Victorian State Tax Changes - June 2019

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The State Taxation Acts Amendment Act 2019 brings along a number of changes (most applicable from 1 July 2019). You might already be aware of some, that were included in the 2019-20 Victorian Budget. 

Duties

  • Foreign purchaser additional duty rate increase from 7 per cent to 8 per cent.
  • Land transfer duty concession for transfers of commercial and industrial properties in regional Victoria.
  • Motor vehicle duty rate increases on passenger vehicles valued above $100,000, with concessions for ‘green’ and ‘primary producer’ passenger vehicles.
Passenger car
Rate of duty per $200, or part, of the dutiable value of the motor vehicle
Dutiable value at or below the luxury car tax threshold
$8.40
Dutiable value above the luxury car tax threshold ($67,525 for 2019-20) and at or below $100,000
$10.40
Dutiable value above $100,000 and at or below $150,000
$14.00
Dutiable value above $150,000
$18.00
Green car (any dutiable value)
$8.40
Primary producer passenger car (any dutiable value)
$8.40

Table from SRO.vic.gov.au

  • An exemption from motor vehicle duty for service demonstrator vehicles.
  • Corporate reconstruction duty provisions expanded and the exemption replaced with a concessional rate.
  • A threshold value test will ensure that the acquisition of insignificant fixtures will not be subject to duty. A concession applies for fixtures valued between $2 million and $3 million, with full duty only payable where the fixture is more than $3 million in value. This amendment applies to arrangements made or on after 19 June 2019.
  • Removal of restrictions on unit trust schemes being a public unit trust scheme for landholder duty purposes. This amendment applies on or after 19 June 2019.
  • Impose land transfer duty on the acquisition of economic entitlements, with a focus on the relevant land, such as rights to participate in the income, rents, profits or capital growth of the land, rather than the landholder. 

Land Tax

  • Principal place of residence land tax exemption for contiguous land limited to properties in regional Victoria (for 2020 land tax year).
  • Absentee owner surcharge rate increase from 1.5 per cent to 2 per cent (for 2020 land tax year).


Payroll Tax

  • Exemption for wages paid to employees on maternity leave expanded to all types of parental leave.
  • Wage threshold increases to $700,000 by 2022-23, with increases of $25,000 in both 2021-22 and 2022-23.
  • Regional payroll tax rate to be progressively reduced to 1.2125 per cent from the 2020-21 to 2022-23 financial years. Definition of regional employer amended by removing the business location test.


Valuation of Land

  • The specific valuation provisions that applied to heritage properties no longer apply. This means that heritage properties will have their site value determined according to highest and best use principles, taking into account the effects of heritage status. Site value is used for land tax purposes.
  • This change commences from 19 June 2019 and has effect in relation to any objections, appeals or reviews to a site value as at 1 January 2018 or a later date.


For more details, check out the State Revenue Office website