New legislation introduced to exempt holiday homes held via family trusts from the Vacant Residential Land Tax (VRLT)


Earlier in March this year, we reported that the Victorian Government had passed legislation to extend the reach of the VRLT, which is very broadly an annual tax of 1% based on the capital improved value of residential properties that are left vacant for more than 6 months in a year. Vacant land and holiday homes in Victoria: VRLT ( These new rules apply from 1 January 2025.

In broadening the reach of the VRLT, the new legislation resulted in holiday homes (properties resided for holiday home purposes at least 4 weeks of the year) only being able to be exempt from the VRLT if the property was held in an individual’s name. This was a significant adverse outcome as it is common for asset protection purposes to hold properties in trusts.

In welcome news, after significant lobbying from property industry groups the Victorian Government has introduced legislation to extend the holiday homes exemption to properties held in trusts and companies.


Whilst there are key requirements in order for the holiday homes exemption for family trusts to apply, we consider the requirements are not overly onerous for genuine holiday homes. The requirements are as follows:

  • The owner of the land has been the owner of the land continuously since 28 November 2023, or since a later date if the owner became the owner at that date under a contract for the purchase of the land entered into on or before 28 November 2023; and
  • There has been no change in beneficial ownership of the land since the date referred to above, except for a change involving persons who are relatives of one another; and
  • A specified beneficiary of the trust who is a natural person or a relative of that person, in the year preceding the tax year, used and occupied other land in Australia as a principal place of residence;
  • In the year preceding the tax year, the land has been used and occupied as a holiday home for a period of at least 4 weeks (whether continuous or aggregate) by a specified beneficiary of the trusts or a relative of that person; and
  • The Commissioner is satisfied that the land was used and occupied as a holiday home in the year preceding the tax year (broadly having regard to the location of the land compared to the principal place of residence and the nature and frequency of the use of land).

There are also extended exemptions for holiday homes held via companies and unit trusts with broadly similar exemption criteria requirements but as ownership via these structures in the Author’s experience is less common, we have not sought to cover these exemptions further.


Whilst the above extended exemption for holiday home is welcomed, it is important to review the exemption requirements and it is likely that any exemption would need to be notified to the SRO via the VLRT by 15 January the following year.