Tax Alert - Reminder of changes to Victorian land tax exemption for principal place of residence

Lowe Lippmann Chartered Accountants

Reminder of changes to Victorian land tax exemption for principal place of residence


It is always important to carefully consider if changing the use of your principal place of residence (PPR) may impact your eligibility to the exemption from land tax in Victoria.


In Victoria, a PPR exemption from land tax may continue or be granted where the individual owner (or vested beneficiary) is temporarily absent from their PPR. This may include examples such as working interstate or overseas.


For this exemption to apply for a (land tax) assessment year, the owner (or vested beneficiary) must have either obtained a PPR exemption or used the property as their PPR for at least six consecutive months immediately before the absence and satisfy the Victorian State Revenue Office (SRO) that:

  • the absence is only temporary;
  • the individual owner (or vested beneficiary) intends to resume occupation of the PPR after their temporary absence;
  • no other land in Australia is being treated as their exempt PPR during their temporary absence; and
  • the no income requirement is satisfied.

The no income requirement


The no income requirement means the PPR exemption does not apply to a tax year if any income was derived from the land in the year preceding the tax year.


For the 2021 tax year, there was a transitional arrangement whereby the owner or trustee could still qualify for the temporary absence PPR exemption if they rented the land for six months or less in 2020.


The rental requirement


Prior to the 2021 tax year, a rental requirement preceded the no income requirement.


The rental requirement was satisfied if the owner (or trustee) did not rent out the land for six months or more in the year before the assessment year during the period of absence.


We note that land tax is assessed on a calendar year basis at midnight on 31 December before your assessment is issued. For example, the land you own at midnight on 31 December 2022 is used to calculate land tax in 2023 (ie. between 1 January and 31 December 2023).


Clearly the rental requirement is not satisfied, and the PPR exemption is not available if the individual owner (or trustee) rents out the land for six months or more in the year before the tax year.


With easy access to platforms such as AirBNB, making a PPR available for rent during times when the property is temporarily vacant can be a consideration for some owners, in particular when they are overseas for a period of time for work or holidays. 


However, it is important to remind ourselves that deriving any income from your PPR after 1 January 2022 can fail the no income requirement and your PPR exemption from land tax in Victoria could be lost.


Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

Liability limited by a scheme approved under Professional Standards Legislation

July 21, 2025
New Tax Agent Obligations from 1 July 2025 From 1 July 2025, “small” firms of tax practitioners (with 100 or less employees) must ensure they are complying with the eight new Code of Professional Conduct obligations from the Tax Practitioners Board ( TPB ). These new Code obligations were introduced by the Government under the Tax Agent Services (Code of Professional Conduct) Determination 2024. The new Code obligations have already commenced for large tax practitioners (with over 100 employees) from 1 January 2025. As tax agents, Lowe Lippmann Chartered Accountants are committed to upholding our professional and regulatory obligations, including with the Tax Agent Services Act 2009 which includes the Code of Professional Conduct as regulated by the TPB.
July 16, 2025
Related parties – what should I consider in identifying them? Related party disclosures is an area that is receiving more scrutiny from stakeholders in both the for-profit and the not-for-profit space. Disclosure of transactions that have occurred with related parties are important since the terms and conditions are often different from those with unrelated parties, in some instances the transactions may have occurred for much lower or even nil consideration. Often one of the biggest challenges for compiling the disclosures is working out who is a related party of an entity. The definition of related parties in AASB 124 Related Party Disclosures is detailed, however we have summarised the definition into various elements below. a. Think about entities who might be related to the reporting entity i.e.: i. through control or significant influence, ii. by the existence of material transactions or iii. dependence on technical information or personnel provided by them. b. Think about people who might be related to the reporting entity, i.e.: i. Key management personnel, including all directors. ii. Close family members of key management personnel (e.g. spouse, child). c. Think about entities that the people identified in b. might control or significant influence, i.e.: i. Family businesses ii. Businesses which a close family member controls (i.e. senior partner in a legal or accounting firm). Once you have identified a complete list of who is potentially a related party, analysis can then be performed to confirm they meet the criteria in AASB 124 and then identify any transactions with these parties. Remember that transactions should be included whether or not a price was charged or whether the transaction was formally documented or not.
July 4, 2025
Changes to car thresholds from 1 July The car limit for the 2026 income year is $69,674. This is the highest value that a taxpayer can use to calculate depreciation on a car where they use the car for work or business purposes and they first use or lease the car in the 2026 income year. If a taxpayer is buying a car and the price is more than the car limit, the highest input tax ( GST ) credit they can claim (except in certain circumstances) is one-eleventh of the car limit. For the 2026 income year, the highest input tax credit they can claim is $6,334 (i.e. one-eleventh of $69,674). The luxury car tax ( LCT ) threshold for the 2026 income year is $91,387 for fuel-efficient vehicles, and $80,567 for all other luxury vehicles. Input tax credits need to be claimed within the four-year time limit. A taxpayer cannot claim an input tax credit for luxury car tax when they buy a luxury car, even if they use it for business purposes.
More Posts