Changes to state taxes November 2015
The State Taxation Acts Further Amendment Act 2015 (Amending Act) received Royal Assent on 1 December 2015. This Act introduced changes to the Duties Act 2000, Payroll Tax Act 2007 and Valuation of Land Act 1960.
Duties Act 2000
The State Revenue Office and Department of Economic Development, Jobs, Transport and Resources jointly administer livestock duty, which is payable on the sale of cattle, sheep, goats and swine. The Amending Act includes bison in the definition of cattle. Accordingly, from 1 January 2016, livestock duty will be payable on the sale of bison (and their carcasses).
Payroll Tax Act 2007
The Amending Act amends the Payroll Tax Act 2007 to update the requirements for the payroll tax exemption available for wages paid or payable to a new entrant apprentice or trainee employed by an approved group training organisation. These amendments align the definition of 'new entrant' in the Payroll Tax Act 2007 with the current practice of group training organisations and the framework for apprentices and trainees under the Education and Training Reform Act 2006. The amendments commence on 1 July 2016, in line with the commencement of the next payroll tax year.
Valuation of Land Act 1960
The Amending Act also makes a number of technical changes to the Valuation of Land Act 1960 which impact the land tax regime. These amendments:
- Provide a mechanism for apportioning the capital improved value or site value of land or part of land that is non-rateable, non-leviable land and which cannot be separately valued. This amendment will allow apportioning of valuations in circumstances where it is necessary to apportion the site value of land that is assessable for the purposes of land tax, but not assessable for council rates (non-rateable) or the fire services property levy (non-leviable).
- Enable the Valuer-General to provide copies of a supplementary valuation to a rating authority other than a council.
- Allow the Valuer-General to accept a late nomination from a council requesting the Valuer-General undertake the biennial general valuation on their behalf.
- Bring forward the date for the return of biennial general valuations from 30 June to 30 April. This amendment commences on 1 July 2016 and therefore applies from the 2018 general valuation cycle.
- Enable a supplementary valuation to be made where rateable land or non-rateable leviable land changes status. The amendment ensures that a valuation authority can record and report on changes to the rateable and/or leviable status of land via a supplementary valuation.
Changes to state taxes June 2015
The State Taxation Acts Amendment Act 2015 (the Amending Act) received Royal Assent on 29 June 2015 and introduces changes to the Duties Act 2000, Land Tax Act 2005 and Taxation Administration Act 1997.
Duties Act 2000
The Duties Act 2000 was amended to introduce two new Budget measures.
1. Foreign purchaser additional duty
Foreign purchasers who buy or acquire residential property (either directly or indirectly) will pay duty of 3 per cent of the dutiable value in addition to the current land transfer duty (or landholder duty) payable on the transaction.
The additional duty applies to contracts, agreements and arrangements entered into on or after 1 July 2015.
If the acquisition of a property by a foreign purchaser is exempt from land transfer duty, it will also be exempt from additional duty.
2. Motor vehicle duty exemption for mobile plant and special purpose vehicles (type P)
The Amending Act introduces motor vehicle duty exemptions for the registration, or transfer of registration, of mobile plant and plant-based special purpose vehicles.
These vehicles include body types such as backhoes, excavators, bulldozers, headers, scrapers, tractors and off-road water sprayers.
These exemptions will apply from 1 July 2015.
Land Tax Act 2005
The Amending Act amends the Land Tax Act 2005 to introduce an absentee owner surcharge for land owners who do not ordinarily reside in Australia. This is in addition to any other land tax payable.
The 0.5 per cent surcharge is payable on all taxable land owned or deemed to be owned by an absentee owner. It will apply from the 2016 land tax year.
An absentee owner includes the following absentee persons who own land:
- Natural persons who are not Australian citizens or residents and who do not ordinarily reside in Australia.
- Corporations that are incorporated outside Australia.
- Corporations in which an absentee person, or absentee persons together, hold a controlling interest of more than 50 per cent.
- A trustee of a trust, in which one or more of the beneficiaries of the trust are absentees.
The surcharge will only apply to taxable land. Accordingly, land that is exempt under an existing land tax exemption, such as primary production land, will also be exempt from the surcharge.
The Amending Act also introduces provisions to require a person who is an absentee owner on 31 December to notify the Commissioner in writing before 15 January in the following year.
Similarly, a person who ceases to be an absentee owner must lodge a written notice with the Commissioner before 15 January in the following year.
A person's failure to notify the Commissioner of circumstances that result in their being an absentee owner will be a notification default for the purposes of the penalty provisions in the Taxation Administration Act 1997.
The Treasurer, or the Commissioner of State Revenue, under a delegation from the Treasurer, may exempt an absentee person who has a controlling interest in the corporation in accordance with guidelines published in the Government Gazette.
The Amending Act also makes a series of minor technical amendments to the Duties Act 2000. These address certain issues identified by the SRO and:
- Clarify definitions in relation to 'private companies', 'shares' and 'units' for the purposes of applying the landholder duty provisions.
- Update references to Commonwealth legislation in relation to Seniors Health Cards and private health insurance.
- Clarify the circumstances in which a person makes a relevant acquisition in a landholder for the purposes of Part 2 of Chapter 3.
- Update definitions for the purposes of the duty exemption for primary producer vehicles to align the relevant definitions with the Road Safety (Vehicles) Regulations 2009 to ensure consistency of application.
These amendments are consistent with the existing policy intent of the provisions and will not impact on the amount of duty payable.
Taxation Administration Act 1997
The Amending Act introduces changes to the Taxation Administration Act 1997 to extend the circumstances in which the SRO can offset overpayments and refunds.
These amendments will allow the Commissioner:
- With the written consent of the taxpayer, to offset a refund against a future liability which arises within 60 days after the refund becomes payable.
- To offset a refund which results from an objection, review or appeal against an existing liability or, with the taxpayers consent, against a future liability.
These amendments will apply to refund applications received on or after 30 June 2015 and to objections lodged on or after 30 June 2015.
The Amending Act also amends the definition of notification default to include a failure to notify the Commissioner of their status as an absentee owner.