The Victorian State Government has introduced new measures as part of the 2023-24 Victorian Budget, which have now received Royal Assent. Below are some of the major changes that have an impact on a wide range of businesses and investors.
Land tax
A temporary land tax surcharge has been introduced from 2024, expiring after 10 years.
A $500 flat surcharge will apply on taxable landholdings value between $50,000 and $100,000,
A $975 flat surcharge will apply on taxable landholdings value between $100,000 and $300,000 ($250,000 for trusts),
For taxable landholdings value over $300,000 ($250,000 for trusts), besides a $975 flat surcharge, an increased rate of land tax by 0.10 percentage points will also apply.
Properties exempt from land tax will still be exempt from the surcharge.
Absentee owner surcharge (AOS)
Since the 2024 land tax year, the tax‑free threshold for non-trust absentee owners has been reduced from $300,000 to $50,000 and the AOS rate has been raised from 2% to 4%. Investors that are classified as absentee owners are reminded to notify the State Revenue Office of their absentee owner status to avoid penalties.
Payroll tax
A temporary payroll tax surcharge commenced from 1 July 2023, expiring after 10 years.
A surcharge of 0.5% will apply to businesses with national payrolls above $10 million,
An additional 0.5% will apply to businesses with national payrolls above $100 million.
The surcharge is based on payroll expenses exceeding the relevant threshold.
Changes are also made to the annual payroll tax-free threshold.
From 1 July 2024, the annual payroll tax-free threshold is raised from $700,000 to $900,000,
From 1 July 2025, the annual payroll tax-free threshold increases to $1 million.
From 1 July 2024, for employers with annual wages between $3 million and $5 million, the allowable deduction will be phased out for them. Once the annual wages exceed $5 million no allowable deduction would apply.
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