Webinar Recap: The New Property Tax Era: What 2026 Means for You

Property Law,Tax Law: 19 March 2026

Author: Julie Maxfield, Marco Saccotelli - Our People

Our webinar provided clear insights into Victoria’s evolving property tax landscape and key compliance essentials for property owners

Aitken Partners’ March 2026 Breakfast Seminar offered an in‑depth look at Victoria’s rapidly evolving property tax landscape, including new statewide rules, audit activity, valuation challenges and what owners need to do to remain compliant.

Vacant Residential Land Tax: Expansion, Exemptions and Enforcement

The first major topic centred on the expansion of the Vacant Residential Land Tax (VRLT) in Victoria. Previously limited to selected inner Melbourne council areas since 2018, the VRLT now applies across Victoria. Importantly, the tax no longer targets only established dwellings, certain residential growth zones within Melbourne also capture undeveloped residential land that remains unused for more than five years.

A clear message from the panel was that many property owners remain unaware of the breadth of these changes, while the State Revenue Office (SRO) has concurrently increased its compliance activity.

The panel covered exemptions available under the VRLT framework, including:

• Holiday homes, provided they are used for at least four weeks each year, with usage able to be shared among family members and friends.
• Deceased estates, which attract an exemption for up to three years.
• Contiguous land used for genuinely private and recreational purposes, such as tennis courts or pools held on separate titles.
• Land incapable of residential development, including land affected by contamination or restrictive covenants.
• Properties undergoing substantial renovation, where the dwelling is legitimately uninhabitable.

What the SRO checks

Victoria’s VRLT compliance program now draws on multiple data sources to test whether a property is genuinely occupied for more than 6 months or vacant. These may include:

• Utility and water usage
• Electoral roll data
• Rental bond information
• Public property listings such as Airbnb
• Social media activity
• Real estate websites
• ATO address and tax file number records

Owners who rely on the holiday home exemption are encouraged to keep practical records, grocery receipts, photos, utility bills to demonstrate regular use.

Short stay accommodation and the ‘layering’ effect

Short‑stay accommodation providers should be particularly attentive. A single property can attract a combination of charges including:

• The short‑stay levy
• Land tax
• The VRLT

This layering can happen if usage conditions are not satisfied and can create financial consequences for owners who do not track use or occupancy patterns closely.

Land Tax Assessments and Objections in 2026

Land tax assessments for 2026 have introduced another set of challenges, particularly as valuations fluctuate across Victoria.

Understanding the assessed values

Victorian land tax notices set out three values:

• Capital Improved Value (CIV)
• Site Value
• Net Annual Value (NAV)

Land tax is calculated on the site value, the unimproved value of the land. Importantly, site value does not always reflect market value, which can lead to confusion, especially when land values increase despite softening market conditions.

The 60‑day objection timeframe

Owners must be mindful of the strict 60‑day objection period. Once expired, opportunities to challenge the assessment become extremely limited. Property owners should review notices promptly, especially where:

• Valuations appear unexpectedly high
• Exemptions have not been applied
• Ownership details or apportionment are incorrect

Escalation, evidence and the role of valuers

While an objection can be lodged initially without supporting documentation, any challenge to valuation will ultimately require evidence from a certified property valuer. If an objection is disallowed, owners have 30 days to escalate to VCAT.

Recent court developments have added further uncertainty. A High Court decision relating to how heritage restrictions and improvements affect site value has created inconsistency across valuations and a more cautious approach from industry professionals.

Commercial and Industrial Property Tax Reform Act 2024: Key Considerations

The introduction of the Commercial and Industrial Property Tax Reform Act 2024 marks a major shift in how commercial properties are taxed in Victoria.

Under the reform:

• The first transaction on or after 1 July 2024 involving more than 50% ownership, whether by direct acquisition or via landholder transaction, brings the property into the new tax system.
• Stamp duty is still payable on that first “entry transaction”.
• During a 10 year period commencing from entry into the tax reform scheme land rules, no further duty is payable upon a disposal of land
• After a 10 year transition period, stamp duty is replaced with an annual 1% property tax, calculated on site value (on top of existing land tax).
• The tax attaches to the property, not the owner, meaning future purchasers inherit the balance of the transition period.

Market response to these changes remains in its early stages, however experts expect this to accelerate as properties move toward the middle of the 10 year transition period.

Key Takeaways

Across VRLT expansion, tighter land tax assessments and the new commercial property tax regime, the clear message is awareness and preparation. Owners who understand how existing and new measures overlap, keep accurate records, review assessments early and stay proactive about compliance (including by promptly notifying the SRO of exemptions or changes of use by 15 February each year) will be best placed to minimise risk and avoid unexpected liabilities as the tax landscape continues to evolve.

(Disclaimer: this article is intended to be general in nature, and content does not constitute advice. We recommend seeking expert guidance on your specific tax situation and requirements before making decisions.)

If you have any questions, please get in touch with our expert team:

• Moderator, Ric Birkett, Principal Lawyer, Aitken Partners
• Julie Maxfield, Principal, Aitken Partners
• Marco Saccotelli, Special Counsel, Aitken Partners
• Chris Nicodimou, Managing Director, Sallmanns International

Click below to watch the webinar recording: