Vacant Residential Land Tax Victoria 2026-27
If you own a second home, an investment property or a holiday house in Victoria, the Vacant Residential Land Tax (VRLT) is one of the rules to keep on your radar. The 2026-27 Victorian Budget did not announce any new VRLT measures. Existing settings continue, including the state-wide application from 2025 and the holiday home exemption. This guide sets out what the Budget says about VRLT, and points to the State Revenue Office for specific rates and tests.
What is the Vacant Residential Land Tax?
VRLT is an annual tax on residential land in Victoria that has been vacant for more than six months in the preceding calendar year. It sits alongside ordinary land tax and the COVID Debt Levy, and is administered by the State Revenue Office (SRO). Rates, exemption tests and self-notification rules are set out at sro.vic.gov.au. The 2026-27 Budget Papers refer to VRLT as an existing measure and do not restate the rate detail.
The 2026-27 Budget: no new VRLT measures
The 2026-27 Victorian Budget did not announce any change to the Vacant Residential Land Tax. There are no new rate increases, no new exemptions and no scope adjustments in this Budget. VRLT continues under settings already legislated, with the holiday home exemption preserved. (BP5 Ch.4; BP5 p.196 Table 5.2; p.198 note (b)). For a wider summary of property tax settings in the Budget, see the Victorian Budget 2026-27 property guide.
State-wide application (already in force from 2025)
VRLT was expanded to all of Victoria from 2025. That expansion is an existing measure, not a 2026-27 Budget change. Owners of vacant residential land outside inner Melbourne are within scope under the state-wide settings already in force. The 2026-27 Budget makes no further change to the geographic reach of the tax. (BP5 p.196 and note (b) p.198).
Holiday home exemption: continues
The holiday home exemption continues under the 2026-27 Budget. The exemption applies where the conditions set by the SRO are met (including occupation requirements). The Budget Papers list the holiday home exemption as a continuing tax expenditure, with revised forgone revenue figures. The eligibility tests, including the occupancy test for holiday homes, are administered by the SRO. The Budget does not restate or alter those tests. (BP5 p.196 Table 5.2; p.198 note (b)).
The numbers: forgone revenue from the holiday home exemption
The 2026-27 Budget estimates $567 million in forgone revenue for 2026-27 from the holiday home exemption to the Vacant Residential Land Tax. That figure is the Treasury’s estimate of revenue not collected because of the exemption, not a tax paid by anyone. It is published in BP5 Table 5.2 (p.196) with the supporting note at p.198 (note b). The figure reflects the state-wide scope of VRLT and is larger than in earlier Budgets that covered inner Melbourne only.
How VRLT interacts with land tax
VRLT is separate from ordinary land tax and from the COVID Debt Levy on landholdings. A property may be subject to one, two or all three of these depending on its use, value and ownership. VRLT is calculated on the same capital improved value information used for land tax assessments, with 2026-27 assessments based on Valuer-General Victoria valuations between 1 January and 31 December 2025. (BP5 p.175-176). Tax notices are issued by the SRO.
What property owners should check before 1 January each year
VRLT liability is assessed on the calendar year. For owners of second homes, holiday houses and investment property, the SRO publishes the self-notification requirements and exemption criteria at sro.vic.gov.au. The 2026-27 Budget does not alter the assessment date or the notification framework. Owners who acquire residential land mid-year, or whose use of a property changes, should review the SRO guidance before the next assessment. For settlement-stage advice on a specific property, our house conveyancing team can help.
Frequently asked questions
Did the Vacant Residential Land Tax change in the 2026 Victorian Budget?
No. The 2026-27 Victorian Budget did not announce any new VRLT measures. Existing settings continue, including the state-wide application from 2025 and the holiday home exemption. (BP5 Ch.4; BP5 p.196 and p.198 note (b)).
Where does VRLT apply in Victoria?
VRLT applies state-wide. The expansion from inner Melbourne to all of Victoria took effect from 2025 and is an existing measure. The 2026-27 Budget makes no further change to the geographic scope. (BP5 p.196 and note (b) p.198).
What is the holiday home exemption for VRLT?
The holiday home exemption is a continuing exemption from VRLT, subject to conditions administered by the State Revenue Office. The 2026-27 Budget retains the exemption and lists it in Table 5.2 with $567 million in forgone revenue for 2026-27. The specific occupancy and use tests are at sro.vic.gov.au. (BP5 p.196; p.198 note (b)).
How much does VRLT cost?
The Budget Papers do not restate the VRLT rate structure. For the current rate, escalation rules and how the tax is calculated on a specific property, refer to the State Revenue Office at sro.vic.gov.au.
Do I need to notify the SRO if my property is vacant?
Self-notification requirements for VRLT are set by the State Revenue Office. The 2026-27 Budget did not change those requirements. Owners should review the current notification rules at sro.vic.gov.au.
Does VRLT interact with the foreign purchaser rules?
VRLT and the Foreign Purchaser Additional Duty are separate. Both continue unchanged under the 2026-27 Budget.
Speak to Tick Box about your property
Your Journey, Our Expertise. Conveyancing does not have to be a daunting, complicated process. If you are buying, selling or holding residential land in Victoria and want to understand how VRLT, land tax and the COVID Debt Levy fit together at settlement, Tick Box Conveyancing can help. Get an instant quote online, or contact us to discuss your matter.
This article summarises the Victorian Budget 2026-27 as published on 5 May 2026. It is general information, not legal advice. For matters specific to your transaction, contact Tick Box Conveyancing.
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