Land Tax in Victoria: Rates, Thresholds and Surcharges (2025-26)
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Primary tax-year context: 2025-26
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General information only. This is not tax or financial advice. Consult a registered tax agent for advice specific to your situation.
Victoria has some of the most complex land tax rules in Australia, with multiple surcharges that can stack on top of the general rates. If you own investment property, holiday homes, or land held in trusts in Victoria, understanding the 2025-26 rate structure is essential for budgeting your annual holding costs.
How Victorian land tax works
Land tax in Victoria is an annual tax on the total taxable value of all land you own in the state as at 31 December of the year before the tax year. For the 2025-26 land tax year, the relevant valuation date is 31 December 2024.
Key points:
- Land tax is assessed on the unimproved value (site value) of the land, not the total property value including buildings
- All taxable land you own is aggregated — the tax is calculated on the combined value, not each property individually
- Your principal place of residence is exempt (see below)
General land tax rates (2025-26)
These rates apply to individuals and companies (not trusts):
| Taxable Land Value | Tax Rate |
|---|---|
| $0 - $50,000 | Nil (tax-free threshold) |
| $50,001 - $100,000 | $500 + 0.1% of amount above $50,000 |
| $100,001 - $300,000 | $550 + 0.2% of amount above $100,000 |
| $300,001 - $600,000 | $950 + 0.5% of amount above $300,000 |
| $600,001 - $1,000,000 | $2,450 + 0.8% of amount above $600,000 |
| $1,000,001 - $1,800,000 | $5,650 + 1.25% of amount above $1,000,000 |
| $1,800,001 - $3,000,000 | $15,650 + 1.75% of amount above $1,800,000 |
| $3,000,001 and above | $36,650 + 2.55% of amount above $3,000,000 |
COVID debt levy (temporary surcharge)
Victoria introduced a temporary land tax surcharge to help repay COVID-era debt. For 2025-26, this adds:
- $500 flat plus 0.05% of taxable land value for holdings between $50,000 and $100,000
- $975 flat plus 0.05% of taxable land value for holdings between $100,001 and $300,000
- Increasing increments for higher land values
The levy is built into the general rate tables above for 2025-26 and is scheduled to remain in place until 2033-34.
Trust surcharge rates (2025-26)
Land held in a trust (including discretionary, unit, and fixed trusts) faces a lower tax-free threshold and higher marginal rates. This is because trusts can be used to split income among multiple beneficiaries, and the State Revenue Office applies higher rates to offset that flexibility.
| Taxable Land Value (Trust) | Tax Rate |
|---|---|
| $0 - $25,000 | Nil (trust tax-free threshold) |
| $25,001 - $50,000 | $82 + 0.075% of amount above $25,000 |
| $50,001 - $100,000 | $101 + 0.1% of amount above $50,000 |
| $100,001 - $250,000 | $151 + 0.25% of amount above $100,000 |
| $250,001 - $600,000 | $526 + 0.65% of amount above $250,000 |
| $600,001 - $1,000,000 | $2,801 + 0.95% of amount above $600,000 |
| $1,000,001 - $1,800,000 | $6,601 + 1.4% of amount above $1,000,000 |
| $1,800,001 - $3,000,000 | $17,801 + 1.9% of amount above $1,800,000 |
| $3,000,001 and above | $40,601 + 2.75% of amount above $3,000,000 |
Trusts that nominate a beneficiary as the principal beneficiary (for fixed and unit trusts) may be eligible to use the general rates instead of the trust surcharge rates. Discretionary trusts generally cannot avoid the surcharge.
Absentee owner surcharge
If you are classified as an absentee owner (broadly, a foreign individual, foreign corporation, or trustee of a foreign trust that does not ordinarily reside in Australia), a flat surcharge applies:
| Surcharge | Rate |
|---|---|
| Absentee owner surcharge | 4% of total taxable land value |
This surcharge applies from the first dollar of land value — there is no tax-free threshold. An absentee owner holding $400,000 of taxable land would pay the general land tax plus $16,000 in absentee surcharge.
Vacant residential land tax (VRLT)
Victoria imposes an additional tax on residential land in specified areas that is left vacant for more than six months in the preceding calendar year:
| Tax | Rate |
|---|---|
| Vacant residential land tax | 1% of the capital improved value (CIV) per year |
Note that the VRLT is calculated on the capital improved value (the total property value including buildings), not just the land value. This makes it a significant cost. A $700,000 vacant property would attract $7,000 per year in VRLT on top of any general land tax.
The VRLT applies in all of metropolitan Melbourne and some designated regional areas. Exemptions are available for properties that are genuinely being renovated (with a planning permit), newly constructed and awaiting first occupancy, or subject to a court order preventing occupation.
Worked example: investment property with $400,000 land value
An Australian resident individual owns one investment property in Victoria with a site value of $400,000. They live in their own home (PPOR-exempt). No trust is involved.
Step 1: General land tax
The $400,000 land value falls in the $300,001 - $600,000 bracket:
| Calculation | Amount |
|---|---|
| Base amount for $300,001 bracket | $950 |
| Plus: 0.5% x ($400,000 - $300,000) | $500 |
| Total general land tax | $1,450 |
Step 2: Check for surcharges
| Surcharge | Applicable? | Amount |
|---|---|---|
| Trust surcharge | No (owned individually) | $0 |
| Absentee owner surcharge | No (Australian resident) | $0 |
| Vacant residential land tax | No (property is tenanted) | $0 |
Step 3: Total annual land tax
| Component | Amount |
|---|---|
| General land tax | $1,450 |
| Surcharges | $0 |
| Total land tax for 2025-26 | $1,450 |
What if the same property were held in a discretionary trust?
Using the trust surcharge rates for a $400,000 land value (in the $250,001 - $600,000 bracket):
| Calculation | Amount |
|---|---|
| Base amount for $250,001 bracket | $526 |
| Plus: 0.65% x ($400,000 - $250,000) | $975 |
| Total trust land tax | $1,501 |
The trust surcharge adds $51 per year in this example. At higher land values the gap widens considerably — for a $1,000,000 holding, the trust surcharge adds over $350.
Principal place of residence exemption
Your home (the land on which your principal place of residence sits) is fully exempt from land tax in Victoria, provided:
- You are a natural person (not a company or trust)
- You use the property as your primary home
- The land is not used primarily for business or income-producing purposes
If part of your PPOR land is used for an income-producing purpose (e.g., a home office that is a dedicated room, or a granny flat rented out), a proportional exemption may apply — only the non-exempt portion is taxable.
Other exemptions
- Primary production land — exempt if used for genuine farming
- Charitable and religious land — exempt if used for charitable purposes
- Rooming houses — partial exemption for registered rooming houses
- Retirement villages — exempt under certain conditions
Key takeaways
- Victoria’s land tax-free threshold is $50,000 for individuals and companies, but only $25,000 for trusts
- The COVID debt levy is baked into the 2025-26 rates and will remain until 2033-34
- Absentee owners pay a 4% surcharge from the first dollar — there is no threshold
- Vacant residential land in designated areas attracts an additional 1% of the total property value (not just the land value)
- All taxable land in Victoria is aggregated — owning three properties with $200,000 land value each means you are taxed on $600,000, not three separate $200,000 lots
- Holding property in a trust triggers higher rates unless a principal beneficiary can be nominated
- Your PPOR is fully exempt from land tax in most cases
- Use the Victorian Land Tax Calculator to calculate your exact liability for 2025-26
Related tools
- Land Tax Calculator — Victoria — enter your land values and ownership type to see your 2025-26 land tax bill