COVID Debt Repayment Plan

Temporary changes until 2033

As part of the 2023-24 State Budget, the Victorian Government introduced a COVID Debt Repayment Plan.

This included the following temporary changes to land tax and payroll tax, which are legislated to apply until 30 June 2033:

Land tax

From the 2024 land tax year, there has been a change to land tax rates and thresholds, for the total taxable value (site value) of landholdings:

• $50,000 to <$100,000 — a $500 flat surcharge will apply.
• $100,000 to <$300,000 (or <$250,000 for trusts) — a $975 flat surcharge will apply.
• ≥$300,000 (or ≥$250,000 for trusts) — a $975 flat surcharge will apply, plus an increase to the rate of land tax by 0.10 percentage points.

These increases have been incorporated into the applicable rates for the 2024 to 2033 land tax years. Find out more about current land tax rates.

Owners of certain land are entitled to a concessional treatment where each separate piece of land is assessed as if it is the only land owned by the owner. They include:

• charitable, municipal, public land that is taxable
• principal place of residence (PPR) land for nominated PPR beneficiaries of unit trust schemes and discretionary trusts.

For owners of these lands, the COVID debt surcharge is imposed only once based on the aggregated taxable value of their affected landholdings.

In addition, some owners of land are assessed for land tax at 2 levels. They include:

• joint owners of land
• land held on trust where a trustee of a fixed trust or unit trust has notified the Commissioner of the beneficial interests in the trusts.

Read more about how joint owners and such trusts are assessed. A taxpayer who is a member of only one joint ownership or a beneficiary of only one trust and owns no other lands individually will not be assessed at the secondary level. This also applies for the 2024 to 2033 land tax years and ensures that the flat component of the COVID debt surcharge is imposed only once.

Payroll tax

From 1 July 2023, a temporary payroll tax surcharge will apply on wages paid in Victoria by businesses liable for Victorian payroll tax with national payrolls over $10 million a year. 

A rate of 0.5% will apply for businesses with national payrolls above $10 million, and businesses with national payrolls above $100 million will pay an additional 0.5%. 

These tax changes are legislated to apply until 30 June 2033.