Levy Act 2005, which commence from 1 January 2026 to apply to the 2026 levy year onwards.

The Act increases the category 1 area levy rate to $3,030 per leviable parking space and the category 2 area rate to $2,150 per space. Levy rates in 2027 and subsequent years will continue to be adjusted annually by Consumer Price Index.

The Act expands the category 2 levy area to include inner-eastern suburban areas not currently captured by the levy. These include the suburbs of Burnley, Cremorne, South Yarra, Windsor and parts of Richmond, Abbotsford and Prahran in proximity to Chapel Street, Bridge Road, Swan Street, Victoria Street, Hoddle Street and Punt Road. The increased category 2 rate of $2,150 per leviable parking space will apply to the expansion area. The Act also moves the area surrounding the Queen Victoria Market from the category 1 area to the category 2 area.

The Act provides new congestion levy exemptions and concessions.

A 50% levy reduction will be available for conditional free parking provided by shopping centres and other retailers in the category 2 area exclusively for retail customers. To be eligible, the parking space must be exclusively set aside for retail customer parking and connected to a retail premises or retail shopping centre such that the parking space is located on, or adjacent to, the retail premises or retail shopping centre. The parking must be either provided free of charge for at least 60 minutes to all customers or provided free of charge to customers who make a purchase at the retail premises or shopping centre.

An exemption will be available to government schools and government boarding schools providing free parking on their premises, to align their treatment with non-government schools.

The Act improves congestion levy administration by excluding exclusively residential parking spaces from the levy framework, removing the requirement for home-owners to register for the congestion levy if they exclusively own residential parking spaces (which are exempt from the levy).

The Act introduces a requirement for the relevant Minister to enter a memorandum of understanding with each municipal council with any land in the levy area in relation to annual allocations for the purpose of funding active transport or other transport initiatives.

Vacant residential land tax changes

The Act amends the Land Tax Act 2005 to exclude residential land in Dinner Plain village from vacant residential land tax (VRLT). This change applies retrospectively from 1 January 2025 when VRLT was expanded to apply to the whole of Victoria. Owners of residential land in Dinner Plain who paid VRLT for the 2025 land tax year will be entitled to refunds.

The Land Tax Act 2005 is also amended to change the VRLT notification deadline from 15 January to 15 February each calendar year. Owners must notify the SRO in writing if residential land they own was vacant in the previous year, and apply for certain VRLT exemptions, before the notification deadline. This amendment commences from the day after Royal Assent and will apply from the 2026 land tax year onwards.

The Act introduces a VRLT exemption for land with a residence under construction or renovation, or an uninhabitable residence, at any time during the year before the relevant tax year. This ensures that VRLT is not imposed on a residence that was unavailable for occupation for a significant part of the year. This exemption will operate in addition to an existing exemption for construction or renovation being undertaken for a longer period on land. The amendment will take effect from the day after Royal Assent for the 2026 land tax year.

Land tax changes 

The Act also introduces a land tax exemption for land valued less than $300,000 containing a non-permanent shelter used as the owner’s residence, for situations when the principal place of residence (PPR) exemption from land tax does not apply. The new exemption has similar requirements to the PPR exemption.

In addition, the land’s site value must be less than $300,000, the owner must own no other land, and the land must have a non-permanent residence being used by the owner or a vested beneficiary of a fixed trust. Partially built homes or non-residential properties will not be able to receive an exemption.

Residential use requirements will align with the existing PPR exemption requiring the land to be used as a PPR since 1 July in the previous year, with some narrow exceptions. The amendment will take effect from the day after Royal Assent for the 2026 land tax year.

Application of certain tax measures to New Zealand citizens

The Act amends the Duties Act 2000 and Land Tax Act 2005 to clarify how foreign purchaser additional duty (FPAD) and the absentee owner surcharge (AOS) apply to citizens of New Zealand. The amendments replace certain requirements for citizens of New Zealand to hold a special category visa with tests based on ordinary residence in Australia.

To be excluded from FPAD, a New Zealand citizen must ordinarily reside in Australia for a continuous period of at least 6 months in a period commencing 12 months before the date of the dutiable transaction or relevant acquisition and ending 12 months after that date. This amendment will commence from the day after Royal Assent.

For AOS, it will no longer be relevant if a New Zealand citizen holds a special category visa. A New Zealand citizen may still be excluded from AOS if they ordinarily reside in Australia or if they meet the presence in Australia test (in Australia on 31 December in the year immediately preceding the tax year and for a total period of at least 6 months in the year immediately preceding the tax year). This takes effect from the 2026 land tax year onwards.

The Act also amends the First Home Owner Grant and Home Buyer Schemes Act 2000 to remove the requirement for citizens of New Zealand to hold a special category visa to be eligible for the First Home Owner Grant (FHOG). This amendment will commence from the day after Royal Assent.

Other duties changes

The Act amends the Commercial and Industrial Property Tax Reform Act 2024 and Duties Act 2000 to ensure that for direct transfers of land to enter the commercial and industrial property tax (CIPT) reform, duty must be payable on 50% or more of the dutiable value of the property, consistent with the original policy intent. The amendment will apply retrospectively to transactions from 1 July 2024 when the CIPT reform commenced.

The Act amends the Duties Act 2000 to introduce an exemption for transfers involving a custodian of a trustee of a trust, such as the appointment or change of a custodian, a transfer back to the trustee or appointment of a sub-custodian. The amendment will commence from the day after Royal Assent.

Amendments to tax processes

The Act amends the First Home Owner Grant and Home Buyer Schemes Act 2000 (FHOGHBS Act) to deem a document sent electronically by the Commissioner of State Revenue (Commissioner) to be served when the communication is received. The amendment aligns the electronic service rules for the FHOGHBS Act with the Taxation Administration Act 1997 (TAA) to ensure consistency. The amendment will take effect from the day after Royal Assent.

The Act amends the Land Tax Act 2005 to raise the threshold for the Land Tax Hardship Relief Board to consider applications from $1,000 to $5,000 and remove the requirement for the Treasurer to approve the Commissioner’s grants of relief. This amendment will commence from the day after Royal Assent.

The Act amends the TAA to authorise tax officers to share tax-related information with the Valuer-General Victoria. This amendment will facilitate the administration of Victorian tax and revenue laws and protect public revenue. Any information sharing with the Valuer-General Victoria will be conducted under the strict protections and safeguards provided by the TAA’s secrecy provisions. This amendment will commence from the day after Royal Assent.

The Act repeals the Taxation (Interest on Overpayments) Act 1986, which contained provisions relating to the payment of interest on refunds to taxpayers following successful objection or appeal. This Act no longer has application because objections, appeals and refunds are now governed by the TAA and all historical matters have been finalised. The amendment will take effect from the day after Royal Assent.

Other amendments

The Act amends the Building Act 1993 to ensure that the method of calculating the building permit levy is clear and fit for purpose. The amendments establish a clear calculation method going forward, validate the calculation and imposition of the levy in the past and make other consequential amendments to ensure smooth operation of the building permit levy scheme.

The Act also amends the Domestic Animals Act 1994 to give effect to a modest increase in the amounts payable to the Victorian Government from dog and cat registration fees collected by councils, and greyhound registration fees collected by Greyhound Racing Victoria (GRV). The Act will increase the amount payable from $4.51 (2024–25) to $9 (2026–27) for each dog and cat registration, increasing annually in line with regular increases to fees under the Monetary Units Act 2004, and from $3.50 (2024–25) to $7 (2026–27) for each GRV greyhound registration. The increase will support Agriculture Victoria to continue to undertake important activities such as responsible pet ownership programs, animal welfare initiatives and research.

The Act amends the Limitation of Actions Act 1958 to clarify the limitation period applicable to proceedings for the recovery of invalid taxes. This amendment clarifies that section 27 of the Limitation of Actions Act does not apply to proceedings to which section 20A(2) of the Act applies. This amendment commences on the day of Royal Assent.

The State Taxation Acts (Further Amendment) Act 2025 received Royal Assent on 25 November 2025. It changes the rules for New Zealand citizens in relation to foreign purchaser additional duty (FPAD).

Previously, FPAD does not apply if a New Zealand citizen holds a Special Category Visa (Subclass 444) at transfer (being settlement).

The new test requires a New Zealand citizen to satisfy the Commissioner that they ordinarily resided, or will ordinarily reside, in Australia for a continuous period of at least 6 months within the period commencing 12 months prior to, and ending 12 months after, the date of settlement. 

You ordinarily reside in Australia if you regularly or customarily live here. It does not include a temporary or occasional residence. 

The new test will apply to all settlements from 26 November 2025.

The changes include: 

• when the Commissioner can make a provisional determination that a property has a ‘qualifying use’ where a property has no allocated Australian Valuation Property Classification Code 
• what happens to CIPT property that is subdivided. 

You can view the updated guidance on our website.

To support your understanding of these changes, our customer education team has a series of CIPT webinars and seminars scheduled over the coming months. Book now. 
 

In addition, the payroll tax deduction continues to be phased out for employers and groups with wages between $3 million and $5 million, with no deduction applied for employers and groups with wages of $5 million or more. 

Find out more about the changes to payroll tax threshold.

The Act implements a 2025–26 Victorian Budget measure and makes various changes to taxation laws including:

• an extension of the off-the-plan land transfer duty
• new tax relief measures for victim-survivors of family violence
• expanded land tax exemptions for the homes of deceased owners or owners in assisted living
• a revised payroll tax definition of ‘regional employee’ and more. 

Find out more about the changes. 

The State Taxation Acts Amendment Act 2025 (the Act) received Royal Assent on 24 June 2025.

The Act implements a 2025–26 Victorian Budget measure and makes various changes to taxation laws.

2025–26 Budget measure

Extension of the temporary off-the-plan duty concession

The Duties Act 2000 is amended to extend the eligibility period for the temporary off-the-plan land transfer duty concession for purchases of eligible apartments and townhouses for a further 12 months, to contracts entered into before 21 October 2026. The concession reduces the amount of duty payable by allowing purchasers to exclude construction costs incurred on or after the contract date from the dutiable value of land.

This measure supports the 2025-26 Budget investment of $61 million to reduce land transfer duty for off-the-plan apartments, units and townhouses for another 12 months.

Other amendments

Family violence tax relief measures

The Duties Act 2000, First Home Owner Grant and Home Buyer Schemes Act 2000 and Land Tax Act 2005 has been amended to enable victim-survivors of family violence to access certain tax relief measures. To assist those affected by family violence, the measures allow victim-survivors to:

• receive an exemption from land tax for up to 6 years where the person has left their principal place of residence (PPR) due to family violence and the person has not received income from the land
• requalify for first home buyer benefits including the first home owner grant on another purchase where they have left due to family violence and haven’t received, or will not receive, a financial benefit from the property.

These amendments will commence from the day after Royal Assent.

Build-to-Rent (BTR) provisions

The Land Tax Act 2005 has been amended to ensure that BTR developments eligible for BTR tax benefits promote long-term rental options.

From 1 January 2026, the Act amends the Land Tax Act 2005 to:

• clarify that a minimum 3-year rental lease must be genuinely offered to a renter in a BTR development
• require the BTR provider and renter to jointly sign a declaration that a long-term rental option was offered but a lesser term was entered into at the request of the tenant. This declaration must be provided to the Commissioner upon request
• Allow a minimum lease term to be prescribed in regulations.

The Land Tax Act 2005 is also amended to give the Commissioner the power to disregard periods where a property eligible for BTR benefits is temporarily uninhabitable, when determining whether developments remain eligible. This amendment commences from the day after Royal Assent.

Commercial and Industrial Property Tax Reform (CIPT)

The Commercial and Industrial Property Tax Reform Act 2024 has been amended to enable the Commissioner to provisionally determine whether a property has a ‘qualifying use’ where no Australian Valuation Property Classification Code has been allocated to the land.

This change enables relevant land to transition from land transfer duty to annual land tax for commercial and industrial properties. This amendment commences retrospectively from 1 July 2024, when the CIPT reform commenced, to ensure property transacted from 1 July 2024 can enter the CIPT reform as necessary.

The Commercial and Industrial Property Tax Reform Act 2024 is also amended to ensure the duty payable on a property after subdivision (child lot) aligns with the treatment of the property before subdivision (parent lot). This amendment commences from the day after Royal Assent.

Land tax amendments

The Land Tax Act 2005 is amended to:

• allow a PPR exemption to partially apply to land when the owner is unable to live independently or passes away, despite the land being used to derive income from a substantial business activity or a separately rented residence
• extend the initial period of the section 58 exemption for PPRs on land unfit for occupation after an event such as a fire or flood to 4 years, allowing the exemption to be available for a maximum of 6 years.

From 1 January 2026, the Land Tax Act 2005 is also amended to streamline certain notification obligations imposed on trustees in relation to the disposal or acquisition of land. These changes clarify that trustees are required to notify the Commissioner:

• where a trustee holds land for one trust, and the land is transferred to a different trust to be held by that same person as trustee
• where a trustee disposes of land directly to themselves to be held in any capacity other than as trustee.

Payroll tax

From 1 July 2025, the Payroll Tax Act 2007 is amended to clarify the definition of ‘regional employee’. The amendment clarifies that only services performed in Victoria will be taken into account when determining whether a person is a regional employee.

Revenue Ruling PTA-042v2 Application of regional rate has been published to reflect the new regional employee definition and explain the requirements under the new definition. PTA-042v2 takes effect from 1 July 2025.

Taxation Administration Act

The Taxation Administration Act 1997 is amended to introduce a new base penalty tax rate of 50% for tax and notification defaults due to the recklessness of the taxpayer or someone acting on the taxpayer’s behalf. The new penalty rate will apply to tax defaults and notification defaults occurring from the day after Royal Assent.

Unclaimed Money Act 2008

The Unclaimed Money Act 2008 is amended to empower the Registrar of Unclaimed Money to recover unclaimed money which has been paid to a person who is not the owner, by issuing a notice of repayment; and empower the Registrar to pay an amount of unclaimed money to a subsequent genuine claimant, even if the entitlement has already been paid to an earlier claimant. These amendments commence from the day after Royal Assent.

Trust for Nature

The Victorian Conservation Trust Act 1972 is amended to expand the Vacant Land Conservation Covenant Account (VLCCA) criteria to allow funds to be allocated to a broader range of conservation covenants across Victoria. The expanded criteria of the VLCCA will enable funds in the VLCCA to be used in relation to land that contains a dwelling, land that has been zoned for non-residential purposes, or land in Victoria that is outside metropolitan Melbourne. This amendment commences from the day after Royal Assent.

The Victorian Government announced in December that the fire services property levy will be replaced with the ESVF from 1 July 2025.

You can read further information in the Victoria Government’s media release. 
 

The Act introduces changes to several Acts and includes changes to vacant residential land tax, payroll tax, commercial and industrial property tax, land transfer duty, as well as foreign purchaser additional duty and absentee owner surcharge.

Vacant residential land tax (VRLT)

Holiday homes owned by companies and trusts

The principal place of residence requirement for the holiday home exemption for land held by companies and trusts has been amended so that it can be satisfied if the interest in the landholding company or trust is held by a natural person or persons, either directly or indirectly.

The holiday home exemption will be amended to ensure that the exemption continues to apply after the death of the owner of the land, or where the land is owned by a company, after the death of sole shareholder of the company, provided a relative of the deceased satisfies the principal place of residence and use and occupation requirements for the exemption.

Additionally, the holiday home exemption will be expanded to allow the exemption to apply where there has been a change of trustee of an existing trust after 28 November 2023, provided that all other requirements for the exemption are met following the change of trustee.

Other VRLT amendments

From 1 January 2025, the Land Tax Act 2005 is amended to exclude land located in alpine resort area in Victoria from the imposition of VRLT.

The Land Tax Act 2005 is also amended to clarify the application of the 5-year rule for unimproved land – land which meets the requirements of being vacant in the 5 calendar years preceding 2026 will be liable to VRLT in 2026 (when the new rules commence) if no exemption applies.

Payroll tax

From 1 July 2025, the Payroll Tax Act 2007 is amended to introduce a payroll tax exemption for payments made to contractor general practitioners (GPs) and to employee GPs by general practice medical clinics which offer fully-funded services (including bulk billing) and their services and are subject to payroll tax.

The Payroll Tax Act 2007 is amended to expressly authorise the Commissioner to make a reassessment of payroll tax under the Taxation Administration Act 1997 beyond 5 years after the initial assessment of payroll tax, in circumstances where an employer has underpaid wages.

Commercial and industrial property tax reform

The Duties Act 2000 is amended to introduce new upfront duty exemptions and concessions for certain non-standard transactions (e.g. transactions in relation to dutiable leases, or the acquisition of fixtures or economic entitlements) where appropriate duty has previously been paid as part of the land entering the commercial and industrial property tax reform scheme. Where full duty has not been paid, the Commissioner will have discretion to fully or partially exempt the non-standard transaction from duty based on legislative factors that guide the application of the discretion. These amendments take effect from the day after Royal Assent.

Pensioner and concession card holder duty

The Duties Act 2000 will be amended to enable the pensioner and concession card duty reduction to apply to the purchase of a home by the guardian of a person with a legal disability who is an eligible cardholder, or to the purchase of a home by the trustee for a special disability trust where the principal beneficiary is an eligible cardholder, as well as equivalent amendments to the first home buyer duty concession or exemption in similar circumstances where the principal beneficiary is a first home buyer.

Similarly, the First Home Owner Grant and Home Buyer Schemes Act 2000 will be amended to allow the First Home Owner Grant to be paid on the purchase of a home by the trustee of a special disability trust where the principal beneficiary is an eligible first home buyer.

Friendly societies

The Duties Act 2000 is amended to abolish the current land transfer duty exemption available to friendly societies. The Duties Act 2000 is also amended to restrict the current insurance duty exemption available to friendly societies to ensure that only societies that have a mutual structure and beneficial objects are eligible for the exemption. The abolition of the land transfer duty exemption applies from the day after Royal Assent, while the insurance duty changes take effect from 1 January 2025. The land transfer duty exemption will still be available to transfers or declaration of trusts post 1 January 2025 that give effect to a contract or other arrangement entered into prior to 1 January 2025.

Foreign purchaser additional duty (FPAD) and absentee owner surcharge (AOS)

The Duties Act 2000, Land Tax Act 2005 and Taxation Administration Act 1997 are amended to ensure that liability of foreign purchasers and absentee owners of land from certain countries to pay FPAD and AOS for the period 1 January 2018 to 8 April 2024 are imposed as they were intended to be imposed, aligning with amendments recently made by the Commonwealth.

Land Tax Act 2005

The Land Tax Act 2005 is amended to ensure that land owned or managed by a charitable institution and occupied or available for occupation by a resident exclusively in connection with the institution’s charitable purpose for the relief of poverty will be exempt from land tax.

The Land Tax Act 2005 is also amended to expand the definition of an excluded trust to include a trust whose beneficiaries are non-racing clubs referred to in section 73A of the Land Tax Act 2005 as well as to trusts whose beneficiaries are limited to non-profit organisations the primary purpose or objective of which is to conduct sporting activities or outdoor recreational, outdoor cultural or similar outdoor activities, or the members of such organisations consistent with the current exemption in section 72 of the Land Tax Act 2005. These amendments take effect from the day after Royal Assent.

Valuation of Land Act 1960

Amendments are made to the Valuation of Land Act 1960 to give final effect to the transition of responsibility for valuations from local councils to the Valuer-General. The Valuation of Land Act 1960 is amended to improve the operation of objection, review and appeal provisions and to make other technical changes.

The Act introduces changes to several Acts, and includes changes to vacant residential land tax, payroll tax, commercial and industrial property tax, land transfer duty, as well as foreign purchaser additional duty and absentee owner surcharge.

Find out more about the changes.

A short stay means a stay in property for a continuous period of less than 28 days.

The levy is a flat 7.5% of the total booking fees paid, including fees and charges such as cleaning fees and GST where applicable. The total booking fee does not include credit card fees.

The levy will not apply to a short stay in a property that is someone’s principal place of residence (PPR), whether they own or rent the property. For example, if you list your property for short stay bookings while you’re away on holidays, any short stays that guests book and complete in your home are not liable for the levy.

The levy will apply to a short stay in accommodation such as an entire house and apartment, a private room in a house (where the house is not a person’s principal place of residence), a granny flat or other separate residence (even if located on the same land as a person’s principal place of residence) and a tiny home parked on land. It will not apply to a stay in a hotel, motel or similar.

The levy must be paid by:

• the booking platform where the booking is made via the platform, or
• the property owner or tenant, where the booking is accepted without a platform.

Revenue raised by the short stay levy will fund Homes Victoria, with 25% of funds to be invested in regional Victoria.

For more information, including upcoming webinars about the levy and the obligations of those who take bookings, visit our website.