7 December 2020
We’ve reviewed the main tax proposals from each of the State Budgets to provide you with a breakdown of the main announcements across land tax, land transfer duty and payroll tax in each state.
Victoria (24 November 2020)
- 50% land tax discount for build-to-rent housing from 1 January 2022 to 1 January 2040, including an exemption from the absentee owner surcharge.
- Land tax exemption for land owned by clubs providing social, cultural, recreational, literacy or educational interests for their members.
- Previously announced COVID-19 land tax relief measures:
- 25% waiver of 2020 land tax for small and medium sized businesses that operate from owner-occupied properties and landlords who cannot rent out their properties because of COVID-19 restrictions.
- 50% waiver of 2020 land tax and deferral of payment for remaining 50% until March 2021 for commercial and residential landlords.
- Deferral of 2020 land tax liability to 31 March 2021 for taxpayers that have total taxable landholdings below $1 million and own at least one non-residential property.
- 25% waiver of 2021 land tax and deferral of payment for remaining 75% until November 2021 for certain commercial and residential landlords.
Land Transfer Duty
- 50% waiver on land transfer duty for new residential properties and a 25% waiver on land transfer duty for existing residential properties for contracts entered into between 25 November 2020 and 30 June 2021.
- 50% waiver of land transfer duty for commercial and industrial properties in regional Victoria for contracts entered into from 1 January 2021.
- Currently, employers with an annual payroll tax liability of up to $40,000 can pay payroll tax on an annual basis. With effect from 1 July 2021, the threshold for employers to pay payroll tax annually instead of monthly will increase to $100,000.
- No payroll tax on increased wages in 2021 or 2022 for businesses with annual Australian group wages below $10 million.
New South Wales (17 November 2020)
- 50% land tax discount for build-to-rent housing from 1 July 2020 to 2040, including removing the surcharge land tax otherwise applicable.
- Land tax relief for retail landlords (50% for 2020 land tax liability and 25% for 2021 land tax liability) with tenants with annual turnover of up to $5 million.
Land Transfer Duty
- Reduce land transfer duty from 1 August 2020 to 31 July 2021 for purchase of new homes valued between $650,000 and $1 million, with the concession reducing for values over $800,000.
- Reduce land transfer duty from 1 August 2020 to 31 July 2021 for first home buyers of vacant land valued between $350,000 and $500,000, with the concession reducing for values over $400,000.
- Temporary two-year reduction in payroll tax rate from 5.45% to 4.85% from 1 July 2020 to 30 June 2022.
- From 1 July 2020, the threshold to pay payroll tax will be raised to $1.2 million thereby businesses with taxable wages below $1.2 million will no longer have to pay payroll tax.
- 25% waiver of 2020 payroll tax liabilities for businesses with taxable wages below $10 million (this waiver will take effect upon lodgement of the 2020 annual return).
The New South Wales Treasurer also raised the possibility of phasing out land transfer duty on properties by allowing taxpayers to choose whether they would prefer to pay stamp duty at the time of purchase of a property or only pay an annual property tax charge. There will be a period of public consultation in relation to the proposal until early 2021.
Only time will tell how successful these proposals will be but if you require any further information or assistance with your tax obligations, please contact the Findex Tax Advisory team.