Last week Victorian Treasurer Tim Pallas handed down the State Budget that focuses on the economic recovery from COVID-19 and significantly, mental health.
The Budget will also introduce and increase taxes which will impact developers, landlords and larger businesses. Key measures and changes include:
- Mental Health & Wellbeing Levy: A new payroll tax surcharge of 0.5% on Victorian businesses with annual Australia-wide wages over $10M. This will increase by a further 0.5% for businesses with wages of more than $100M. Expected Date of Effect: 1 January 2022.
- Land Rezoning Windfall Gains: A new windfall gains tax will be applied to rezoned land, taxed at 50% for windfalls above $500,000. Expected Date of Effect: 1 July 2022.
- Premium Stamp Duty Rate: A new stamp duty rate will apply for property purchases above $2M, increasing stamp duty payable to $110,000 plus 6.5% for value in excess of 2M. This will apply to contracts entered into after 1 July 2021.
- Apartment Stamp Duty Concessions: A temporary stamp duty concession will apply to new residential property up to $1M within the City of Melbourne. This will include 50% for new properties or a full exemption for new properties that have remained unsold for 12 months since completion. This concession will apply to contracts entered into after 1 July 2021 and before 30 June 2022. The exemption will apply to contracts entered into after 21 May 2021 and before 30 June 2022.
- Increased Land Tax Rates: Land tax rates will increase for taxable holdings above $1.8M, rising by 0.25% and 0.3% for taxable landholdings above $3M. Expected Date of Effect: 2022 land tax year.
- Land Tax Threshold Increase: The general land tax threshold will increase from $250,000 to $300,000. The land tax threshold for land held on trust remains unchanged at $25,000. Expected Date of Effect: 2022 land tax year.
- Increase in Payroll Tax Threshold: The Government will bring forward the increase in the payroll tax threshold to $700,000 and also a reduction in the regional employer payroll tax rate to 1.2125%. Expected Date of Effect: 1 July 2021.
For more detail on the Budget visit the State Government website.
Want more information?
To discuss the State Budget and its potential impact on your individual or business circumstances call your advisor on 5331 3711 or email us.