On 20 May 2021, the Treasurer of Victoria, Tim Pallas, delivered the 2021-22 Victorian State Budget. Some of the more important announcements include:
- The introduction of a payroll tax surcharge designed to help fund mental health programs. A new payroll tax levy of 0.5% will apply for those employers with national wages of more than $10M. If the national wages of the employer exceed $100M, the payroll tax levy will increase to 1%. The proposed levy is scheduled to be introduced from 1 July 2022.
- An increase in the payroll tax threshold from $650,000 to $700,000 effective from 1 July 2021.
- An increase in the rate of stamp duty that is payable on the purchase of properties in excess of $2M. Currently, properties with a value of above $960,000 are assessed with stamp duty at the rate of 5.5%. Under the proposed change, a new threshold will be introduced for properties valued at above $2M. For these properties, the rate of stamp duty will be $110,000 plus 6.5% of the excess value above $2M. This change is proposed to apply for properties purchased after 1 July 2021.
- The introduction of temporary stamp duty concessions for the purchase of new residential property in the City of Melbourne local council area. For properties valued at less than $1M, a 50% stamp duty concession will apply for purchases of new residential property between 1 July 2021 and 30 June 2022. For new residential properties valued at less than $1M that have remained unsold for more than 12 months since completion of construction, full stamp duty exemption will be available during the period 21 May 2021 and 30 June 2022.
- An increase in the threshold value for stamp duty concessions for off-the-plan transactions to $1M during the period 1 July 2021 and 30 June 2023. The concession will be available for all purchases of property to become the principal place of residence of the purchaser where the value of the purchase, less construction costs after the contract is entered into, does not exceed $1M
- The land tax marginal rate for landholdings in excess of $1.8M will increase by 0.25% and the land tax marginal rate for landholdings in excess of $3M will increase by 0.3%.
- An increase in the land tax threshold for landholdings held by individuals from $250,000 to $300,000.
- The introduction of a new windfall gains tax to apply from 1 July 2022 which will impose a tax of up to 50% on any windfall gain arising from the increase in value of a property as a result of changes in planning schemes that have occurred.
If you have any questions relating to the Victorian State Budget and how it may impact you, please do not hesitate to get in touch with us via your Banks Group representative, (03) 9810 0700 or firstname.lastname@example.org.