Victorian Treasurer Tim Pallas handed down the Andrews Government’s second Budget yesterday and while it doesn’t always get the same amount of media attention as the Federal budget, there are certainly some items that small & medium business and high net worth individuals need to be aware of.
The Victorian economy has performed well over the past 12 months, as evidenced by the Government’s projected operating surplus of $2.9bn for 2016-17. Economic growth is projected to be 3% over the next 12 months, which is up from 2.5%. The unemployment rate will continue its downhill run from 6.5% in 2015 to a projected 5.7% in 2017.
Property-based taxes including stamp duty, land tax, the congestion levy and the Growth Areas Infrastructure Contribution are projected to contribute more than 42% of Victoria’s tax revenue base in 2016-17. So don’t expect any relief on stamp duty when you purchase your next house…..
** Important** Be aware, they are introducing a new tax compliance program which is expected to target non-compliance in the land tax and stamp duty areas.
In the land tax area, the government will focus on non-compliance in relation to the principal place of residence exemption, absentee owner surcharge, business partnerships that own land, and land held in trusts that have not yet been declared to the State Revenue Office. YOU ARE RESPONSIBLE for advising the SRO that you need to pay land tax. If you’re not sure, please contact the SRO or our office to discuss.
Also, the 2015-16 year saw the introduction of the foreign purchaser additional duty and absentee owner land tax surcharge in Victoria. This was the beginning of the state government’s initiative to tax foreign property developers and investors, and it has now been compounded by the government’s announcement that the rates of both surcharges will more than double in 2016-17.
Victoria is the only state that imposes these taxes.
Does your business pay PAYROLL TAX? The payroll tax threshold is set to increase, although it is still below the national average. The Victorian government has decided to increase the payroll tax threshold by $100,000 over the next four years, to $650,000, plus from 1 July 2016, there will be a payroll exemption available for wages paid to displaced apprentices or trainees.
This appears to be in addition to the existing payroll tax rebate of up to $5,000 available for employers who hire apprentices and trainees under the Victorian Government’s Back to Work scheme.
This measure represents a significant incentive for employers to hire apprentices and trainees in Victoria.
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Here’s a guide to the strategies you can use to minimise your business tax.
Now's the time to review what strategies you can use to minimise your tax before 30 June 2021.
Builders, electricians, plumbers, architects, real estate agents, security guards and other workers who hold an occupational licence in their home state or territory will soon be automatically deemed to have the necessary licence in other states.