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Changes to state taxes December 2017

The State Taxation Acts Further Amendment Act 2017, which received Royal Assent on 19 December 2017, introduces changes to various Acts including the Congestion Levy Act 2005, Duties Act 2000, Fire Services Property Levy Act 2012, Land Tax Act 2005, Payroll Tax Act 2007, Taxation Administration Act 1997, Unclaimed Money Act 2008, Valuation of Land Act 1960 and Victorian Civil and Administrative Tribunal Act 1998.

Congestion Levy Act 2005

The Congestion Levy Act 2005 has been amended as follows:

  • The Act currently exempts parking spaces provided at the Melbourne Zoo for all staff and visitors. The boundary relating to the exemption has been expanded by 200 metres to ensure parking spaces located just outside the Melbourne Zoo, which are used by zoo visitors and staff, are exempted as intended. 
  • The exemption for parking spaces used only for shift workers is now better targeted so that only parking spaces reserved for and used solely by employees of a 24/7 enterprise, who are regularly rostered to work shifts there, are exempt. 
  • A congestion levy exemption now applies for parking spaces provided on land owned by the Abbotsford Convent Foundation.

Duties Act 2000

The Duties Act 2000 has been amended to:

  • Confirm the legislative basis for charging foreign purchaser additional duty (FPAD) on dutiable transactions under which a land-related interest in residential property is transferred to a foreign purchaser and the transfer is otherwise chargeable with duty. The provision is taken to have come into operation on 1 July 2015, being the commencement of the FPAD provisions and is consistent with current administrative practice.
  • Clarify the application of the first home buyer duty concession calculation formula so it reflects the concessional amount of duty payable.

Fire Services Property Levy Act 2012

Provisions for the service of documents and payments in the Fire Services Property Levy Act 2012 have been updated to reflect administrative and postal changes. 

The postal delivery timeframe for documents served by the Commissioner has changed from two to seven business days to more closely align with Australia Post’s delivery timeframes. Documents and payments sent electronically or by fax are taken to have been received by the Commissioner at the actual time of receipt, even when received outside business hours.

Land Tax Act 2005

The Land Tax Act 2005 provides an exemption from the Absentee Owner Surcharge (AOS) for Australian-based absentee corporations conducting a commercial operation in Australia and whose commercial activities make a significant contribution to the Victorian economy and community. The AOS exemption has now been extended to allow absentee trusts to qualify.

The land tax legislation also currently calculates the amount of the AOS for land held under a chain of trusts based on the interest in the first trust held by the trustee of the second trust. The amendments will provide that the AOS will now be calculated on the proportion of absentee beneficiaries’ interests in the land subject to the trust. This ensures that the AOS calculation is a truer reflection of the absentee beneficiaries’ interest in the land.

These changes apply from the 2018 tax year.

Payroll Tax Act 2007

The exemption for wages paid to a new apprentice or trainee by an approved group training organisation has been extended to 'for-profit' organisations that are declared an approved group training organisation. This new exemption applies from 1 July 2018.

Taxation Administration Act 1997

The Taxation Administration Act 1997 has been amended as follows:

  • References to certain authorised recipients listed in the secrecy provisions of the Act have been updated.
  • A provision under the Act, which allowed a tax officer to disclose details of the duty paid in land transfer duty transactions via an online look-up service, has been repealed.
  • The postal delivery timeframe for documents served by the Commissioner has changed from two to seven business days to more closely align with Australia Post’s delivery timeframes. Documents and payments sent electronically or by fax are taken to have been received by the Commissioner at the actual time of receipt, even when received outside business hours.
  • The Act now contains new provisions enabling future electronic service by the Commissioner, for example by providing taxpayers with access to a secure internet site similar to myGov. Taxpayers choosing this form of communication can be notified by the SRO by email or text message that an assessment or other correspondence can be accessed via a secure inbox.

Unclaimed Money Act 2008

The postal delivery timeframe for documents served by the Registrar of Unclaimed Money has changed from two to seven business days to more closely align with Australia Post’s delivery timeframes. Documents and payments sent electronically or by fax are taken to have been received by the Registrar at the actual time of receipt, even when received outside business hours.

Valuation of Land Act 1960

The Valuer-General Victoria will be the sole valuation authority conducting valuations of all lands in Victoria. General valuations will be conducted annually from the beginning of 2019. Individual councils are able to “opt-out” of the centralised Valuer-General system until 2022. The State Government will pay the full cost of annual revaluations, with councils paying for supplementary valuations.

Victorian Civil and Administrative Tribunal Act 1998

The definition of 'taxing Act' has been updated to cover all laws administered by the SRO which provide for referrals to or reviews by the Victorian Civil and Administrative Tribunal.

Changes to state taxes June 2017

The State Taxation Acts Amendment Act 2017 received Royal Assent on 27 June 2017 and introduced changes to various Acts. It included revenue initiatives announced as part of the Homes for Victorians housing package and in the 2017-18 Victorian Budget.

The Duties Act 2000, First Home Owner Grant Act 2000, Land Tax Act 2005, Payroll Tax Act 2007, Planning and Environment Act 1987, Taxation Administration Act 1997, and  Unclaimed Money Act 2008 have all been amended.

Budget announcements

Duties Act 2000

The exemption from duty for transfers between spouses/domestic partners is available only for a principal place of residence transfer from 1 July 2017. The exemption no longer applies to transfers of investment or commercial properties between spouses/domestic partners. The exemption for transfers of property following a relationship breakdown has not been altered or removed. It continues to apply to all properties, including investment and commercial properties.

The rate of motor vehicle duty for new (and near new) passenger vehicles which do not exceed the luxury car tax threshold will be $8.40 per $200 from 1 July 2017. This aligns with the rate of duty which applies to used cars. The luxury car tax threshold for 2017-18 is $65,094.

Insurance taken out for 'agricultural products' is exempt from insurance duty from 1 July 2017. This covers insurance for different types of crops, livestock and for various assets used as part of primary production activity.

First Home Owner Grant Act 2000

Australian Defence Force personnel are exempt from the first home owner grant residency requirement from 27 June 2017. The exemption applies to current members of the Australian Army, Air Force or Navy who are enrolled to vote in Victorian elections and are either on duty or leave. The exemption does not apply to Australian Army, Air Force or Navy reservists or to Australian Public Service staff. 

Payroll Tax Act 2007

Previously announced payroll tax threshold increases have been brought forward by 12 months. The threshold for 2017-18 is $625,000. The threshold will be increased to $650,000 for 2018-19.

A reduced payroll tax rate of 3.65 per cent is available to qualifying regional businesses from 1 July 2017. A regional business is a business with an ABN registered in regional Victoria which pays at least 85 per cent of its payroll to regional employees. Regional Victoria has the same meaning as it does for the purposes of the first home owner grant.

Homes for Victorians announcements

Duties Act 2000

Land transfer duty has been abolished for first-home buyers who purchase a property valued at or below $600,000 and phased in for properties valued up to $750,000. The exemption and concession apply to dutiable transactions arising from a contract entered into on or after 1 July 2017.

The off-the-plan duty concession is restricted to properties acquired by owner/occupiers who are eligible for the principal place of residence or first home buyer duty concessions. The concession is no longer available for residential investment property purchases or commercial property purchases. These changes apply where the contract is entered into on or after 1 July 2017.

First Home Owner Grant Act 2000

The First Home Owner Grant (FHOG) has been doubled to $20,000 for new home purchases in regional Victoria. First-home buyers of new homes in metropolitan Melbourne will continue to receive the $10,000 FHOG amount.

The $20,000 FHOG is available to first-home buyers who purchase a new home valued up to $750,000 in regional Victoria. The property must be used as their primary place of residence for a continuous period of 12 months, commencing within 12 months of completing the eligible transaction. It applies to contracts entered into from 1 July 2017 to 30 June 2020. 

Land Tax Act 2005

From 1 January 2018, vacant residential properties in the inner and middle ring of Melbourne will be subject to a vacant residential land tax of 1 per cent of the property’s capital improved value.

A property will be considered vacant if it is unoccupied for six months or more in a calendar year. The six months does not need to be continuous. Land owners will be required to notify the Commissioner in writing by 15 January if they own vacant residential land in the previous year.

Existing land tax exemptions may apply to vacant residential land but there are some new exemptions which apply solely for the purposes of the vacant residential land tax. These exemptions include holiday homes, city properties used for work purposes, property transfers during the year and new residential properties. 

Transitional arrangements will be in place for the 2018 tax year. All properties will be deemed 'occupied' for the purpose of this tax for the period January to April 2017 (inclusive) to give property owners sufficient time to consider the impact and adjust their behaviour accordingly.

Other amendments

Duties Act 2000

Amendments have been made to:

  • Remove the requirement for statutory declarations to be lodged with the Commissioner for off-the-plan transactions or sub-sale arrangements, and consequently increases the penalties for providing false or misleading information.
  • Close certain loopholes in the sub-sale arrangement provisions. The amendments:
    • Provide a new mechanism to calculate the duty payable on a sub-sale transfer where partial interests are acquired.
    • Ensure a sub-sale arrangement cannot obtain multiple exemptions that result in less than 100 per cent duty being payable on the transfer.
    • Insert new provisions to ensure option arrangements where additional consideration is given to acquire the transfer right are dutiable.
    • Remove the reference to 'excluded costs' in the provisions that determine the dutiable value of a subsequent transaction.
  • Recognise the New York Stock Exchange and the London Stock Exchange as acceptable exchanges for public landholder status and allow exchanges that choose not to be a member of the WFE, but would nevertheless meet all relevant criteria for membership, to be an acceptable exchange for public landholder status under the landholder provisions without the need for future legislative amendment.

Planning and Environment Act 1987

The Planning and Environment Act 1987 has been amended so the CPI adjusted metropolitan planning levy threshold amount can be rounded to the nearest $1000.

Taxation Administration Act 1997

The Taxation Administration Act 1997 has been amended to:

  • Make Part 6 of the Livestock Disease Control Act 1994 and any regulations made under that Act a taxation law. This allows data obtained in the administration of livestock duty to be used for the administration of Victoria's taxation laws generally.
  • Increase the statutory maximum penalty for offences relating to false and misleading statements and omissions.
  • Authorise the collection and disclosure of information about transfers of interests in real property for the purposes of reporting to the Commissioner of Taxation of the Commonwealth,.
  • Authorise the disclosure of information by taxation officers for verification purposes.
  • Enable the vacant residential land tax to be administered in the same way as other land taxes.

Unclaimed Money Act 2008

It is now an offence under the Unclaimed Money Act 2008 for a person to provide false or misleading information in relation to a claim for unclaimed money listed in the register. The offence provisions for giving false or misleading information have been updated accordingly and there is an increase in the statutory maximum penalty.

Last modified: 15 July 2022
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