Understanding the Vacant Property Tax is important for all homeowners.
The housing affordability debate came back into light this week, with the Victorian Government announcing a vacant property tax across some of Melbourne’s most popular suburbs.
Councils subject to the new Vacant Property tax.
In a recent fact sheet published by the Victorian Government, The Vacant Residential Property Tax will target some of the estimated 82,000 homes sitting vacant across Melbourne which accounts for close to 5% of Melbourne’s total housing stock. The government hopes this tax will encourage the owners to put these properties back into the market, making them available to rent or sell to alleviate some of the strains on the housing market.
Although the final details of the tax are still being discussed, it is clear that it will take effect of the 1st January, 2018 and will only apply to properties that are unoccupied for 6 months or longer within a calendar year. The 1% levy, will be calculated against the capital improved value of the property which is set by the council and issued to home owners on their rates notice.
Being a self-reporting tax, the liability will fall on home owners to report but the State Revenue Office has suggested that it will also ‘undertake monitoring and compliance activities’. This could mean checking utility records to identify properties with very low usage or potentially inspecting suspected properties.
The fact sheet released by the Victorian Government also noted some exemptions from the tax, including holiday homes, deceased estates and homes owned by Victorians who are temporarily overseas.
Do you think this tax will be effective?