The Victorian State Budget was delivered on Tuesday, 24 November 2020 by Treasurer Tim Pallas. It was billed as the “borrow in order to rebuild” budget, and it lives up to this promise with a total projected net debt amount of $155 billion expected to be reached by 2024 based on current spending and projections.
With unemployment tipped to remain in the 6% to 7% range for the next few years – a far cry from the 4.6% unemployment enjoyed in 2018-19 – the Andrews Government focus has been on the creation of new jobs, large infrastructure projects, construction and incentives for reskilling and apprenticeships.
Many of this year’s budget announcements incorporate previously announced funding and concessions aimed at supporting businesses through the COVID-19 pandemic. Below is a summary of some of the key highlights:
- Continued commitment to payroll tax payment deferral for businesses with payroll costs of up to $10 million for the 2020/2021 financial year, extending deferral payment dates by 12 months (previously 9 months)
- Increasing the annual payroll tax reporting threshold from $40,000 to $100,000 – expected start date 1 July 2021.
Stamp duty waiver
- Stamp duty reductions on residential properties worth up to $1 million for contracts entered into on or after 25 November 2020 and before 1 July 2021.
- 50% stamp duty waiver for newly built properties
- 25% stamp duty waiver for existing residential properties.
Land tax discount
- For builders and developers, a 50% land tax discount will be available for new ‘build-to-rent’ developments until 1 January 2040 – expected start date 2022 land tax year. This concession will also extend to an exemption for the current 2% Absentee Owner Surcharge over the same period.
New job tax credits
- Small and medium sized businesses to receive a payroll tax credit of 10 cents for every dollar of Victorian taxable wages above the previous year’s, to encourage the re-employment of staff, restore hours and hire new staff. This scheme will run for two years, reducing the payroll tax paid by businesses expanding their workforce capacity.
Regional and rural Victoria
- A 50% stamp duty concession will apply for any commercial or industrial property purchased in regional Victoria for contracts entered into from 1 January 2021.
- The $20,000 First Home Owner Grant for buying or building a new home in regional Victoria has been extended on contracts of sale up until 30 June 2021.
Victorian homebuyer fund
- The Fund will contribute to the purchase price of established and newly built homes in exchange for a proportionate equity interest in the property, reducing the size of the deposit required by homebuyers (subject to eligibility criteria).
Secure work pilot scheme (sick pay for insecure workers)
- A two-year pilot program which will provide up to five days of sick and carers pay at the national minimum wage for casual or insecure workers in priority industries.
If you wish to discuss the ideas raised in this article, please contact your Bentleys advisor, or contact us via the general enquiry form.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.