24th July 2019: Policy Changes for Vacant Properties in Victoria

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DID YOU KNOW?

From 1 January 2018, the Vacant Residential Property Tax (VRPT) has been levied on dwellings that are vacant for more than a total of six months in a calendar year.

This is self-reporting. The owners of vacant residential property will be required to notify the Australian Taxation Office (ATO) and the State Revenue Office (SRO) of any vacant properties that they own.

Annual Vacancy Fee – ATO

Under the legislation, foreign owners of residential dwellings in Australia are required to pay an Annual vacancy fee in their dwellings is not residentially occupied or rented out for more than 183 days in a year and a Vacancy Fee Return must be lodged with the ATO within 30 days of the end of each vacancy year.

If you are a foreign owner of residential dwellings and made a foreign investment application for residential property, or purchased under a new dwelling exemption certificate that a developer applied for after 7:30pm AEST on 9 May 2017, you must lodge a Vacancy Fee Return regardless the dwelling is residentially occupied or not.

If a vacancy fee return is not lodged on time, the foreign owner is taken to be liable to pay a vacancy fee regardless of the number of days during the vacancy year on which the dwelling was residentially occupied. ATO does not deem short stay rental arrangement (i.e. AirBNB, etc) to be residentially occupied and would be liable for an annual vacancy fee.

Vacant Residential Land Tax – Victoria SRO

This applies to residential dwelling in following municipal areas in Victoria that were vacant for more than six months in the preceding calendar year:

• Banyule
• Melbourne
• Bayside
• Monash
• Boroondara
• Moonee Valley
• Darebin
• Moreland
• Glen Eira
• Port Phillip
• Hobsons Bay
• Stonnington
• Manningham
• Whitehorse
• Maribyrnong
• Yarra

If you own a property in the inner and middle Melbourne that was unoccupied for more than six months during a calendar year, you are required to notify the State Revenue Office (SRO) by 15 January of the following year using their online portal. You have to do this although the property might be available for rental for the whole year.

Failure to advise State Revenue Office means that you may be liable for penalty tax.

If you believe you are required to lodge any of the above, please contact the Fletchers team to assist.