Victoria Land Tax and State Tax Changes in 2026 April 7, 2026

Recent amendments to Victoria’s state tax regime have introduced significant changes affecting land tax, stamp duty, build-to-rent developments, commercial and industrial property, and shared equity housing schemes.

Two key Acts, the State Taxation Acts Amendment Act 2025 and the State Taxation Further Amendment Act 2025, together with consequential changes flowing from the Help to Buy (Commonwealth Powers) Act 2025 (Vic), reshape several core property-related taxes.

Here are the key changes most relevant to property owners, developers and investors that our property lawyers have put together.

Key Takeaways

The 2025 reforms reflect a broad policy shift that includes:

• Increased housing supply and affordability
• Stronger tenant protections in build to rent projects
• Improved fairness for family violence survivors
• Tighter integrity measures across land tax, CIPT, payroll tax and compliance regimes

Property owners, developers and investors should review their structures and upcoming transactions carefully, particularly following the 1 January 2026 commencement of several of these key changes.

1. Stamp Duty: Extension of the Off the Plan Concession

The temporary off the plan duty concession has been extended to contracts entered into before 21 October 2026. Purchasers of off the plan apartments and townhouses can continue to exclude post-contract construction costs from the dutiable value of the land, reducing upfront duty. Importantly, the concession continues to apply to investors, companies and trusts, not just owner occupiers. The extension is intended to support housing supply and maintain feasibility for multi-unit residential developments.

2. Family Violence Reforms: First Home Buyer and Land Tax Relief

Re-qualification for the First Home Owner Grant

Survivors of family violence may now re-qualify for first home buyer assistance where they were unable to occupy their previous home due to family violence and received no financial benefit from that property. Eligible applicants are treated as though they have never previously owned a home, restoring access to first home buyer grants and concessions.

Principal Place of Residence (PPR) Land Tax Exemption

Land may continue to be treated as a principal place of residence for up to six years where an owner is absent due to family violence, provided they derive no income from the property. This change ensures land tax exemptions are preserved despite forced absence and avoids compounding financial disadvantage.

3. New Integrity Measures for Build-to-Rent (BTR) Developments 

Mandatory Offer of Long Term Leases

Since 1 January 2026, eligible build-to-rent developments must genuinely offer new renters a minimum three-year lease, although tenants may elect a shorter term. Short term leases under 12 months will no longer satisfy the requirements for BTR land tax concessions. This reform is intended to improve rental stability while aligning tenancy practices with the policy objectives underpinning BTR incentives.

Commissioner Discretion for Temporary Vacancies

The Commissioner of State Revenue now has discretion to maintain BTR land tax concessions where the minimum 50 dwelling requirement is temporarily not met due to reasonable circumstances, such as damage or renovation. This avoids automatic loss of tax concessions where short term disruption is outside the owner’s control.

4. Commercial and Industrial Property Tax (CIPT) Reforms

Provisional Determinations of Qualifying Use

The Commissioner may now provisionally determine whether land has a qualifying commercial or industrial use even where formal valuation classifications have not been finalised. These determinations may operate retrospectively, providing greater certainty for landowners transitioning into the CIPT regime and reducing delays caused by administrative timing issues.

Subdivision Alignment

From 25 June 2025, the CIPT status of subdivided land must align with the parent lot. Subdivision alone will no longer reset or alter CIPT treatment, producing more predictable outcomes for staged and mixed use developments.

Technical Clarifications

Further amendments clarify the definition of an “entry transaction” into CIPT, confirming that duty must be payable on 50% or more of the dutiable value for direct transfers of land to enter the CIPT reform. These changes apply retrospectively from 1 July 2024 and are aimed at preventing structuring designed to avoid entry into the CIPT regime.

5. Land Tax: Modernised Exemptions and New Obligations

Partial PPR Exemptions for Mixed-Use Land

From 1 January 2026, land tax may be apportioned where only part of the land qualifies as a principal place of residence. This reform recognises modern living arrangements, including mixed residential and business use and secondary accommodation following death or incapacity, and avoids the full loss of PPR exemptions in these circumstances.

Trustee Notification Requirements

Trustees must notify the Commissioner within one month of certain trust related transactions that do not change legal ownership of land. These notification obligations are intended to improve transparency around beneficial ownership, with penalties applying for non compliance.

Temporary Residence Land and VRLT Changes

A new land tax exemption applies to low value land, being land with a taxable value under $300,000, that contains a temporary residence such as a caravan, shed or tent, subject to strict conditions. Changes to the Vacant Residential Land Tax regime also expand exemptions where land temporarily ceases to be residential during the year, reducing inadvertent VRLT exposure.

6. Expanded Application of the Congestion Levy

Since 1 January 2026, the congestion levy framework has significantly expanded. Exclusively residential parking is expressly exempt, levy amounts increase, Category 2 levy areas are expanded, and new exemptions and concessions apply, including for short stay retail parking. The Commissioner is also required to publish an official levy area map. Owners of parking assets in expanded levy zones should carefully review their exposure as their levies may have increased.

7. Duties Act: New Exemptions and NZ Citizen Reforms

New duty exemptions apply to transfers of dutiable property between trustees, custodians and sub custodians where the property is held in the same fiduciary capacity. This reduces duty burdens in managed investment and custodial structures.

In addition, New Zealand citizens may avoid foreign purchaser duty where they reside in Australia for at least six months within a 24-month window, aligning duty, land tax and first home buyer rules more closely with practical residency rather than formal visa status.

8. Shared Equity Housing and the Help to Buy Scheme

Victoria has adopted key elements of the Commonwealth Help to Buy scheme. Stamp duty is assessed as if the purchaser owns 100% of the property, ignoring the Commonwealth’s equity interest. Increases in a participant’s equity share, commonly referred to as “staircasing”, are exempt from duty. Land tax is assessed without regard to the Commonwealth’s interest, and Victorian shared equity schemes are preserved from inconsistency with Commonwealth legislation.

These measures are intended to support affordability while avoiding unintended tax consequences for shared equity participants.

9. Other 2025 State Tax Changes (Non-Land Tax)

Payroll Tax: Regional Employee Clarification

The definition of a regional employee has been clarified so that it is determined solely by reference to services performed within Victoria, disregarding work performed interstate. Employees who primarily work in regional Victoria may therefore qualify for the regional payroll tax rate even if part of their role is carried out outside the state. This clarification applies retrospectively from 1 July 2025.

Tax Administration: New 50% Penalty for Recklessness

A new 50% penalty tax applies where a tax default is caused by taxpayer or adviser recklessness. This materially increases exposure for land tax, duty and notification failures and underscores the importance of robust compliance and review processes.

Building Permit Levy Reforms

Amendments to the Building Act 1993 overhaul how building permit levies are calculated and enforced. The reforms introduce a statutory definition of the cost of building work, new rules for cost plus contracts, mandatory levy payment before permit issue, expanded refusal and reassessment powers for building surveyors, and validation of historic levy calculations dating back to 1994. These changes affect builders, developers, owner builders and building surveyors.

The final word

Knowing what changes are coming and which have commenced are only the first steps to being prepared for them. For tailored advice on how these reforms affect you, your projects or your property portfolio, please contact our property team at marshalls+dent+wilmoth.