2015/16 Victorian State Budget
The Victorian Government 2015/16 State Budget was handed down on 5 May 2015.
The Budget Papers are available here.
The Budget announced changes to transfer duty imposed on the purchase of residential property, land tax and motor vehicle duty.
Transfer duty surcharge on foreign buyers of residential property
- Foreign purchasers of residential property in Victoria will pay a surcharge of 3% in addition to any other stamp duty payable. The surcharge is imposed on the greater of the purchase price or the market value of the property, and whether the property is purchased directly or indirectly.
- For example, a foreign purchaser who acquires a residential property in Victoria for $500,000 would pay a surcharge of $15,000 in addition to transfer duty $25,070 ordinarily payable on the purchase.
- Note that New Zealand citizens and permanent residents with foreign citizenship will be exempt from the surcharge.
- The surcharge will apply to contracts entered into on or after 1 July 2015 and is expected to raise $279m over four years.
Land tax surcharge on absentees
- A landowner who does not ordinarily reside in Australia will be liable for an absentee landowner surcharge of 0.5 per cent in addition to any other land tax payable.
- The absentee owner surcharge will apply from the 2016 land tax year (i.e. imposed on land holdings as at midnight on 31 December 2015).
- The surcharge is expected to raise $53m over four years.
The State Taxation Act Amendment Bill 2015 (‘the Bill’), currently before parliament includes provisions that enable the Treasurer in certain circumstances to exercise discretion to exempt certain entities from being subject to the surcharges outlined above. The principles and circumstances the Treasurer will consider are outlined in the Bill. The Victorian Government has also drafted guidelines intended to assist taxpayers understand the circumstances in which the Treasurer may exercise the discretion. The guidelines are available here.
Stamp duty exemption on mobile plant registration
- All vehicles classified as mobile plant (under 4.5 tonnes) and plant-based special purpose vehicles (type P) (over 4.5 tonnes) will be exempt from motor vehicle duty from 1 July 2015.
- “Mobile plant” is considered to be any non-passenger self-propelled vehicle constructed for specific tasks which may use public roads for access and that are under 4.5 tonnes.
- Plant-based special purpose vehicles are more than 4.5 tonnes and generally make little use of the road network, such as backhoes, excavators, bulldozers, headers, scrapers, tractors, off-road water sprayers.
- This initiative will reduce motor vehicle costs associated with running a business in Victoria and is expected to cost $11m over four years.