Last Thursday, Victorian Treasurer Tim Pallas announced the Budget plans for 2021/22. The property sector in particular will be significantly impacted as a result of the announcements made.
The table below outlines the changes announced and proposed start date.
| Tax | Change | Effective on |
| Stamp Duty | Premium stamp duty introduced | |
| Premium stamp duty will be introduced to property
transactions above $2mil – $110,000 of duty plus 6.5% of
dutiable value in excess of $2mil. This percentage is
fixed and not adjusted
annually depending on inflation.
Previously, the highest general rate was 5.5% for transactions with dutiable value in excess of $960,000. |
1 July 2021 | |
| Temporary Concessions | ||
| For contracts entered into 1 July 2021 to 30 June 2022, and do not qualify for a Tax Exemption, the Victorian Government will extend the 50% stamp duty discount on new residential properties in the City of Melbourne Local Government area. | 1 July 2021 to 30 June 2022 | |
| For contracts entered into from 1 July 2021 and ending 30 June 2023, there will be an increase in the eligibility threshold for the off-the-plan duty concession to $1 million for all home buyers. | 1 July 2021 and ending 30 June 2023 | |
| Temporary Exemptions | ||
| For contracts entered into 21 May 2021 and ending on 30 June 2022, a full exemption on stamp duty for new residential properties worth up to $1million and have remained unsold for 12 months or more since completion of construction i.e. the stamp duty is waived. | 21 May 2021 to 30 June 2022 | |
| Waiver | ||
| The 25% Stamp Duty waiver will cease for existing or vacant residential land | 1 July 2021 | |
| Land Tax | Increased percentage | |
| · 0.25 per cent for taxable landholdings
exceeding $1.8 mil and no more than $3 mil; AND
· 0.30 per cent for taxable land holdings in excess of $3mil. |
2022 land tax year | |
| Concessions | ||
| Will not apply to private gender exclusive clubs | 2022 land tax years | |
| Threshold | ||
| For contracts entered into from 1 July 2021 to 30 June 2023 the land tax threshold will increase from $250,000 to $300,000. The Land Tax Threshold for land held on trust still is $25,000. | 1 July 2022 to 30 June 2023 | |
| Vacant Land tax | ||
| Exemption for new developments are temporarily extended for up to two tax years. | 2022 land tax year | |
| New tax: Windfall Gains Tax | · introduced for properties where value has
boosted by a council rezoning.
· Will only apply where the property's value is boosted by more than $100,000 with a 50% tax on windfalls above $500,000. · Victorian Government expects to raise $2.7 billion from the suite of measures. · Victorian Government expects a $124 million increase over four years. · Not part of Budget Bill but will be in a separate legislation. |
1 July 2022 |
The penalty unit has also increased by 10%, making the new unit $181.74 per unit. This change will take effect on 1 July 2021.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
