The Victorian 2023-2024 budget has brought forth substantial changes in its tax obligations and thresholds, heralding a new fiscal landscape for taxpayers in the state. These changes are expected to impact a wide spectrum of individuals and businesses and below are some key takeaways.
Land tax |
As a part of the Government’s COVID Debt Repayment Plan, a temporary land tax levy will apply for the next 10 years, from 1 July 2023 until 30 June 2033.
For General Land tax rates: The previous threshold for Land tax year was set at $300,000. Starting from the 2024 land tax year, the tax-free threshold for General Land Tax takes a dive and lowers to $50,000.
o For taxable landholdings between $50,000 and $100,000 — a $500 flat surcharge will apply. o For taxable landholdings between $100,000 and $300,000 — a $975 flat surcharge will apply. o For taxable landholdings over $300,000: - a $975 flat surcharge; and - an increased rate of land tax by 0.10 percentage points.
For Trust surcharge land tax rates: o For taxable landholdings between $50,000 and $100,000 — a $500 flat surcharge will apply. o For taxable landholdings between $100,000 and $250,000 — a $975 flat surcharge will apply. o For taxable landholdings over $250,000: a $975 flat surcharge; and an increased rate of land tax by 0.10 percentage points.
The threshold for land held by an absentee trust remains unaffected at $25,000.
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Stamp Duty |
In another significant move, the budget outlines the abolition of land transfer duty, commonly known as stamp duty, for commercial and industrial properties. This will be replaced with an annual property tax. Key details include:
o Commencement Date: From July 1, 2024, commercial and industrial properties will transition to the new system as they are sold, with the annual property tax payable ten years after the transaction.
o Annual Property Tax Rate: The annual property tax for commercial and industrial property will amount to 1% of the property's unimproved land value.
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Payroll tax |
As a part of the Government’s COVID Debt Repayment Plan for the next 10 years (from 1 July 2023 until 30 June 2033), a temporary payroll tax surcharge will apply on wages paid in Victoria by businesses with national payrolls over $10 million a year.
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%.
Starting from 1 July 2024, the payroll tax-free threshold will be increased: o commencing 1 July 2024 — from $700,000 to $900,000. o commencing 1 July 2025 — to $1,000,000.
NOTE: the deduction associated with the tax-free threshold will phase out for wages exceeding $3 million, rendering businesses with wages above $5 million ineligible for the payroll tax-free threshold benefit.
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Other |
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If you would like to discuss the above in further details, please reach out to our office for a private consultation.
*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*
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