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Victorian properties left unused for three consecutive years will face a newly imposed tax as part of a recent agreement reached between the Allan government and the Greens. In an eleventh-hour deal, the Allan government is set to amend its contentious land tax laws this week, having secured the support of the minor party to facilitate the passage of the Bill through the parliament.

Last month, Treasurer Tim Pallas surprised the property sector with the announcement of an expansion of the one percent tax on vacant homes to encompass the entire state by 2025. Originally impacting properties solely in Melbourne's inner and middle suburbs, with exemptions for those occupied at least four weeks annually, the legislation faced a setback as the Greens insisted on more robust housing reforms before supporting the changes.

Under the revised legislation, the one percent land tax will escalate to two percent for homes left vacant for two years, further increasing to three percent for properties remaining unused for three years. In tandem, the government plans to implement a trial enforcement system across metropolitan Melbourne, compelling homeowners to furnish records of occupants at their residences.

Spearheaded by the State Revenue Office, this trial would utilise utility data to identify unoccupied homes, streamlining the tax enforcement process without relying on self-reporting.

Greens leader Samantha Ratnam emphasised that the party's negotiations had resulted in amendments that would alleviate the housing crisis by unlocking numerous vacant homes, offering relief to renters struggling to secure stable and affordable housing.

Ratnam underscored the importance of collaborative efforts to address the housing crisis effectively, signaling the need for substantial solutions rather than accepting incremental changes amid the prevailing challenges.

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