🌏 The Reality for Property Owners in 2026
Victoria’s land tax reforms, first introduced under the COVID Debt Repayment Plan in 2024, continue to shape the way property owners, investors, and small businesses manage their assets.
While originally positioned as a temporary measure, the reduced thresholds and fixed surcharges remain in place through 2026 — meaning more Victorians are now paying land tax on property that was previously exempt.
You can review all current thresholds and rates directly at the
📘 State Revenue Office (SRO) – Land Tax Current Rates.
📊 What’s the land tax threshold in Victoria in 2026?
In 2026, Victoria's land tax threshold remains $50k ($25k for trusts/companies) for non-home landholdings, set by the 2024-2033 COVID debt plan.
From the 2024 land tax year, the threshold for general land tax on non-exempt land dropped to $50,000, and the lower threshold settings apply for 2024–2033 land tax years (which captures 2026).
For many owners, that means land tax can apply to holdings that would previously have sat under the old $300,000 threshold—particularly where land is held via an entity or structure that changes the effective threshold and surcharges.
What surcharges apply in 2026?
From 2024, extra flat surcharges ($500 or $975) and a 0.10% rate lift can apply, and absentee owners pay an added 4% on top.
1) COVID Debt Repayment Plan surcharges (still in force in 2026)
For the 2024–2033 land tax years, the SRO applies additional fixed charges (and for higher value brackets, a 0.10 percentage point rate increase) as part of the COVID Debt Repayment Plan settings.
2) Absentee owner surcharge (4% from the 2024 year onward)
If you meet the SRO’s definition of an absentee owner, the surcharge rate is 4% from the 2024 assessment year onwards, applied on top of general land tax (and any trust surcharge where relevant). This continues in 2026.
Does the Vacant Residential Land Tax apply in 2026?
In 2026, VRLT may apply to residential land across Victoria if it was vacant for over six months, and to metro unimproved land idle for five years.
🏙️ Vacant Residential Land Tax (VRLT) — Broader Reach Across Melbourne
From 1 January 2025, VRLT expanded to cover all of metropolitan Melbourne.
In 2026, that remains the case — meaning suburbs like Chadstone, Glen Iris, Malvern, and Bentleigh are fully included.
If your residential land is unoccupied for more than six months in a year, you may need to self-report via the SRO’s online portal.
New limb from 1 January 2026: undeveloped residential land in metropolitan Melbourne
From 1 January 2026, VRLT can also apply to land in metropolitan Melbourne that has remained undeveloped for a continuous period of five years or more and is capable of residential development (including certain land with partially built residences that have not been occupied).
A data point worth keeping in mind
The policy intent is to push idle stock into use. For context, the ABS reported 298,029 unoccupied private dwellings in Victoria (11.1%) on Census night 2021 (noting this is a point-in-time measure and includes non-“vacant investment” reasons).
📘 Learn more about VRLT on SRO Victoria
🏡 How does the short-stay levy affect hosts in 2026?
From 1 Jan 2025, a 7.5% short-stay levy applies to stays under 28 days in Victoria, usually collected by the platform or host.
The Short-Stay Levy continues through 2026.
This 7.5% surcharge applies to all stays under 28 consecutive days, across short-term platforms like Airbnb and Stayz.
Why it matters even if “the platform pays”: it still changes pricing, demand, and net returns (and you still need clean income/expense coding for tax compliance and reporting).
Property owners should:
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Include this levy in their cash flow forecasts.
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Ensure proper reporting alignment with ATO and GST obligations;
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Consider structural changes if managing multiple short-stay properties.
📘 SRO Victoria – Short-Stay Levy Overview
🧮 Impact on Small Business Owners and Investors
These reforms affect far more than just homeowners:
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Small businesses owning their trading premises may now exceed the lower thresholds.
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Developers holding vacant or underdeveloped land face increased ongoing costs.
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SMSFs and investment trusts must reassess structures to avoid cumulative surcharges.
Even a modest portfolio can now attract multiple SRO obligations, making proactive planning essential.
That’s where forecasting comes in.
Our 3-Way Forecasting integrates your profit & loss, balance sheet, and cash flow to reveal the real-world impact of every tax change before it hits your accounts.
🧾 Managing Your Land Tax Obligations
Property tax isn’t an isolated exercise — it affects your overall financial picture.
At 42 Advisory, we help Melbourne property owners align every piece of the puzzle:
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Property Tax & Investment Accounting — CGT, land tax and negative gearing strategies.
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Personal Tax Advisory — coordinating ownership structures and family holdings.
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Bookkeeping Services — ensuring rental income, expenses, and levies are correctly coded for compliance.
Together, these services help reduce unexpected SRO liabilities and strengthen after-tax returns.
💡 What You Should Do Before the Next SRO Assessment
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Log into the SRO portal to confirm your 2026 landholdings and usage status.
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Check for exemptions — construction, primary production, or principal residence may qualify.
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Model future years’ costs to plan for surcharges and levies.
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Seek proactive advice before restructuring or selling — timing and ownership matter.
✉️ Talk to 42 Advisory
If you hold property in Melbourne or the south-east, a 2026 review should connect structure, land tax, vacancy exposure, and cash flow—not treat them as separate issues.