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State Budget Summary 2020-21

2020/21 Victorian Budget: Summary

3 December 2020 

Please note this article is correct at the time of publication but the State Budget is subject to change.

The 2020 State Budget has been announced by the Victorian Government with many enticing proposals. Instead of a lengthy look at all the changes that were made, we’ve compiled some of the more important key points to come out of the 2020/21 Victorian Budget.
 

Payroll Tax:

  • More than $2 billion in tax deferrals, including allowing businesses with payrolls of up to $10 million to defer their 2020-21 payroll tax liabilities for up to 12 months. This represents a $1.7 billion cash flow boost to businesses in 2020-21.

  •  Employers will have the option to pay Payroll Tax annually with an increase in the annual reporting threshold for Payroll Tax, from $40,000 to $100,000, for businesses registered for payroll tax in Victoria — expected start date 1 July 2021.

  • Businesses with annual Australian group wages below $10 million will receive a non-refundable tax credit of 10 cents for each dollar of Victorian taxable wages paid in 2020-21 and 2021-22 above the wages paid in the previous financial year.

Land Tax:

  • A 50% land tax discount for eligible build-to-rent developments, including an exemption from the absentee owner surcharge, expected start date is the 2022 land tax year.

  • A land tax exemption for land owned and occupied by clubs that provide for the social, cultural, recreational, literary or education interests of their members.

  • Land tax relief previously announced as part of Victoria’s COVID-19 support package:
    • For commercial and residential landlords that provide eligible tenants with rent relief - up to 50% relief on 2020 land tax (exclusive of any Absentee Owner Surcharge) with the remainder to be deferred until March 2021;
    • For small and medium businesses that operate from owner-occupied properties and landlords who are unable to secure a tenant because of public health restrictions – 25% relief on 2020 land tax;
    • For eligible residential landlords – 25% relief on 2021 land tax, with outstanding amounts to be deferred until 31 November 2021; and
    • A land tax deferral for 2020 land tax liability until 31 March 2021 for taxpayers that have at least one non-residential property and total taxable landholdings below $1 million.

Transfer Duty:

  •  A land transfer (stamp) duty waiver of up to 50% on purchases of residential property in Victoria with a dutiable value of up to $1 million — applies to contracts entered into on or after 25 November 2020 and before 1 July 2021.

  • A 50% land transfer duty concession for commercial and industrial property transactions in regional Victoria for contracts entered into from 1 January 2021 (rather than 1 July 2023 as announced in the 2019-20 state budget).

Other relief measures

  • A $20,000 First Home Owner Grant for people buying or building a new home in regional Victoria, for contracts of sale entered into up until 30 June 2021.

  • Waiver of liquor licence renewal fees for 2020 for affected venues and small businesses. Further liquor licence renewal fee relief will be provided for 2021, for businesses most heavily affected by public health restrictions.

  • Full waiver of 2021 vacant residential land tax liabilities that arise due to property vacancies in 2020.

 
Of course, there are many other items that came out of the State Budget, many of which will undergo further debate in the coming weeks. Hopefully, the State Government addressed some of your concerns.

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