The Victorian State Budget for the 2020-21 year has been much awaited in light of the recent Covid-19 pandemic. The budget focused on promoting investment into housing and planning, rebuilding the state and its economy.

Some State tax focused measures that were announced include:

Land transfer (stamp) duty

• A 50% land transfer (stamp) duty discount for commercial and industrial properties in Victoria has been brought forward and will now apply to contracts entered into on or after 1 January 2021.

• Land transfer (stamp) duty discounts of 50% on purchases of new residential property and 25% on purchases of existing residential property in Victoria with a value of up to $1 million for contracts entered into on or after 25 November 2020 and before 1 July 2021.

• Confirming the eligibility of vacant land upon which a transferee intends to build a home can be entitled to the principal place of residence concession or first home buyer duty exemption or concession.

Land tax

• Victoria’s Big Housing Build will provide eligible build-to-rent developments a 50% land tax discount for eligible new developments until 2040. These developments will also be exempt from the Absentee Owner Surcharge over the same period.

• A land tax exemption will be applied to land owned and occupied by not-for-profit clubs that provide for the social, cultural, recreational, literary or educational interests of their members from the 2021 land tax year onwards.

Payroll tax

• From 1 July 2021, the payroll tax annual reporting threshold will be increased from $40,000 to $100,000 for businesses registered for payroll tax in Victoria.

• For the 2020-21 and 2021-22 payroll tax years, businesses with payrolls less than $10 million in Australian taxable wages will be eligible for a payroll tax credit.

Other technical amendments

The State Taxation Acts Amendment Bill 2020 (Vic) also introduced some other technical amendments the Duties Act 2000 (Vic), such as to:

• Ensure the partnership provisions can apply to look through multiple layered partnerships when assessing the duty of a partner’s partnership interest (where a partnership has partnership property);

• Exclude security interests in fixtures from being dutiable property;

• Extend the corporate reconstruction concession for matters involving multiple steps that contain arrangements involving both a consolidation and a reconstruction; and

• Confirm that the corporate consolidation concession is only available to consolidated groups under the Income Tax Assessment Act 1997 (Cth).

If you have any questions, please contact our specialist team:

Denise Tan
Senior Associate
M +61 438 714 965 | T +61 3 9611 0160 
E: dtan@sladen.com.au

Phil Broderick
Principal
M +61 419 512 801 | T +61 3 9611 0163  
E: pbroderick@sladen.com.au           

Laura Spencer
Senior Associate
M 0436 436 718 | T +61 3 9611 0110
E lspencer@sladen.com.au