The Victorian Government has unveiled its latest state budget.

The current budget has introduced a significant number of proposed tax increases; however, it is important to note that these announcements are preliminary and have yet to be legislated.

From 1 July 2024, stamp duty on commercial and industrial properties will be replaced with a 1% annual property tax, that will be payable from 10 years after the transaction. This is a very substantial change and more detail will be needed on this matter.

For 10 years from 1 July 2023, business with payroll over $10m will pay an extra 0.5% payroll tax and 1% for those over $100m.

In further changes for payroll tax, the annual tax free threshold to increase from $700,000 to $900,000 on 1 July 2024 and then to $1,000,000 from 1 July 2025. However, the benefit of the tax-free threshold will start phasing out for business with payroll over $3m, meaning business with payroll over $5m will not receive any benefit.

For 10 years from 1 January 2024, a land tax surcharge will apply. This will bring into the system some property owners that have not previously paid land tax. Note however that the same exemptions as currently apply, will continue to apply, including your principal place of residence.
For ordinary landholders, landholdings between $50,000 to $100,000 will have a flat $500 surcharge, between $100,000 and $300,000 a flat $975, while over $300,000 will have $975 plus a 0.1% increase in the land tax rate.
For trusts, landholdings between $50,000 and $100,000 will have a flat $500 surcharge, between $100,000 and $250,000 a flat $975, and over $250,000 a $975 surcharge plus a 0.1% increase in the land tax rate.
The Absentee Owner Surcharge increase from 2% to 4%, with the threshold also decreasing from $300,000 to $50,000, from 1st January 2024.
Whilst not a budget announcement, it was also previously announced that Workcover premiums for the upcoming financial year will increase on average 42%.

If you have any further queries, please contact your Accountant by emailing admin@patrickrowan.com.au

Patrick Rowan & Associates www.patrickrowan.com.au