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Victorian State Budget 2020-21 Announcements

The Victorian Government delivered the 2020-21 State Budget on Tuesday 24 November 2020.  While the full details have yet to be released, we can provide the following summary of the relevant state tax incentives which have been announced.

Payroll tax

  • A payroll tax credit (known as the New Jobs Tax Credit) for businesses with payrolls less than $10 million whose Victorian taxable wages increase in 2020-21 and 2021-22, applied to the 2020-21 and 2021-22 payroll tax years.
  • Deferral of 2020-21 payroll tax liabilities for up to 12 months, for businesses with payrolls of up to $10 million.  As this is a deferral, and not a waiver, this provides a potential cash-flow benefit only.
  • Full refund and waiver of 2019-20 payroll tax for small and medium businesses, and this includes Victoria businesses participating in the JobKeeper program will be exempt from payroll tax and WorkCover premiums on additional wages paid to staff who were stood down or earned less than the JobKeeper payment.
  • An increase in the annual payroll tax reporting threshold, from $40,000 to $100,000, for businesses registered for payroll tax in Victoria on 1 July 2021.

Land Tax

  • A 50% land tax discount for eligible "build-to-rent" developments, including an exemption from the Absentee Owner Surcharge, until 1 January 2040.  This discount is planned to commence in relation to the 2022 land tax year.
  • A land tax exemption for land owned and occupied by not-for-profit clubs that provide for the social, cultural, recreational, literary or educational interests of their members.  This exemption is planned to commence in relation to the 2021 land tax year.

We note the Victorian "land tax year" is assessed on a calendar year basis, based on land owned at midnight on 31 December before a land tax assessment is issued.  In other words, the land owned at midnight on 31 December 2021 is used to calculate land tax in 2022 land tax year.

Stamp Duty

  • Bringing forward the 50% stamp duty concession for commercial and industrial properties in regional Victoria, applying to contracts entered into on or after 1 January 2021.
  • A stamp duty waiver of up to 50% on purchases of residential property in Victoria with a dutiable value of up to $1 million, applying to contracts entered into on or after 25 November 2020 and before 1 July 2021.   A waiver of 50% is planned for new build and "off-the-plan" residential properties, and 25% for existing residential properties.

Other Fees and Levies

  • Liquor licence fees for 2020 and 2021 have been waived.
  • Fire Services Property Levy for 2020-21 will be frozen at the 2019-20 rate.  This measure was originally planned to come into effect from July 2023.
  • Landfill levy has been frozen and all planned increases have been deferred..

We note that full details of these announcements will be released as the Victorian Government progresses with the necessary legislations and regulations.

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.