What do we know about the vacant residential land tax?
From 1 January 2018, some homes in Melbourne that are not occupied for more than 6 months may be subject to the vacant residential land tax. Some things to note:
It only applies to some suburbs inner and middle Melbourne properties and may include the council areas of Melbourne, Port Phillip, Stonnington and Yarra (amongst others).
The tax is assessed annually for the period 1 January to 31 December.
Tax liability for the 2018 tax year will be based on vacancy in 2017.
The rate is 1 per cent of the capital improved value (CIV) of taxable land. The CIV value is displayed on the owner’s rate notice.
The property will be “vacant” if unoccupied for 6 months and this 6 months does not need to be continuous.
The State Revenue Office says that the tax is introduced to try and address the lack of housing supply;
There are some exemptions, including property used as a holiday home and occupied for at least four weeks by the owner or ownership of the property changes during the preceding year;
Mortgagees in possession are excluded and do not have to pay the tax to the State Revenue Office; and
It is a self-reporting tax, owners are required to notify the State Revenue Office.
If you own property in Melbourne that is located in inner or middle Melbourne and it has been vacant for 6 months (or will be), you should be aware of the introduction of the tax from 1 January 2018.
The contents of this publication is for reference purposes only. This blog post does not constitute legal advice and should not be relied upon. If you require legal advice please contact Sarah Ward at Aitken Partners on Ph: (03) 8600 6056 or firstname.lastname@example.org