Victoria’s new vacant house tax and agricultural housing

A vacant house tax will be broadened from inner Melbourne to regional Victoria. So what does it mean for rural property owners?

A regional rollout of a tax on vacant and undeveloped properties will not hit farmhouses, following concerns from agricultural advocates.

State Treasurer Tim Pallas last week declared a levy on Melbourne homes left vacant for more than six months would be expanded statewide, taking some in his party by surprise.

“Our clear message to landowners is to either develop the land or sell it to someone who will,” Mr Pallas told the Property Council last week.

Currently, only houses in Melbourne’s inner and middle-ring suburbs attract the vacant residential land tax, but the Allan government will expand the charge to include the whole state from January 2025.

Premier Jacinta Allan (left) speaks to Treasurer of Victoria Tim Pallas (right) at Victorian Parliament House on October 03, 2023 in Melbourne, Australia. Picture: Asanka Ratnayake

Victorian Farmers Federation president Emma Germano wrote to Mr Pallas calling for clarity, noting many farmers were unable to keep farmhouses occupied throughout the year.

But a spokesman for the Treasurer said the statewide rollout would provide exemptions for agricultural housing as well as holiday homes.

“We know the only way to improve housing affordability is to increase supply and this is about providing Victorian families, couples and individuals with more options,” the Treasurer’s spokesman said.

“We are extending the vacant residence policy that has successfully returned homes to the market in Melbourne – encouraging more owners to make their dwellings available for rent or sale across all of metropolitan Melbourne and in regional Victoria.

“Existing exemptions will continue to apply across the state, including to land used for primary production, holiday homes, properties recently acquired or regularly occupied for work purposes, and properties being built or renovated.”

National Party state leader Peter Walsh said while agricultural exemptions may apply, many regional property owners would be unfairly targeted by the tax.

“In country towns, where there is a house that is unoccupied, my reading of this is (that the new tax) would fall into this category,” Mr Walsh said.

“The overall concern is when a Labor government runs out of money, they come looking for everyone else’s money. It may not be a problem in this bill, but after recent conduct, you wonder what plans they have in the future for rural property owners.”

Originally published as Victoria’s new vacant house tax and agricultural housing