By Morgan Collens
The new Victorian Premier, Jacinta Allan, has recently backed a proposed expansion to vacant residential land taxes.
During a Tuesday industry breakfast, the Victorian Treasurer, Tim Pallas, revealed a plan to introduce legislation to parliament later in the week, aiming to extend the vacant residential land tax to cover the entire state starting on January 1, 2025. Currently, this tax applies only to empty residential properties in Melbourne’s inner and middle suburbs that have remained vacant for six months or more, with a rate of 1% of the property’s total value, including buildings.
Additionally, a new tax will be introduced in 2026 for vacant residential land that has shown no improvement for five years or more in established metropolitan areas of Melbourne.
The focus for these changes appears to be the importance of not allowing metropolitan Melbourne’s vacant land to remain idle year after year, with an emphasis on the belief that landowners should either develop their land or sell it to those who will. Pallas also asserted that the government’s land holdings would be held to the same standard.
It is expected that approximately 600-700 additional homes will be affected by the tax expansion, generating an annual revenue of around $6 million. Notably, single-family holiday homes will remain exempt from these changes, and Pallas characterized the measures as modest, designed to discourage long-term land banking.
Stay tuned for further updates as more information becomes available.
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