New State Taxes
State Taxation Acts Amendment Act 2023
The majority of Australian States and Territories have now delivered their budgets for 2023–24, including Victoria.
The Act introduces policies outlined in the Victorian Budget for 2023–24, such as:
- A new duty exemption for a transfer of land from an immediate family member to a person with a disability.
A transfer of property from a member of the immediate family to a person with a handicap who would be eligible to be a major beneficiary of a Special Disability Trust (“SDT”) even if an SDT has not yet been established will be free from tax under a new provision added to the Duties Act 2000 that will take effect on July 1, 2023. Starting on July 1, 2023, properties up to $1.5 million in value are eligible for the exemption.
- An increase to the property value thresholds for pensioner and concession cardholder duty exemption and concession.
The property value thresholds under the Duties Act 2000 have been raised to $600,000 for the exemption and $750,000 for the concession as of 1 July 2023. The benefit is applied in full against the duty that must be paid on the purchase. There are now additional eligibility requirements, including one for residency.
- A temporary land tax surcharge from the 2024 land tax year.
The Land Tax Act 2005 has been amended to introduce a temporary land tax surcharge from the 2024 land tax year, expiring after ten years. Properties exempt from land tax will also be exempt from the surcharge.
- For taxable landholdings between $50,000 and $100,000, a $500 flat surcharge will apply;
- For taxable landholdings between $100,000 and $300,000 (or $250,000 for trusts), a $975 flat surcharge will apply; and
- For taxable landholdings over $300,000 (or $250,000 for trusts), a $975 flat surcharge will apply plus an increased rate of land tax by 0.10 percentage points.
- An increase to the absentee owner surcharge rate from 2% to 4%.
With effect for the 2024 land tax year, the Land Tax Act of 2005 has been revised to raise the Absentee Owner Surcharge rate from 2% to 4% and lower the tax-free level for non-trust absentee owners from $300,000 to $50,000.
- A temporary payroll tax surcharge to employers who pay Australia wide wages of $10 million or more.
A temporary payroll tax surcharge that will start on July 1, 2023, and end after ten years is introduced by the Payroll Tax Act of 2007. Employers who pay $10 million or more in wages across all of Australia in a fiscal year are subject to the surcharge, which is paid on earnings above the applicable threshold in Victoria.
- Businesses with national payrolls over $10 million will be subject to a 0.5% levy; and
- Businesses will pay an extra 0.5% if their national payroll exceeds $100 million.
The Act also modifies a number of state tax laws.
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