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Did you know that everyone who owns land in Victoria is automatically registered for land
tax? However, only a small percentage of these owners receive an assessment for land tax
because the property you live in as your principal place of residence is exempt.
It is quite common for land owners to move away from their principal place of residence
to a different location for a period of time. A common scenario is that the owner needs
to relocate for work interstate or overseas. Another reason is that the owner may have
to move to a residential care facility, hospital or to reside with a carer because they have
lost the ability to live independently and require full time care.
In these situations, the principal place of residence exemption can continue on the property
even though the owner isn't living there. It is however important to be aware that in
certain circumstances the temporary absence provisions do not apply.
A common misconception is that people can rent their property out for the period of
their absence and still keep the principal place of residence exemption. In fact, there
are limitations on rental arrangements during the period of absence. The owner cannot rent
out the property for 6 months or more while they are absent. If the property is rented
for longer than this the exemption doesn't apply and the property becomes assessable
for land tax for that year. In order to keep the exemption, the absence
must be temporary in nature and the owner must return to their home within 6 years (and
must have been residing in the property for a minimum of 6 months prior to the absence.
The temporary absence exemption will not apply if you reside in another property that you
own either in Victoria, interstate or overseas. Further information regarding the temporary
absence provisions can be found on our website at sro.vic.gov.au. If you have any further
questions, give us a call on 13 21 61.