The third and final part of this series discusses the Vacant Residential Property Tax (VRPT), a new proposal by the Victorian government to address lack of rental supply. Specific details are still under consideration as the Victorian government consults property groups for further insight.
Who does this effect?
The Vacant Residential Property Tax will be levied on vacant properties located in designated residential areas as listed here (Link: http://www.sro.vic.gov.au/node/5816 ). To qualify as a vacant property, it must be unoccupied for more than 6 months in total over the calendar year.
The tax will be an annual amount of 1% of Capital Improved Value (CIV) of each taxable property. Capital Improved Value is the value of land and buildings as determined by a valuation process conducted biannually by local councils.
Holiday homes, city units for work purposes, properties of deceased estates and homes subject to legitimate temporarily absences are exempt from the Vacant Residential Property Tax.
The tax is proposed to apply from 1 January 2018 onwards and will be self-reporting. In other words, the onus will be on the owners of vacant properties to report their situation to the State Revenue Office (SRO). For further details and future updates, the State Revenue Office website (Link: http://www.sro.vic.gov.au/node/5816) has more information.