If you own property in Victoria , whether residential or commercial, individually or in a trust – the 2024–25 land tax changes may significantly impact your tax position. With the introduction of the COVID Debt Repayment Surcharge, the expansion of the Vacant Residential Land Tax, and the new Commercial and Industrial Property Tax (CIPT), it’s crucial to stay informed and plan ahead.

In this article, we break down the key land tax changes in Victoria and what they mean for property owners, investors, and trusts.

🧾 COVID Debt Repayment Surcharge (Now Active)

Introduced by the Victorian Government in 2024, the COVID Debt Repayment Surcharge is an annual levy added to existing land tax bills to help repay pandemic-related state debt.

💡 Who does it apply to?

• Landowners with taxable landholdings over $50,000

• For trusts, the threshold is just $25,000

💰 Surcharge amounts:

• $500 (land value $50,000–$100,000)

• $975 (land value $100,000–$300,000 or $250,000 for trusts)

• $975 plus 0.10% of land value if holdings exceed $300,000 (or $250,000 for trusts)

This surcharge applies annually from 2024 to 2033. You can find out more information here.

🏢 Commercial and Industrial Property Tax (CIPT) — Starts 1 July 2024

The Commercial and Industrial Property Tax (CIPT) will replace stamp duty on future transactions involving commercial and industrial properties purchased after 1 July 2024.

How it works:

• The first purchaser still pays stamp duty.

• Future owners will pay a 1% annual tax on the site (land-only) value instead of stamp duty.

👉 Existing owners are not affected unless they sell.

🏠 Vacant Residential Land Tax Expands Statewide in 2025

The Vacant Residential Land Tax (VRLT) will apply across all of Victoria from 1 January 2025.

When it applies:

• Properties that are vacant for more than 6 months in a calendar year.

Rates:

• 1% of capital improved value (CIV) in year one

• 2% in year two

• 3% in year three and beyond

This includes holiday homes, investment properties, and inherited land not used as a residence.

More information can be found here.

⚠️ Land Tax Apportionment at Sale Now Banned

From 1 January 2024, land tax can no longer be passed on to the buyer during property settlement for:

• Residential or commercial properties under $10 million

• Contracts signed on or after that date

This change affects both investors and developers — and could shift negotiations at settlement.

More information can be found here.

✅ What Should Victorian Property Owners Do?

To stay compliant and optimise outcomes:

• Review your 2024–25 land tax assessments

• Factor in the new COVID surcharge in your tax planning

• Plan property sales carefully to avoid unintended CIPT entry

• Watch for VRLT risks with investment and holiday properties

We hope you’re enjoying our blog, just a note though. The information provided here is intended for general informational and educational purposes only. While we aim for accuracy, we can’t guarantee that this content will apply to your specific situation, every business owner’s circumstances are unique.

This blog is not a substitute for personalized advice from a qualified accountant, tax advisor, or any other professional. If you have questions specific to your individual circumstances, we strongly recommend consulting a professional for tailored advice.