This Tuesday the 23rd of May the Victorian State Budget was delivered. The key announcements are provided below.
PAYROLL TAX
From 1 July 2023 there will be a COVID-19 debt – temporary payroll tax surcharge to apply to wages paid in Victoria by Businesses with national payrolls of over $10 million a year. This tax will be 0.5% on their national payroll over $10 million and an additional 0.5% on their national payroll above $100 million.
This tax will apply for 10years until 30 June 2033.
In terms of payroll tax the good news for business from the budget was an increase in the Payroll-Tax Threshold from 1 July 2024 from $700,000 to $900,000 and from 1 July 2025 from $900,000 to $1,000,000.
PROPERTY TAX
From 1 July 2024, Stamp Duty on the purchase of commercial or industrial property will be abolished and replaced with an annual property tax. This annual property tax will be 1% of the property’s unimproved land value.
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.
From the 2024 land tax year a new COVID-19 debt- temporary land tax surcharge will apply. The rates are:
General land tax rates
- For taxable landholdings between $50,000 and $100,000 — a $500 flat surcharge will apply
- For taxable landholdings between $100,000 and $300,000 — a $975 flat surcharge will apply
- For taxable landholdings over $300,000:
- a $975 flat surcharge
- an increased rate of land tax by 0.10 percentage points.
Trust surcharge land tax rates
- For taxable landholdings between $50,000 and $100,000 — a $500 flat surcharge will apply
- For taxable landholdings between $100,000 and $250,000 — a $975 flat surcharge will apply
- For taxable landholdings over $250,000:
- a $975 flat surcharge
- an increased rate of land tax by 0.10 percentage points
Your primary place of residence remains exempt from this surcharge.
This tax will apply from 10 years until the 2034 land tax year.
From the 2024 land tax year the absentee owner surcharge rate will increase from 2 per cent to 4 per cent and the minimum threshold for non-trust absentee owners will decrease from $300,000 to $50,000. (The threshold for land held by an absentee trust remains unchanged at $25,000).
If any of the above announcements affect you, your business or investments please contact your DFKBKM accounting representative.