Changes taking effect on 1 July 2025
Published on 01 July 2025
The start of a new financial year means updates to some fees, thresholds, levies and rates. Here is a summary of the Victorian taxation changes taking effect on 1 July 2025. Our website is being updated to reflect the changes.The start of a new financial year means updates to some fees, thresholds, levies and rates. Here is a summary of the Victorian taxation changes taking effect on 1 July 2025. Our website is being updated to reflect the changes.
Emergency services and volunteers fund (ESVF)
The emergency services and volunteers fund (ESVF) takes effect from 1 July 2025. It replaces the fire services property levy.
The ESVF will support the vital work of a broader range of emergency services that respond to fires, floods, storms and other emergencies.
Rates and thresholds
Payroll tax
Payroll tax-free threshold
From 1 July 2025, the payroll tax-free threshold will increase from $900,000 to $1,000,000 for annual returns, and from $75,000 to $83,333 for monthly returns.
In addition, the payroll tax deduction continues to be phased out for employers and groups with wages between $3 million and $5 million, with no deduction applied for employers and groups with wages of $5 million or more.
Find out more about changes to the payroll tax threshold
Wages exempt from payroll tax
The exempt motor vehicle allowance rate will increase from 85 cents per kilometre to 88 cents per kilometre.
The exempt amount for accommodation allowances will increase from $318.90 per night to a rate TBC.
Find out more about wages exempt from payroll tax
Exemption for medical clinics
An exemption from payroll tax for wages paid or payable to contractor general practitioners and employee general practitioners in relation to fully-funded (which includes bulk-billed) consultations takes effect from 1 July 2025.
Find out more about payroll tax and the medical industry
Growth areas infrastructure contribution (GAIC)
The GAIC rates for the 2025–26 financial year will be:
- $118,830 per hectare for type A land ($115,530 in 2024–25)
- $141,150 per hectare for types B-1, B-2 and C land ($137,230 in 2024–25).
The GAIC threshold for excluded building will increase from $1,444,370 to $1,485,650.
Interest payable on deferred GAIC will decrease from 5.1331% to 5.0871%.
Metropolitan planning levy (MPL)
The MPL threshold will increase from $1,271,000 to $1,311,000.
Insurance
From 1 July 2024, duty on certain business insurance premiums is gradually being abolished over a 10-year period.
On 1 July 2025, duty on business insurance premiums will reduce from 9% to 8%.
Find out more about the abolition of duty on business insurance premiums
Motor vehicle duty – drive-away deals
The 2025–26 guidelines, used by licensed motor car traders to calculate the dutiable value of motor vehicles sold on a ‘drive-away deal’ basis, are available on our website. These guidelines apply from 1 July 2025.
Interest rate
The interest rate payable on a tax default will decrease from 12.36% to 11.78%. This is calculated by adding the market rate of 3.78% in 2025–26 (4.36% in 2024–25) and premium rate of 8%.
