2016/17 Victorian State Budget

2016/17 Victorian State Budget

The Victorian Government 2016/17 State Budget was handed down on 27 April 2016.

The Budget Papers are available here.

The key announcements from the Budget include changes to the absentee landowner surcharge, the land transfer duty surcharge on foreign buyers of residential property and payroll tax.

 

Increase to the absentee landowner surcharge

  • A landowner who does not ordinarily reside in Australia is liable for an absentee landowner surcharge in addition to any land tax payable.
  • From 1 January 2017, the absentee landowner surcharge will be increased from 0.5 per cent to 1.5 percent.
  • This measure is expected to raise $112m over the four financial years ended 30 June 2020.

 

Land transfer duty surcharge on foreign buyers of residential property

  • Foreign purchasers of residential property in Victoria are subject to a 3 per cent surcharge in addition to any other stamp duty payable.
  • The land transfer duty surcharge will be increased from 3 per cent to 7 percent on the greater of the purchase price or the market value of the property, in addition to any other stamp duty payable.
  • The surcharge will apply to contracts entered into on or after 1 July 2016 and will be payable at settlement.
  • This measure is expected to raise $374m over the four financial years ended 30 June 2020.

 

Increase to the payroll tax threshold

  • The Victorian payroll tax threshold will be increased over the four financial years commencing 1 July 2016.
  • The threshold will be progressively increased by $25,000 per year and will be phased in as follows:

2016-17 – increase to $575,000;

2017-18 – increase to $600,000;

2018-19 – increase to $625,000; and

2019-20 – increase to $650,000

  • This measure is expected to cost $286m over the four financial years ended 30 June 2020.

 

Payroll tax exemption – apprentices and trainees

  • From 1 July 2016, a payroll tax exemption will be introduced for the wages paid or payable by an employer to a displaced apprentice or trainee.
  • This initiative will support employers hiring apprentices and trainees wishing to continue and complete their qualifications.
  • This measure is expected to cost $26m over the four financial years ended 30 June 2020.

 

State Revenue Office Land Tax Compliance Program

  • The Victorian State Revenue Office will undertake compliance programs in relation to:

the land tax principal place of residence exemption;

foreign purchaser additional duty;

absentee owner surcharge;

undeclared changes in the composition of business partnerships that own land; and

land held in undeclared trusts

  • Any potential compliance risks will be further investigated by the State Revenue Office and taxpayers will be assisted to improve compliance.
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