Blog

The measures announced in the Victorian 2023/24 Budget by Treasurer Tim Pallas on Tuesday 23 May which covered, among other things, payroll tax, land tax, land transfer duty as well as WorkCover and business insurance, will result in a significant hit for large businesses and property owners, with some benefits for small businesses.

What’s included?

• Additional payroll tax of 0.5% applies to big business – businesses with a national payroll of more than $10 million will pay an additional payroll tax of 0.5%, or 1% if the national payroll exceeds $100 million from 1 July 2023.
• Increase WorkCover average premium rate to 1.8% – the WorkCover average premium rate will be increased from 1.27% to 1.8% from 1 July 2023, which will result in an average cost increase of 42%.
• Tax-free threshold for land tax is being lowered – for investment properties and holiday home owners, the tax-free threshold for land tax will be lowered from $300,000 to $50,000 from 2024 land tax year, which will impact about 380,000 landowners.
• The absentee owner surcharge will increase – for foreign investors, the absentee owner surcharge will increase from 2% to 4% in 2024 land tax year.
• Land transfer duty (stamp duty) will be abolished on commercial and industrial properties – from 1 July 2024, commercial and industrial properties will transition to the new system as they are sold, with the annual property tax to replace the previous stamp duty, which will be 1% of the property’s unimproved land value, to be payable from 10 years after the transaction.
• Business insurance duty will be scrapped over 10 years – the rate of duty, currently 10%, will be reduced 1% each year from 1 July 2024.
• Payroll tax-free threshold will increase for small business – for the businesses with wages below $5 million, the payroll tax-free threshold will increase from $700,000 to $900,000 from 1 July 2024, and then to $1 million on 1 July 2025.

Contact us if you would like to discuss how these updates may impact or benefit you or your business.