Changes to State Taxes June 2008
The State Taxation Acts Amendment Act 2008 which received Royal Assent on 17 June 2008, introduced the state taxation measures announced in the State Budget on 6 May 2008 and addressed a number of non-Budget related state taxation matters. For more details, please refer to the General Information Bulletin GEN01/08.
Payroll Tax Annual Reconciliation 2007-08
As a consequence of payroll tax harmonisation between Victoria and NSW, employers will see some changes when completing their 2007-08 Annual Reconciliation return (previously known as the Annual Adjustment return). For more details, please refer to the Payroll Tax Bulletin PTX 01/08.
2008 Victorian Budget
The Treasurer John Lenders announced cuts to business and property taxes, extended benefits for first home buyers and a regional first home bonus for newly constructed homes, as part of the 2008 Victorian State Budget.
The Victorian Government has announced significant changes to land tax, duties on land transfers, Payroll Tax and the First Home Bonus.
First Home Bonus
The First Home Bonus will be extended to offer an additional $3000 grant to purchasers of newly constructed homes for those eligible for the First Home Bonus in regional Victoria.
Currently, a Bonus of $3000 for existing homes, or $5000 for new homes, is available across Victoria in addition to the $7000 First Home Owner Grant. The new $3000 regional bonus is additional to the existing $12,000 available for newly constructed homes valued under $500,000.
The regional Bonus is available for eligible contracts entered into on or after 6 May 2008.
DTF Fact Sheet - Assistance for homebuyers
Land Tax
Four significant changes to Land Tax were included in the Budget, effective from the 2009 Land Tax year. The changes are:
- The tax free threshold is increased to $250,000.
- Other thresholds will be adjusted by around 10%.
- The top rate of Land Tax will be reduced from 2.5% to 2.25%.
- A new exemption will be introduced for land occupied as long term residential accommodation for disabled persons.
DTF Fact Sheets - Land tax cuts | Cutting the cost of doing business
Duties
The Victorian Government’s changes will result in savings on duties on land transfers, and provide further concessions for first home buyers across the State. Budget initiatives include:
- Duties thresholds will be adjusted by around 10% (for duty on land transfers, Principal Place of Residence (PPR) concession, and Pensioner and Concession cardholder's concession thresholds).
- For the first time those eligible for the First Home Bonus will also receive the benefits of the PPR duty concession.
- A new exemption will be introduced for declarations of trust establishing special disability trusts, and for transfers of land into existing special disability trusts.
- For business, the existing corporate reconstruction duty exemption has been extended to apply to restructures of stapled entities in specified circumstances.
All duty on land transfer and Bonus related measures will take effect for contracts entered into on or after 6 May 2008. The exemption for special disability trusts applies to a declaration of trust made on or after 6 May 2008, or in the case of a transfer of dutiable property, to a contract entered into on or after 6 May 2008. The corporate reconstruction exemption will apply from 1 July 2008.
DTF Fact Sheets - Cutting the cost of doing business | Assistance for homebuyers
Payroll Tax
From July 1 this year, the Payroll Tax rate which was scheduled to drop from 5.05% to 5.00% will be reduced by a further 0.05% to be 4.95%.
DTF Fact Sheet - Cutting the cost of doing business
Media Release
A Media Release from the Office of the Treasurer was issued on May 6, 2008.
For copies of the Budget Papers, visit the State Budget website at www.budget.vic.gov.au
Congestion levy and land tax changes
The State Taxation and Accident Compensation Acts Amendment Act 2007 which received Royal Assent on 11 December 2007, made a number of changes to the Congestion Levy Act 2005 and the Land Tax Act 2005 among other things.
For more information on these changes, please refer to our General Information Bulletin GEN 04/07 'Changes to State Taxes - December 2007'
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