Over the last few months, Australian State Treasurers have announced their state budgets for 2017-18. Accru has complied a useful summary of the key changes announced for duties and taxes for each state budget. See the snapshot of the budget announcements for all states below.
Land Transfer Duty
Land transfer duty (commonly known as stamp duty) to be abolished for first-home buyers purchasing a property up to $600,000, and a duty concession for first-home purchases valued from $600,001 to $750,000.
Property transfers between spouses and de facto partners involving commercial and/or investment properties to no longer be exempt from land transfer duty. Exemption for the principal place of residence and for transfers following a relationship breakdown will remain in place.
These changes apply to contracts entered into from 1 July 2017.
Motor Vehicle Duty
From 1 July 2017, new passenger vehicles will be subject to the same motor vehicle duty rates as used passenger vehicles.
First Home Owner Grant
$20,000 First Home Owner Grant to be available for homes built in regional Victoria up to $750,000. Applies to contracts entered into from 1 July 2017 to 30 June 2020.
‘Off the plan’ Duty
Concessions for off the plan purchases will apply only to buyers eligible for the principal place of residence or first home buyer duty exemption/concession. This means that the concession is no longer available for OTP purchases of holiday homes, and investment or commercial properties. This applies to contracts entered into from 1 July 2017.
From 1 January 2019, property valuations will occur annually, rather than every two years.
Crop and Livestock Insurance
From 1 July 2017, an exemption from insurance duty will apply to crops, livestock and agricultural machinery.
VACANT RESIDENTIAL LAND TAX
From 1 January 2018, a tax will be applied on residential properties in the inner and middle suburbs of Melbourne which are unoccupied for more than six months a year. It will be based on use and occupation in the preceding year.
Payroll tax threshold changes will be brought forward by one year to reach $625,000 for 2017-18, and increase to $650,000 in 2018-19.
Rate of tax
Payroll tax rate paid by regional Victorian businesses to be reduced by 25 per cent, down to 3.65 per cent, where at least 85 per cent of their payroll goes to regional employees. This applies from 1 July 2017.
Land Tax Surcharge
A 1.5% surcharge for absentee payers of land tax (those who do not ordinarily reside in Australia) will be applied to land holdings of $350,000 or higher, in addition to other land tax payable from 1 July 2017.
Payroll Tax Rebate
The payroll tax rebate on the wages of apprentices and trainees will continue at the increased rate of 50% until 30 June 2018. This rebate is in addition to their wages being exempt and will be used as an offset against payroll tax payable on the wages of other employees.
First Home Owner Grant
The First Home Owners’ Grant temporary increase, from $15,000 to $20,000 for contracts on newly constructed homes, will be extended to eligible transactions entered into between 1 July 2017 and 31 December 2017.
“Off-the-plan” Stamp Duty Concession
The off-the-plan stamp duty concession on a transfer of a new apartment or substantially refurbished apartment will be extended until 30 June 2018 but will no longer apply to foreign purchasers. This change relates to off-the-plan contracts entered into on or after 22 June 2017.
“Off-the-plan” Purchaser Grant
A $10,000 grant will be provided to eligible off-the-plan apartment purchasers where the contract is entered into between 22 June 2017 and 30 September 2017.
Stamp Duty Surcharge
Foreign purchasers that acquire residential property in South Australia will be required to pay a surcharge of 4% of the dutiable value of the property. This surcharge amount is in addition to the duty that is otherwise payable.
Land Tax Exemption
Apartments that are purchased off-the-plan will be exempt from any land tax that may be payable on the apartment for the first five financial years after purchase, where the contract is entered into between 22 June 2017 and 30 June 2018. The exemption will no longer apply if the apartment is sold before the end of the five year exemption period.
Rate of Tax
The payroll tax rate for businesses with Australian taxable payrolls between $600,000 and $1 million will be lowered from the current rate of 4.95% to 2.50%. The payroll tax rate will then phase up to the rate of 4.95% for businesses with payrolls above $1.5 million.
First Home Owner Grant
The First Home Owners’ Grant of $20,000 has been extended for one year, from 1 July 2017 to 30 June 2018.
Duty on House and Land Packages
Consideration for a dutiable transfer of land will no longer be taken to include improvements agreed to be made to the land that are performed after the land transfer. Further, for standard single-dwelling house and land packages, the consideration for the land transfer will also exclude improvements that are performed on the property after the agreement is entered into, but before the transfer of land occurs.
This is effective 1 July 2017.
Payroll Tax Rebate
Effective from 1 July 2017, there will be a rebate for employers that pay payroll tax and employ eligible apprentices, trainees and youth employees between 1 July 2017 and 30 June 2019. The maximum rebate payable will be the payroll tax levied for wages paid to eligible employees, or the total payroll tax paid, whichever is less.
NSW STATE BUDGET
Key changes to duties and land tax were announced in the areas below.
- First Home Buyers Assistance
- Shared Equity Scheme for property purchases
- New Home Grant Scheme
- First Home Owner Grant (New Homes)
- Purchases ‘off the plan’ by investors
- Land tax on Principal place of residence
- Surcharge purchaser duty for foreigners, permanent residents and Australian-based developers and commercial residential property.
- Surcharge land tax for foreigners, permanent residents and Australian-based developers and commercial residential property.
- Lenders Mortgage Insurance duty
- Crop and Livestock Insurance
- Small business exemption.
See our article with further details on the NSW budget.
If you would like to know how these developments affect you, please contact your local Accru advisor.