Who is an absentee owner
From 1 January 2026, the SRO describes an absentee individual as someone who is not an Australian citizen or permanent resident, does not ordinarily reside in Australia, and either was absent from Australia on 31 December of the year before the tax year or was absent for more than 6 months in total in that earlier calendar year. Its step-by-step test runs in this order:
- Are you an Australian citizen or permanent resident? If yes, you are not an absentee.
- Do you ordinarily reside in Australia? If yes, you are not an absentee.
- Were you absent from Australia on 31 December of the year before the assessment year? If yes, you are an absentee.
- Were you absent for more than 6 months in total in that year? If yes, you are an absentee. If no, you are not.
Companies and trusts are tested differently. An absentee corporation is one incorporated outside Australia, or one where absentee persons together hold a controlling interest (more than 50% of the shares, control of the board, or more than 50% of the votes). An absentee trust is a trust with at least one beneficiary, unit holder or beneficial owner who is an absentee person. The trusts guide goes through the detail.
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Australian citizens and residents living abroad
The SRO's wording is direct: the surcharge does not apply to Australian citizens, permanent residents or Australian residents. A citizen who has lived overseas for years is therefore not an absentee for this purpose. Readers in that position may also want the Australian expats page for the other rules that apply to them.
New Zealand citizens changed position on 1 January 2026. Before then, holding a Special Category visa made a New Zealand citizen an Australian resident. From 1 January 2026, the SRO says they are subject to the same rules as other foreign citizens. A New Zealand citizen who is not a permanent resident and does not ordinarily reside in Australia is an absentee if they were away on 31 December of the previous year, or for more than 6 months in that year.
What "ordinarily resides" means
The SRO says there must be an element of permanence about where you live, compared with somewhere you stay casually or intermittently. You do not need to be in Australia on 31 December. The SRO considers:
- how long you have been physically present in Australia
- your purpose for being here, with work or study as indicators
- family and business or employment ties
- where your assets are kept, for example Australian bank accounts
- social and living arrangements, such as club or volunteer memberships
No single factor decides it. The second step of the test asks only whether you ordinarily reside in Australia, so the question is about where your life is based rather than about a particular visa.
What the surcharge costs
The rate history on the SRO's pages is 4% from the 2024 land tax year, 2% from 2020 to 2023, 1.5% for 2017 to 2019 and 0.5% for the 2016 land tax year.
The surcharge is calculated on the total taxable value of the Victorian land you own, using the Valuer-General's site values for the taxable land you owned at midnight on 31 December of the year before the assessment year. The SRO publishes combined rate tables, and the examples below follow them.
| Total taxable value | General land tax | Surcharge at 4% | Total payable |
|---|---|---|---|
| $400,000 | $1,650 | $16,000 | $17,650 |
| $800,000 | $3,450 | $32,000 | $35,450 |
| $1,200,000 | $6,450 | $48,000 | $54,450 |
The working for $800,000: general land tax is $2,250 + 0.6% x ($800,000 - $600,000) = $3,450. The surcharge is 4% x $800,000 = $32,000. The sum, $35,450, matches the SRO's combined absentee rate table ($26,250 + 4.6% x $200,000).
You do not pay the surcharge if your land is exempt from land tax, if the total taxable value of your land is below $50,000, or if the land is held on trust, is below $25,000 and the trust surcharge rate applies. These examples use the SRO's general rate table with the surcharge; land held on trust has a separate table.
Joint owners
When land is jointly owned, the surcharge depends on who the owners are. If all joint owners are absentee owners, it is applied to the joint ownership assessment. If only some are, it is applied to the individual assessments of the absentee owners. A joint owner who is not an absentee is not charged.
Telling the SRO
If you are an absentee owner on 31 December, you must tell the SRO by 15 January of the following year, using the Absentee Owner Notification Portal. A late notification can attract penalty tax. You must also update your details if your residency, a company's structure or a trust's arrangements change. If you cannot reach the portal, the SRO's number is 13 21 61.
Exemptions
The SRO's exemption pages are for absentee corporations and trusts, not individuals. An absentee corporation may be exempt if it is incorporated in Australia, owns land in its own right and runs a commercial operation in Victoria that uses local labour, materials and services. An absentee beneficiary of a trust may be exempt on similar grounds, and eligible build-to-rent developments may be exempt while the development is under way. The SRO says exemptions are not meant for passive investors or landlords.
Applications are made in writing, with ownership documents, structure diagrams, evidence of Victorian business activity and any prior FIRB approvals, to taxadvisory@sro.vic.gov.au or by post. The exemptions and refunds guide compares what each state allows.
Keep reading
- Foreign purchaser additional duty in Victoria: the 8% surcharge explained
- Land tax surcharge for foreign owners: every state and territory compared
- Land tax surcharge on trusts with foreign beneficiaries: how each state looks through the trust
- Foreign surcharge exemptions and refunds: what each state allows
- Additional foreign acquirer duty in Queensland: who pays the 8% and when
- Foreign buyer stamp duty in NSW: surcharge purchaser duty explained
Frequently asked questions
Is an Australian citizen living overseas an absentee owner in Victoria?
No. The SRO says the absentee owner surcharge does not apply to Australian citizens and permanent residents who live overseas. The test only goes on to residence and absence if you are not a citizen or permanent resident.
Does a temporary visa holder who lives in Australia pay it?
The SRO's test asks whether you ordinarily reside in Australia, and if you do, you are not an absentee. It looks at presence, purpose, family and business ties, assets and social arrangements. The SRO or a tax adviser can assess your own facts.
When is my status tested?
Each year at 31 December. If you are an absentee owner on that date, the surcharge applies in the following land tax year, and you must notify the SRO by 15 January. Land tax is based on land owned at midnight on 31 December of the year before the assessment year.
How is this different from the foreign purchaser surcharge?
Foreign purchaser additional duty (8%) is paid once when you acquire residential property, and status is generally tested at settlement. The absentee owner surcharge is charged every year and tested every 31 December. Different definitions apply, so a person can be caught by one and not the other.
Can the surcharge be challenged?
The SRO states that, following the High Court's decision in October 2025, absentee owner surcharge payable on or after 1 January 2018 is valid. For an existing assessment, the SRO or a tax professional can explain what that means in practice.
Sources
- Understanding the absentee owner surcharge, State Revenue Office Victoria
- Absentee individuals, State Revenue Office Victoria
- Absentee owner surcharge definitions, State Revenue Office Victoria
- Land tax current rates, State Revenue Office Victoria
- Apply for an exemption from the absentee owner surcharge, State Revenue Office Victoria
Checked 5 October 2026.
firbapproval.com.au is an independent guide. It is not affiliated with, endorsed by or connected to the Foreign Investment Review Board, the Australian Treasury or the Australian Taxation Office. We do not lodge or process applications. Applications are made to the ATO. General information only, not legal, tax, migration or financial advice.