As 2025 draws to a close, Victorian property owners and landholders should review their notification obligations with the State Revenue Office (SRO) due by 15 January 2026.
Failure to lodge notifications on time can trigger penalty tax ranging from 5% to 90%, depending on whether the SRO has commenced an investigation, a voluntary disclosure has been made, or if there has been concealment or hindrance during the investigation.
Recent amendments to section 30 of the Taxation Administration Act 1997 (June 2025) allow the Commissioner to increase the penalty from 25% to 50% for notification defaults caused by recklessness.
Key Notifications Due 15 January 2026
Vacant Residential Land Tax (VRLT) Notification
Overview: VRLT was introduced in 2018 to encourage property occupation and increase housing supply in Victoria. It applies a 1%–3% tax on the capital improved value (CIV) of vacant residential properties, unlike land tax, which is based only on land value.
New for 2026: From 1 January 2026, VRLT will also apply to undeveloped land in Metropolitan Melbourne that is capable of residential development and has remained undeveloped for 5 continuous years or more. This includes vacant land, partially built homes, and abandoned apartment units.
Who must notify: Victorian residential property owners (except Alpine resort properties) must notify the SRO if, as at 31 December 2025 any of the following applies:
- The property was vacant for over 6 months in 2025.
- The property has been under construction or renovation for 2+ years.
- The property has been uninhabitable for 2+ years.
- The property is undeveloped land in Metropolitan Melbourne for 5+ years.
Exemptions: – Properties already exempt from land tax are generally exempt from VRLT. – Other exemptions include holiday homes, newly developed properties, and properties transferred in the preceding year. > Note: VRLT exemption claims must be submitted via the SRO online portal at the time of notification.
Ongoing notifications: Once a notification is lodged, a new notification is required only if the property circumstances change.
Absentee Owner Status (AOS) Notification
Overview: The Absentee Owner Surcharge (AOS) is an additional 4% land tax applied to foreign (absentee) owners of Victorian properties. Unlike VRLT, it applies to both residential and commercial properties, using taxable land value as the base.
Who counts as a foreign/absentee owner: – Individuals who are not Australian citizens or do not hold a permanent visa. – Companies controlled by foreign shareholders. – Trusts with foreign specified beneficiaries or unitholders.
Who must notify: All absentee owners must notify the SRO of their status via the online portal by 15 January 2026.
Exemptions: AOS exemptions are limited and generally only apply to large-scale development projects that contribute significantly to the Victorian economy during the development phase. Passive investors or landlords are not eligible.
Next Steps for Property Owners
- List your landholdings in Victoria.
- Review the vacancy status, construction status, and ownership structure of each property.
- Identify any changes in circumstances that may trigger VRLT or AOS notifications.
- Submit notifications via the SRO online portal by 15 January 2026 to avoid penalties.
Early review and timely submission help prevent unnecessary penalty tax and ensure compliance with the updated 2026 rules.
If you need any assistance, please reach out to your HLB Mann Judd tax advisor.
Co-authored by Monika Lam, Tax Manager, HLB Mann Judd Melbourne