The State Taxation and Mental Health Acts Amendment Act 2021 received Royal Assent on 16 June 2021 and introduces changes to several Acts. It includes revenue and tax relief initiatives announced on 20 May 2021 as part of the 2021–22 Victorian Budget.
The Gambling Regulation Amendment (Wagering and Betting Tax) Act 2021 also received Royal Assent on 16 June 2021.
State Taxation and Mental Health Acts Amendment Act 2021
Budget amendments
Duties Act 2000
- A new threshold and premium rate of land transfer duty (stamp duty) will be introduced for high-value property transactions with a value above $2 million. For contracts entered into on or after 1 July 2021, the duty payable will increase to $110,000 plus 6.5% of the dutiable value in excess of $2 million.
- Temporary land transfer duty (stamp duty) concessions will apply to purchases of new residential properties in the City of Melbourne with a dutiable value up to $1 million.
- A 50% concession will be available for new residential properties that have been unsold for less than 12 months where the contract is entered into on or after 1 July 2021 and on or before 30 June 2022.
- A full exemption will be available for new residential properties that have remained unsold for 12 months or more since completion of construction where the contract is entered into on or after 21 May 2021 and on or before 30 June 2022.
- The eligibility threshold for the off-the-plan duty concession will temporarily increase to $1 million for all home buyers for contracts that are entered into on or after 1 July 2021 and on or before 30 June 2023.
Land Tax Act 2005
- Land tax rates will increase for high-value landholdings from the 2022 land tax year:
- for taxable landholdings exceeding $1.8 million - the land tax rate will rise by 0.25 percentage points, and
- for taxable landholdings exceeding $3 million - the land tax rate will rise by 0.30 percentage points.
- The general land tax threshold will increase from $250,000 to $300,000 from the 2022 land tax year. The land tax threshold for land held on trust remains unchanged at $25,000.
- The vacant residential land tax exemption for new developments will be extended to apply for up to two tax years from the 2022 land tax year.
Payroll Tax Act 2007
- The payroll tax threshold will increase from $650,000 to $700,000 from 1 July 2021.
- The regional employer payroll tax rate will reduce from 2.02% to 1.2125% from 1 July 2021.
- The mental health and wellbeing levy will be introduced from 1 January 2022. The mental health and wellbeing levy is a payroll tax surcharge on wages paid in Victoria by businesses with national payrolls over $10 million a year. A rate of 0.5% will apply for businesses with national payrolls above $10 million, and businesses with national payrolls above $100 million will pay an additional 0.5%.
Other amendments
Duties Act 2000
The Duties Act 2000 has been amended to cater for shared equity arrangements, where the State contributes to the purchase price of a home in exchange for an interest in the home or the proceeds of the future sale of the home, by confirming that home buyer concessions and exemptions can apply to the purchase of a home under a shared equity arrangement, and providing that duty does not apply if the homebuyer buys back the State’s interest in the home.
First Home Owner Grant Act 2000
The First Home Owner Grant Act 2000 will be amended from 1 July 2021 to enable the Commissioner of State Revenue to administer declared home buyer schemes, such as the Victorian Homebuyer Fund, which the Victorian Government announced in the 2020–21 Budget. The Victorian Homebuyer Fund will operate as a shared equity scheme where the fund will contribute to the purchase price in exchange for a proportionate interest in the property.
This amendment also renames the First Home Owner Grant Act 2000 to the First Home Owner Grant and Home Buyer Schemes Act 2000 from 1 July 2021.
Land Tax Act 2005
The Land Tax Act 2005 will be amended from 1 July 2021 to:
- exclude unit trust schemes from the definition of a discretionary trust for land tax purposes,
- ensure land tax applies as intended to land held by a nominee on behalf of a partnership by deeming the partners to have a beneficial interest in all partnership property,
- allow the correct calculation of land tax for pre-2006 land owned by a trustee of a discretionary trust that is used and occupied by a nominated PPR beneficiary, and
- confirming the principal place of residence exemption can apply appropriately to a home purchased under a shared equity arrangement.
Payroll Tax Act 2007
The Payroll Tax Act 2007 has been amended to ensure the lower rate of payroll tax for regional Victorian employers applies correctly to schedule groups containing regional employers in bushfire-affected areas who received payroll tax relief in 2020. This amendment has retrospective effect from 1 July 2019 as the relevant payroll tax relief applied from that date.
Gambling Regulation Amendment (Wagering and Betting Tax) Act 2021
Gambling Regulation Act 2003
From 1 July 2021, the wagering and betting tax rate will increase from 8% to 10%.
