🌏 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 Changed Since the $300,000 Threshold Was Removed
From 1 January 2024, the tax-free threshold for land that’s not your primary residence dropped from $300,000 to $50,000 (or $25,000 for land held in a trust or company).
As of 2026, these settings remain in force.
In addition:
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The Absentee Owner Surcharge doubled from 2% to 4%, continuing in 2026.
This means even small-scale property owners, self-managed super funds (SMSFs), and business operators with commercial holdings now face higher annual SRO assessments.
🏙️ 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.
📘 Learn more about VRLT on SRO Victoria
🏡 Short-Stay Levy — 7.5% Surcharge on Airbnb & Holiday Rentals
Introduced in 2025, the Short-Stay Levy continues through 2026.
This 7.5% surcharge applies to all stays under 30 consecutive days, across short-term platforms like Airbnb and Stayz.
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, now’s the time to review your 2026 position.