The State Taxation Further Amendment Act 2024 received Royal Assent on Tuesday 3 December 2024. The Act introduces changes to several Acts and includes changes to vacant residential land tax, payroll tax, commercial and industrial property tax, land transfer duty, as well as foreign purchaser additional duty and absentee owner surcharge.
Our website will be updated with further information over the coming weeks.
Vacant residential land tax (VRLT)
Holiday homes owned by companies and trusts
The principal place of residence requirement for the holiday home exemption for land held by companies and trusts has been amended so that it can be satisfied if the interest in the landholding company or trust is held by a natural person or persons, either directly or indirectly.
The holiday home exemption will be amended to ensure that the exemption continues to apply after the death of the owner of the land, or where the land is owned by a company, after the death of sole shareholder of the company, provided a relative of the deceased satisfies the principal place of residence and use and occupation requirements for the exemption.
Additionally, the holiday home exemption will be expanded to allow the exemption to apply where there has been a change of trustee of an existing trust after 28 November 2023, provided that all other requirements for the exemption are met following the change of trustee.
Other VRLT amendments
From 1 January 2025, the Land Tax Act 2005 is amended to exclude land located in alpine resort area in Victoria from the imposition of VRLT.
The Land Tax Act 2005 is also amended to clarify the application of the 5-year rule for unimproved land – land which meets the requirements of being vacant in the 5 calendar years preceding 2026 will be liable to VRLT in 2026 (when the new rules commence) if no exemption applies.
Payroll tax
From 1 July 2025, the Payroll Tax Act 2007 is amended to introduce a payroll tax exemption for payments made to contractor general practitioners (GPs) and to employee GPs by general practice medical clinics which bulk bill their services and are subject to payroll tax.
The Payroll Tax Act 2007 is amended to expressly authorise the Commissioner to make a reassessment of payroll tax under the Taxation Administration Act 1997 beyond 5 years after the initial assessment of payroll tax, in circumstances where an employer has underpaid wages.
Commercial and industrial property tax reform
The Duties Act 2000 is amended to introduce new upfront duty exemptions and concessions for certain non-standard transactions (e.g. transactions in relation to dutiable leases, or the acquisition of fixtures or economic entitlements) where appropriate duty has previously been paid as part of the land entering the commercial and industrial property tax reform scheme. Where full duty has not been paid, the Commissioner will have discretion to fully or partially exempt the non-standard transaction from duty based on legislative factors that guide the application of the discretion. These amendments take effect from the day after Royal Assent.
Pensioner and concession card holder duty
The Duties Act 2000 will be amended to enable the pensioner and concession card duty reduction to apply to the purchase of a home by the guardian of a person with a legal disability who is an eligible cardholder, or to the purchase of a home by the trustee for a special disability trust where the principal beneficiary is an eligible cardholder, as well as equivalent amendments to the first home buyer duty concession or exemption in similar circumstances where the principal beneficiary is a first home buyer.
Similarly, the First Home Owner Grant and Home Buyer Schemes Act 2000 will be amended to allow the first home owner grant to be paid on the purchase of a home by the trustee of a special disability trust where the principal beneficiary is an eligible first home buyer.
Friendly societies
From 1 January 2025, the Duties Act 2000 is amended to abolish the current land transfer duty exemption available to friendly societies . The Duties Act 2000 is also amended to restrict the current insurance duty exemption available to friendly societies to ensure that only societies that have a mutual structure and beneficial objects are eligible for the exemption. The abolition of the land transfer duty exemption applies from the day after Royal Assent, while the insurance duty changes take effect from 1 January 2025.
Foreign purchaser additional duty (FPAD) and absentee owner surcharge (AOS)
The Duties Act 2000, Land Tax Act 2005 and Taxation Administration Act 1997 are amended to ensure that liability of foreign purchasers and absentee owners of land from certain countries to pay FPAD and AOS for the period 1 January 2018 to 8 April 2024 are imposed as they were intended to be imposed, aligning with amendments recently made by the Commonwealth.
Land Tax Act 2005
The Land Tax Act 2005 is amended to ensure that land owned or managed by a charitable institution and occupied or available for occupation by a resident exclusively in connection with the institution’s charitable purpose for the relief of poverty will be exempt from land tax.
The Land Tax Act 2005 is also amended to expand the definition of an excluded trust to include a trust whose beneficiaries are non-racing clubs referred to in section 73A of the Land Tax Act 2005 as well as to trusts whose beneficiaries are limited to non-profit organisations the primary purpose or objective of which is to conduct sporting activities or outdoor recreational, outdoor cultural or similar outdoor activities, or the members of such organisations consistent with the current exemption in section 72 of the Land Tax Act 2005. These amendments take effect from the day after Royal Assent.
Valuation of Land Act 1960
Amendments are made to the Valuation of Land Act 1960 to give final effect to the transition of responsibility for valuations from local councils to the Valuer-General. TheValuation of Land Act 1960 is amended to improve the operation of objection, review and appeal provisions and to make other technical changes.
