Owners of vacant homes in Melbourne’s inner and middle-ring suburbs will be slugged with an extra Vacant land tax Victoria, in a bid to free up more housing.
From 1 January 2018, the new 1% Vacant land tax Victoria will apply to properties in 16 councils that have been “deliberately left vacant without a good reason” for more than 6 months in a calendar – and it does not have to be for a continuous 6 months.
The tax rate will be 1 % of the property’s capital-improved value rather than its overall worth, and is different to the land tax, the absentee owner surcharge and the federal annual vacancy fee.
The government expects to raise $80 million over four years. At least 24,000 were “demonstrably occupied” in 2014, according to a Prosper Australia study.
The Vacant land tax Victoria is among a suite of changes the government has announced to make housing more affordable in Victoria, including scrapping stamp duty for first-home buyers on properties worth up to $600,000.
Premier Daniel Andrews warned property owners against “land banking”.
“This is a common sense change,” Mr Andrews said. “If your property is lying dormant, empty, if it’s not available, we need it to be.”
The new policy has come under fire, as it relies on property owners to notify the State Revenue Office of any vacant properties they own.
But Mr Andrews said failing to report would attract “very significant” penalties, and there were opportunities, such as utilities data, for the SRO to check on compliance.
At the time of the announcement, Launch Housing chief executive Tony Keenan praised the new policy, but stressed any money raised should go to social housing.
“We can’t have large numbers of vacant houses during a time of housing crisis,” he said.
Exemptions to Vacant land tax Victoria
The new policy will not apply to holiday homes (owned by those with a principal place of residence in Australia, city units used for work, deceased estates or homes owned by Victorian who move temporarily overseas. But it will include short-term rental, including Airbnb properties, that will need to be occupied for more than half the year.
Municipal councils to which the Vacant land tax Victoria applies
The Vacant land tax Victoria will apply to empty homes in Banyule City Council, Bayside City Council, City of Boroondora, City of Darebin, Glen Eira City Council, Hobsons Bay City Council, Manningham City Council, Maribyrnong City Council, City of Melbourne, City of Monash, City of Moonee Valley, Moreland City Council, City of Port Phillip, City of Stonnington, City of White Horse and Yarra City Council.
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