The Victorian Government has handed down the state budget on Tuesday 23rd May 2023, with a significant focus on repaying the states COVID debt.
This budget means different outcomes for our clients, please speak to us about what these announcements mean for you and your businesses. We work to assist all our clients to address any areas of concern and to help navigate these changes.
All information summarised from: https://www.sro.vic.gov.au/state-budget-2023-24-announcement
Overview of measures:
Annual property tax – commercial and industrial property
From: 1 July 2024
Amount: 1% of the property’s unimproved land value
Stamp duty on commercial and industrial property will be removed and replaced with an annual property tax.
From 1 July 2024, commercial and industrial properties will transition to the new system as they are sold, with the annual property tax to be payable from 10 years after the transaction.
Temporary payroll tax surcharge
From: 1 July 2023
As part of its COVID -19 Debt recovery plans, the government will introduce a temporary payroll tax surcharge for Victorian businesses.
A rate of 0.5% will apply for businesses with national payrolls above $10 million, and businesses with national payrolls above $100 million will pay an additional 0.5%. This surcharge will be applied until 30 June 2033.
Payroll tax-free threshold
From: 1 July 2024
The payroll tax-free threshold will be increased from $700,000 to $900,000 commencing in July 2024. Then to be increased further to $1,000,000 in July 2025.
Businesses with wages above $5 million will not receive any benefit associated with the payroll tax-free threshold.
Temporary land tax surcharge
From: 2024 land tax year
Another COVID-19 Debt recovery measure is the application of a temporary land tax surcharge .
The surcharge will apply in addition to existing land tax from the 2024 land tax year for ten years.
Exempt properties remain exempt from this surcharge.
| General land tax rates | |
| Taxable landholdings amount | Surcharge |
| Between $50,000 and $100,000 | $500 |
| Between $100,000 and $300,000 | $975 |
| over $300,000 | $975 + an increased rate of land tax by 0.10 percentage points |
| Trust land tax rates | |
| Taxable landholdings amount | Surcharge |
| Between $50,000 and $100,000 | $500 |
| Between $100,000 and $250,000 | $975 |
| over $250,000 | $975 + an increased rate of land tax by 0.10 percentage points |
Absentee owner surcharge rate
From: 2024 land tax year
Increasing from 2% to 4%.
The minimum threshold for non-trust absentee owners will decrease from $300,000 to $50,000.
Land tax exemptions
From: 2024 land tax year
Land tax exemptions will apply in the following scenarios. Please refer to the State Revenue Office: State Budget 2023-24 announcement for full details of exemptions.
- Principal place of residence under construction or renovation if builder goes into liquidation
- Land protected by a conservation covenant with Trust for Nature.
Land tax exemptions and concessions – special disability trust
- A new land tax exemption will apply to land owned by an immediate family member and used as the home of an individual eligible to be a beneficiary of a special disability Trust, including where a special disability trust has not been established. (2024 land tax year)
- The deduction threshold for the land transfer duty special disability trust concession will increase from $500,000 to $1.5 million for principal place of residence transfers. (1 July 2023)
- A new land transfer duty concession will apply for the transfer of a home valued up to $1.5 million by an immediate family member to an individual eligible to be a beneficiary of a special disability trust. (1 July 2023)
Land transfer duty pensioner exemption and concession thresholds
To be aligned with the same thresholds for first home buyers, at $600,000 and $700,000 respectively. Eligibility to be assessed on the total value of the purchase.
Read more from the State Revenue Office Overview here: State Budget 2023-24 announcement | State Revenue Office (sro.vic.gov.au)
Other measures
From: 1 July 2024
- Payroll tax exemption for high-fee non-government schools to be removed.
- Business insurance duty will be abolished over a 10-year period, to be reduced by 1 percentage point every year.
- The wagering and betting tax rate will increase from 10 per cent to 15 per cent of net wagering revenue.
