On Tuesday 24 November, the Victorian Treasurer, Tim Pallas announced the 2020-21 budget, detailing a number of measures focused on creating jobs, supporting families and helping small to medium businesses.

Recognising the key role a business led recovery must play in steering Victoria towards growth into 2021 and beyond, the budget has a strong focus on growing jobs, stimulating trade and boosting innovation and investment across the state.

Measures to keep business direct and indirect costs low are a feature of the budget.

In the wake of the devastating impact the bushfires at the start of the year and the impact of COVID-19, the 2020-21 budget provides a major boost to Victorian business confidence and activity at a time when it is most needed.
On the downside the spending commitments of the government will push net debt to almost $155 billion by 2023 – 24.

The key announcements in the government’s budget include:

• An investment of $5.3 billion in social and affordable housing
• $49 billion on major infrastructure projects including significant new rail and transport construction.
• $1.9 billion for construction of new buildings for schools
• A new stamp duty discount for properties with a value not exceeding $1million aimed at boosting property development.
• Payroll tax concessions

A further breakdown of the Victorian State Budget for 2020-21 is below:

Businesses

Deferred payroll tax repayments for small and medium businesses

• Businesses that deferred their payroll tax for 2020-21 as part of the Government’s response to the coronavirus pandemic will be able to repay the deferred liabilities in quarterly instalments over the 2021-22 financial year.

Annual payments of payroll tax

• From 1 July 2021, employers will be able to pay payroll tax annually if their annual Victorian payroll tax liabilities are less than $1 million.

New payroll jobs tax credit

• A payroll tax credit will be introduced to encourage small and medium-sized businesses to re-employ staff, restore staff hours and hire additional staff
• Businesses with annual Australian group wages of less than $10 million will receive a non-refundable payroll tax credit of 10 cents for every dollar of Victorian wages paid in 2020-21 and 2021-22 above the previous year’s wage.

Breakthrough Victoria Fund

• The Government will contribute $2 billion over the next 10 years to drive research and innovation in the medical research, health and life-sciences, agri-food, advanced manufacturing, clean energy and digital technologies industries.

 
Housing/Land 

Land tax payment deferral

• Landowners that have at least one non-residential property and total taxable landholdings below $1 million, can access a deferral of their 2020 land tax liability until 31 March 2021
• Residential landlords who provide eligible tenants with rent relief consistent with the principles of the Support to Landlords and Tenants package, may receive a 25 per cent reduction on the property’s 2021 land tax, with any outstanding amounts able to be deferred until 30 November 2021.

Vacant residential land tax

• 2021 vacant residential land tax liabilities that arise due to property vacancies in 2020 will be waived.

Discount for build-to-rent projects

• From 1 January 2022, there will be a 50% land tax discount and an exemption from the Absentee Owner Surcharge for eligible new developments until 2040.

Extended Regional First Home Owner Grant

• The $20,000 First Home Owner Grant for people buying or building a new home in Regional Victoria has been extended to apply to contracts of sale entered into up until 30 June 2021.

Land tax exemption for certain not-for-profit clubs

• From 1 January 2021, a land tax exemption will apply for land owned and occupied by clubs that provide for the social, cultural, recreational, literary or educational interests of their members. This replaces the concessional rate that currently applies to these clubs.

 Stamp duty waiver for residential property transactions

• A 50% reduction of stamp duty (excluding any Foreign Purchaser Additional Duty) will apply for new residential dwellings with a dutiable value of up to $1 million and 25% reduction for existing residential dwellings ( also up to $1 million) for contracts entered into from 25 November to 30 June 2021.

Concession for commercial and industrial properties in Regional Victoria

• A 50% stamp duty concession will apply for commercial and industrial property transactions in Regional Victoria for contracts entered into from 1 January 2020.

 
If you have further questions about your eligibility to access the above, please call us to discuss your specific circumstances.

Your Accountant