The Victorian 2021-22 State Budget was delivered yesterday, Thursday 20th May 2021 and Treasurer Tim Pallas described it as Victoria’s road to recovery by investing in some transformational changes, particularly in the space of mental health support.
Here’s a snapshot of the proposed measures that have been announced, focussing on three key areas.
Payroll tax
To help improve the lives of many Victorian residents, the Victorian government has announced a new mental health system that is to be built from the ground up. The Victorian government is looking at big businesses to help fund this initiative by announcing a new Mental Health & Wellbeing Levy in the form of a payroll tax surcharge from 1 January 2022, aiming to collect over $3 billion over a period of four years. The proposed payroll tax surcharge involves:
- a surcharge of 0.5% on wages by Victorian businesses with national payrolls over $10 million a year.
- an additional surcharge of 0.5% (i.e. a total of 1% surcharge) to those with national payrolls above $100 million.
From 1 July 2021, the payroll tax-free threshold will increase from $650,000 to $700,000 and the regional employer rate will reduce from 2.02% to 1.2125% (brought forward from the planned commencement date of 1 July 2022).
Land tax
Measures announced around land tax are:
- an increase in land tax rates for high value landholdings by 0.25% for landholdings above $1.8 million and 0.3% for landholdings exceeding $3 million, from 1 January 2022.
- an increase of the tax-free threshold from $250,000 to $300,000, from 1 January 2022. The rate for land held on trust remains unchanged.
- a new windfall gains tax for high value landholdings that are rezoned, from 1 July 2022.
- the vacant residential land tax exemption for new developments to be extended to apply for up to two years, from 1 January 2022.
- removal of the land tax exemption for private gender-exclusive clubs, from 1 January 2022.
Land transfer duty (Stamp duty)
Some of the measures on land transfer duty (stamp duty) include:
- a new premium duty rate for property transactions with a dutiable value above $2 million for contracts entered into from 1 July 2021, with duty payable to increase by an additional 1% (to 6.5%) of the dutiable value above $2 million. For dutiable value in excess of $960,000 and up to $2 million, the duty rate remains unchanged at 5.5% of the dutiable value.
- a temporary duty concession of up to 100% for purchase of new residential property in the Melbourne local government area with a dutiable value of up to $1 million, for contracts entered into from 21 May 2021 to 30 June 2022.
- a temporary increase in the off-the-plan duty concession threshold to $1 million for all home buyers, from 1 July 2021 to 30 June 2023.
If you would like to know more about the proposed changes, please get in contact with your Nexia Advisor.
