Victorian Budget 2021-22
On 20 May 2021, the Victorian Government handed down the 2021-22 Budget. The principal revenue measures in the Budget were:
Payroll tax
Bringing forward the increase in the payroll tax-free threshold to $700 000 from 1 July 2021 (instead of from 1 July 2022);
Brining forward the reduction in the regional employer payroll tax rate from 2.02% to 1.2125% from 1 July 2021 (instead of from 1 July 2022);
Introducing a 0.5% surcharge (the Mental Health and Wellbeing Levy) on wages paid in Victoria by businesses with national payrolls over $10m a year from 1 January 2022 (businesses with national payrolls above $100m will pay an additional 0.5%) - this is intended to secure long-term funding for mental health reform.
Stamp duty
Introducing a new premium land transfer duty (stamp duty) rate for property transactions with a value above $2 million, increasing stamp duty payable to $110,000 plus 6.5% of the dutiable value in excess of $2 million;
Introducing a concession of up to 100% of stamp duty for new dwellings worth up to $1m in the Melbourne local government area when the property has been unsold for 12 months or more since completion, for contracts entered into from 21 May 2021 to 30 June 2022. A 50% land transfer duty concession will apply for new residential properties (with a dutiable value of up to $1m) not eligible for the 100% concession, for contracts entered into between 1 July 2021 to 30 June 2022;
Temporarily increasing the eligibility threshold for the off-the-plan concession for land transfer duty to $1m, for contracts entered into from 1 July 2021 to 3 June 2023.
Land tax
Increasing the rate of land tax by 0.25%, from 1.3% to 1.55%, for properties with taxable landholdings between $1.8m and $3m;
Increasing the rate of land tax by 0.30%, from 2.25% to 2.55%, for properties with taxable landholdings over $3m;
Extending the vacant residential land tax exemption for new developments;
Raising the general land tax-free threshold from $250,000 to $300,000 (the land tax threshold for land held on trust remains unchanged at $25,000);
Introducing from 1 July 2022, a new windfall gains tax of up to 50% to be applied to planning decisions to rezone land from 1 July 2022. The total value uplift from a rezoning decision will be taxed at 50% for windfalls above $500,000, with the tax phasing in from $100,000.
Other taxes
Increasing the wagering and betting tax from 8% to 10% from 1 July 2021;
Extending the point of consumption framework to keno tax from 15 April 2022;
Increasing heavy vehicle charges by 2.5% from July 2021.
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