2021/22 Victorian State Budget Summary
Here's a snapshot of the main measures affecting payroll tax, land tax and stamp duty for you:
From 1 July 2021
· the payroll tax threshold will increase from $650,000 to $700,000 (this has been brought forward from 1 July 2022);
· the payroll tax rate will decrease for regional employers from 2.02% to 1.2125%; · businesses with an annual payroll tax liability of $100,000 or less can move from monthly to annual payment and reporting of payroll tax (this is an increase from the previous threshold of $40,000).
We note that existing payroll tax exemptions for charities, private schools, hospitals and local councils will apply.
From 1 January 2022
A new mental health and wellbeing levy will be collected via the payroll tax system -
· For businesses with payrolls greater than $10 million a 0.5% levy will apply;
· For businesses with payrolls greater than $100 million a 1% levy will apply.
The tax free threshold for general land tax rates will increase from $250,000 to $300,000 with effect from 1 January 2022 (the land tax threshold for land held on trust remains unchanged at $25,000).
For the 2022 land tax year the land tax rate will increase:-
· from 1.3% to 1.55% for taxable landholdings exceeding $1.8 million and not exceeding $3 million; (an increase of 0.25%); and
· from 2.25% to 2.55% for taxable landholdings exceeding $3 million (increase of 0.30%).
From the 2022 land tax year, the vacant residential land tax exemption for new developments will be extended to apply for up to two tax years, meaning there is an exemption for at least 2 years following the completion of a newly constructed dwelling before the vacant residential land tax applies.
From 1 July 2022, a new windfall gains tax will be introduced for properties which have increased in value by planning decisions to re-zone the land (re-zonings to and from the Urban Growth Zone within existing Growth and Infrastructure Contribution areas and re-zonings to Public Land zones are excluded. The tax also applies to re-zonings between zone types not those between sub-categories). The total value uplift from a re-zoning decision will be taxed at 50% for windfalls above $500,000, with the tax phasing in from $100,000.
Stamp Duty changes
Property transactions entered into from 1 July 2021 - with a value above $2 million - will be subject to an increased duty payable of $110,000 plus 6.5% of the dutiable value over $2 million.
For contracts entered into from 21 May 2021 to 30 June 2022, a temporary 100% stamp duty concession will apply for new residential properties valued up to $1 million
that have been unsold for 12 months or more since completion in the Melbourne local
The threshold for the off the plan concession for stamp duty will increase to $1 million for contracts entered into from 1 July 2021 to 30 June 2023.
From 1 July 2021, the heavy vehicle charge will increase by 2.5%.
A new Distillery Door Grant scheme for Victorian distilleries will be introduced for the 2021-22 and 2022-23 financial years to provide funding to local distillers who attract tourists and create jobs.
Over $280 million will be invested in creative industries and jobs, including the screen industry and cultural institutions.
A number of programs will continue, including the Melbourne City Recovery Fund (jointly funded with the City of Melbourne) and the New Jobs Tax Credit.