Exemptions to the vacant residential land tax – an update for holiday homeowners
Written By Kathleen Jess and John Ginnane.
On 14 May 2024 further details were provided about changes to the Vacant Residential Land Tax (VRLT). We provided an overview of how the reforms could impact holiday homeowners in our article here.
Since our previous update, the Victorian Government have released details of wider exemptions for holiday home held by discretionary trusts, unit trusts and companies.
Where a holiday home is held by a discretionary trust, unit trust or company, an exemption from the VRLT is available where a specified beneficiary of the discretionary trust, unit holder of the unit trust or shareholder of the company (or the relative of a specified beneficiary, unit holder or shareholder) has occupied the holiday home for at least four weeks in the year preceding the tax year. This four-week occupation period may be continuous or aggregate.
This exemption only applies to properties where the trust or company held the property or entered into a contract to purchase the property on or before 28 November 2023 and has held that property continuously since that date.
In addition, the specified beneficiaries of the trust, unit holders or shareholders must not have changed since before 28 November 2023, or the date of settlement agreed to before 28 November 2023, save for changes to add or remove relatives as beneficiaries, unit holders or shareholders (although such changes must be made with advice and caution).
Holiday homeowners must satisfy the SRO Commissioner that the property was used as a holiday home during the relevant period and the Commissioner will consider factors such as the location of the land, frequency of use and distance from the beneficiaries.
