The Victorian Farmers Federation (VFF) has welcomed clarification from the state government on the potential application of the Vacant Residential Land Tax to farm properties in regional Victoria.
Following Treasurer Tim Pallas’ announcement that the government would extend the vacancy tax to regional areas, the VFF expressed serious concerns about the possible adverse effects on houses intended for farm workers.
On October 4, the Treasurer announced significant changes to land tax adjustments in all contracts of sale entered into on and from January 1, 2024 and an expansion of the vacant residential land tax regime.
The new legislation proposes to extend the vacant residential land tax to all vacant residential land in Victoria and extend it to simple vacant residential land.
Currently, the vacant residential land tax generally only applies to residential dwellings that are not occupied for six months or more of a calendar year, and it only applies to properties within the 16 inner-metro Melbourne areas.
VFF President Emma Germano said the Treasurer had responded to her letter that highlighted the VFF’s concern and sought clarity on the government’s position.
“I am pleased the Treasurer has responded directly to the VFF’s advocacy by clarifying the extension of the vacant residential land tax will not apply to houses on primary production land,” Ms Germano said.
“It is important the government understands that circumstances in regional areas are often far different to those in Melbourne.
“The application of this tax to vacant farmhouses would be completely unfair, given these houses are used for seasonal workers, or where a vacancy has been forced due to workforce shortages.”
Ms Germano said that while the tax would not be applied to houses on primary production land, it could still apply to other properties used by farm businesses for worker accommodation.
“Whilst we appreciate the clarification, the VFF remains sceptical about the potential impact and execution of this policy,” she said.
“We remain concerned that there may be circumstances where houses used for farm workers are not located on farmland and, therefore, may be subject to this new tax.
“It’s important that we don’t have policy on the run which unfairly treats farmers and leads to perverse outcomes.”
Ms Germano said the VFF will closely monitor the implementation of the tax across regional communities.
“We hope for continued collaboration with the government to ensure a fair and reasonable approach that supports our vital agricultural sector while addressing broader housing and workforce issues,” she said.
