Changes to state taxes June 2024
Published on 05 June 2024
The State Taxation Amendment Act 2024 received Royal Assent on 4 June 2024.
The Act introduced measures announced in the 2024–25 Victorian Budget and makes amendments to various state taxation acts.
2024–25 Budget measures
Land tax exemption for social and emergency housing
The Land Tax Act 2005 has been amended to introduce exemptions from the 2025 land tax year for:
- land used as social housing or emergency housing.
- vacant land owned by a charity and declared to be held for future use as social housing or emergency housing.
The new exemptions complement existing land tax exemptions that apply to some social housing and emergency housing, such as the charity exemption and the public statutory authority exemption. However, the new exemptions are broader and can apply (for example) to privately-owned housing managed by a housing provider as social housing or emergency housing.
Waste levy
The waste levy is paid to the Environment Protection Authority by landfill operators based on the amount of waste they receive.
The Environment Protection Act 2017 has been amended to legislate the following changes to the waste levy from 1 July 2025:
- The levy rate for municipal waste and industrial waste received at metropolitan landfills will increase from $129.27 to $169.79 per tonne.
- The levy rate will increase proportionally at rural landfills, which attract lower levies than metropolitan landfills.
- The priority waste levy rates for Category C and D waste will increase that their rates remain the same as those for municipal and industrial waste received at metropolitan landfills.
The changes bring Victoria’s waste levy rates into greater alignment with the equivalent rates in South Australia and New South Wales.
Trust for Nature
The Victorian Conservation Trust Act 1972 has been amended to establish a trust account called the Vacant Land Conservation Covenants Account, which will help fund Trust for Nature to establish conservation covenants with private owners of unimproved residential land in metropolitan Melbourne.
Vacant residential land tax exemptions
Holiday homes owned by companies and trusts
The Land Tax Act 2005 has been amended to extend the vacant residential land tax (VRLT) exemption for holiday homes to land owned by some companies and trustees of trusts from the 2025 land tax year.
A company or trustee is eligible for exemption if:
- they have owned the land continuously since 28 November 2023, when the Government announced the expansion. This includes contracts signed before 28 November but settled after that date
- there have been no changes in beneficial ownership of the land since 28 November 2023 except for transfers involving relatives
- one or more specified persons below had a principal place of residence in Australia in the year preceding the tax year
- one or more specified persons, or their relatives, used and occupied the land as their holiday home for at least 4 weeks (whether continuous or aggregate) in that year
- the Commissioner is satisfied that the land was used and occupied as a genuine holiday home.
| Type of owner | Specified person or persons (must be natural persons) |
|---|---|
| Company | Shareholder or shareholders owning at least 50% of shares in the company |
| Trustee of unit trust scheme | Unitholder or unitholders owning at least 50% of units in the unit trust scheme |
| Trustee of fixed trust | Beneficiaries holding at least 50% of the beneficial interest in the trust property |
| Trustee of discretionary trust | Specified beneficiaries of the discretionary trust or their relatives |
Contiguous land to exempt holiday homes
The Land Tax Act 2005 has been amended to exempt unimproved residential land in metropolitan Melbourne from VRLT if the land is contiguous to an exempt holiday home and enhances the use and occupation of the holiday home.
This change takes effect from the 2026 land tax year. From 2026, unimproved residential land in metropolitan Melbourne may attract VRLT if it has remained undeveloped for at least 5 years and is capable of residential development.
Other amendments
Metropolitan planning levy
The Planning and Environment Act 1987 has been amended to allow a refund of metropolitan planning levy (MPL) if:
- the applicant for a leviable planning permit application dies before the application was made and no other person is proceeding with the application
- the relevant planning scheme is amended before the leviable permit application is made, and because of the amendment, the proposed leviable development is no longer permitted or it no longer requires a permit.
The Planning and Environment Act 1987 has also been amended to extend the validity period of an MPL certificate issued by the Commissioner of State Revenue from 90 days to 180 days.
Land tax deductions
The Land Tax Act 2005 has been amended to correct an anomaly in the application of the flat $500 or $975 surcharge under the COVID Debt Repayment Plan to some joint owners and beneficiaries of trusts, ensuring they are not subject to a higher land tax liability than is intended.
The amendment commences retrospectively from 1 January 2024 so that the correct calculation of land tax applies for the 10-year duration of the COVID Debt Repayment Plan (2024 to 2033 land tax years).
Insurance duty
The Duties Act 2000 is amended to include Directors and Officers insurance and Cyber insurance in the definition of business insurance. This ensures these types of insurance are eligible for the gradual abolition of business insurance duty from 1 July 2024. This amendment takes effect from 1 January 2025 to give insurers sufficient time to update systems and processes.
The Duties Act 2000 is also amended to enable the Treasurer to declare a class of business defined by the Australian Prudential Regulation Authority to be business insurance under the Duties Act 2000, or exclude a kind of insurance from being business insurance, by notice published in the Government Gazette. This amendment takes effect from the day after Royal Assent.
Casino tax
The Gambling Taxation Act 2023 has been amended to empower the Commissioner of State Revenue to require the Victorian casino operator, by written notice, to produce documents, information or other things specified in the notice for a prospective period of up to 6 months. This amendment takes effect from the day after Royal Assent.
Growth areas infrastructure contribution
The Planning and Environment Act 1987 has been amended to provide that a subdivision under section 35 of the Subdivision Act 1988 is only an excluded subdivision for the purposes of growth areas infrastructure contribution (GAIC) if it subdivides land owned by a public authority or municipal council. This ensures the Planning and Environment Act 1987 interacts with the GAIC provisions as intended. This amendment takes effect from the day after Royal Assent.
Payroll tax
The Payroll Tax Act 2007 has been amended to prevent a non-government school that has not been declared exempt by the Minister for Education (undeclared school) from receiving a payroll tax exemption as a religious institution from 1 July 2024.
The Payroll Tax Act 2007 has also been amended to prevent a separate entity providing educational services to an undeclared school, in connection with that school's curriculum, from receiving a payroll tax exemption as a religious institution or a non-profit organisation or for educational services from 1 July 2024.
This amendment reinforces the policy of restricting the exemptions from payroll tax available to undeclared schools. It does not affect the status of any non-government schools that have been declared exempt by the Minister for Education, which continue to be exempt.
