Over the past several decades, rapid advances in 3D sensing have yielded vast, detailed point cloud datasets critical for machine learning, yet traditional 2D annotation workflows remain inefficient and error-prone. This work presents a novel open-source VR-based point cloud labelling tool developed in Unreal Engine that immerses users in a fully interactive 3D environment for intuitive annotation. By modifying Unreal Engine’s LiDAR Point Cloud Plugin, real-time, GPU-accelerated labelling of point clouds with over 150 million points at ( \(86\pm 21\) ) FPS is achieved. A novel sphere tracing-based labelling algorithm for point selection is proposed, which dynamically adapts to complex point cloud structures at variable distances, ensuring precise annotation across diverse scenarios. Furthermore, a literature review of VR-based labelling tools is provided, detailing software environments, hardware configurations, performance metrics, and interaction techniques. These contributions expand the range of VR annotation tools and establish a new performance baseline, paving the way for future hybrid intelligence systems. The open-source nature of the modifications invites further development in immersive 3D data annotation.