About the initiative
​Property owners that keep their property vacant effectively withdraw supply of occupiable properties from the market, thereby increasing pressure on prices and rents. The Vacant Residential Property Tax is intended to encourage these owners to make their property available for purchase or rent, allowing Melbourne’s current housing stock to be used efficiently.
The tax will apply to the inner and middle areas of Melbourne, where the issue of housing affordability is most pressing. There will be a number of practical exemptions applied, recognising there are some legitimate reasons for a property being left vacant. The framework for the tax will be subject to consultations with property groups and the community.

When does the Vacant Residential Property Tax start?
The Vacant Residential Property Tax will apply from 1 January 2018. The transition arrangements for 2017 will be subject to consultation. How will vacancy be reported? The tax will be incorporated into the land tax legislative framework. Consistent with this framework, liability for the vacant residential property tax is self-reporting. That is, property owners are expected to inform the State Revenue Office when their property triggers the tax. The State Revenue Office will also undertake monitoring and compliance activities.

How is the Vacant Residential Property Tax calculated?
The Vacant Residential Property Tax will be a 1 per cent tax on the capital improved value of the taxable property. The capital improved value of a property is the value of land and buildings as determined every second year as part of the council valuation process. The capital improved value of your property is displayed on your council rates notice.

For example,
if the taxable property has a capital improved value of $500,000, the applicable tax will be $5,000.

Who will have to pay the Vacant Residential Property Tax?
The Vacant Residential Property Tax will only apply to the owner of a property that is unoccupied for more than six months within a calendar year. The details of the tax are still subject to consultations with stakeholders. Are there any exemptions? There will be a number of practical exemptions applied, recognising there are some legitimate reasons for a property being left vacant. These include properties used as holiday homes by those with a separate principal place of residence, those who need a city unit for work purposes, deceased estates, and homes owned by Victorians who are temporarily overseas. The list of exemptions will be finalised in consultation with industry and property groups.

Does the Vacant Residential Property Tax apply to all properties in Victoria?
The Vacant Residential Property Tax will only apply to vacant properties located in the inner and middle suburbs of Melbourne. Any vacant properties outside this area will not be subject to the tax. The local council areas where the tax is applicable is listed in Table 1, below. Table 1: Local council areas where the Vacant Residential Property Tax will be applicable
Banyule
Bayside
Boroondara
Darebin
Glen Eira
Hobsons Bay
Manningham
Maribyrnong
Melbourne
Monash
Moonee Valley
Moreland
Port Phillip
Stonnington
Whitehorse
Yarra

How can I find out more?
​ There will be a period of consultation with industry bodies over the coming weeks to ensure the final design of the Vacant Residential Property Tax is appropriately targeted. Once the consultation process is complete, more detailed information about the tax will be announced.

​About this initiative:
From 1 July 2017, first home buyers purchasing properties valued below $600,000 will be exempt from
paying stamp duty. Further, first home purchases valued between $600,000 and $750,000 will receive a concession applied on a
sliding scale. It will be available for new and established home purchases. This initiative gives first home buyers across the state a
helping hand, by substantially reducing the upfront cost of purchasing a home. How will it work? The exemption and concession
are available for new and established home purchases and will be applicable to contracts signed from 1 July 2017. What are the
criteria to qualify for an exemption or concession? • The home must have a dutiable amount of less than $600,000 to receive
a stamp duty exemption. • A concession applies on a sliding scale for purchases with a dutiable amount between
$600,000 and $750,000. • The dutiable amount of a property is generally the greater of the purchase price or market value,
​minus any deductions (such as a deduction for an off-the-plan the purchase). • The purchaser and the purchaser’s partner must be
first home buyers, consistent with the definition under the First Home Owner Grant Act 2000. •
The purchaser must be an Australian citizen or permanent resident (New Zealanders holding a special category visa are
considered permanent residents if they are in Australia at the time of settlement). • The purchased property must be used as the purchaser’s principal place of residence for a continuous period of 12 months, commencing within 12 months of possession of the purchased property. Prospective first home buyers can contact the State Revenue Office on 13 21 61 to find out more about their eligibility. How many people will be helped?

Around 25,000 first home buyers will benefit each year and be able to contribute more towards the equity of their home and reduce
their mortgage payments. 

How can I find out more? First home buyers purchasing property valued up to $750,000 will need to fill the appropriate

documentation when completing the purchase. (For more information on applying for the concession,
contact the State Revenue Office on 13 21 61 or visit http://sro.vic.gov.au/first-home-owner.) The exemption and
​concession are in addition to the First Home Owner Grant (FHOG) (for more information on the FHOG, see the FHOG Fact Sheet on www.sro.vic.gov.au).

About this initiative
From 1 July 2017, the off the plan stamp duty concession will only be available for those who qualify for the principal place of residence stamp duty concession or the first home buyer stamp duty exemption/concession. The concession will no longer be available for other purchases, such as residential investment properties and commercial properties.
This gives owner-occupiers a competitive advantage against investors, and aligns with the Government’s goal of supporting first home buyers. The Government is using the savings from this initiative to fund the changes to stamp duty for first home buyers.
What is the off the plan stamp duty concession?
The off the plan stamp duty concession deducts from the contract price the cost of any construction or refurbishment which occurs on or after the contract date.
This means that the dutiable amount is the value of land and improvements as at the contract date. For example, for the purchase of a house and land package, where construction has not commenced, stamp duty is levied on the land component of the property only, thereby substantially reducing a buyer’s stamp duty liability.
How will the initiative work?
For contracts entered into from 1 July 2017, only property purchasers who intend to live in their property will be eligible for the off the plan stamp duty concession. These are property purchasers who are eligible for:

• a first home buyer stamp duty concession or exemption (available for purchases with a dutiable value of up to $750,000); or
• a principal place of residence stamp duty concession (available for purchases with a dutiable value of up to $550,000).

Example: a couple decides to downsize and buy a new apartment in an apartment block, with land value of $100,000 and a purchase price of $400,000, where construction has not commenced. The value of the land plus improvements at the contract date (the dutiable amount) is $100,000. This is below the principal place of residence threshold of $550,000, meaning the purchaser is eligible the off the plan stamp duty concession.

Further information is available on the State Revenue Office website at www.sro.vic.gov.au.