2024 NSW State Budget Update

The centre-piece of the budget is the Building Homes for NSW program which will deliver 30,000 new homes. The government will also deliver 8,400 social homes including priority homes for victim-survivors of domestic and family violence. A further 33,500 existing social homes will be repaired.

Looking at tax matters in particular, Bentleys NSW Tax Director Darren Lee provides an overview of the new measures introduced.

Summary of tax measures

The 2024 NSW State budget includes four new tax related measures:

• Removal of indexation on land tax thresholds
• Increase in surcharge land tax on residential land owned by foreign person
• Increase in foreign purchaser surcharge duty
• Bulk billing payroll tax exemption for medical practices

Removal of indexation on land tax thresholds

From the 2025 land tax year, administrative indexation arrangements will be aligned with most other jurisdictions by fixing the land tax thresholds at their 2024 land tax year values. These are $1,075,000 for the tax-free threshold and $6,571,000 for the premium rate threshold.

Given the impact of increasing property valuations over the past few years, the budget expects to raise $1.5 billion from this measure over a four year projection up to 2028.

Increase in surcharge land tax on residential land owned by foreign person

For all residential land owned by a foreign person at midnight on 31 December in any year, commencing with 2024, the surcharge land tax will increase from 4% to 5%. The first assessment will be received in early 2025.

Increase in foreign purchaser surcharge duty

The foreign purchaser surcharge duty will increase from 8% to 9% from 1 January 2025.

Bulk billing payroll tax exemption

There was a 12-month pause from 4 September 2023 on payroll tax audits on medical practices who engage general practitioners. During the pause, interest or penalty tax have not been applied to unpaid payroll tax.

The NSW government has announced a permanent concession for Medical centres that bulk bill as follows:

• For unpaid payroll liabilities prior to 4 September 2024, an exemption from payroll tax.
• From 4 September 2024, a rebate for payroll tax on wages on contractor GPs if a medical centre meets certain bulk billing thresholds:
  • At least 80% of services if located in metropolitan Sydney
  • At least 70% of services if located elsewhere

This is to encourage bulk billing of patients and to protect bulk billed patients.

Many medical practices have already considered the impact of the payroll tax decisions to their practices and have sought advice on how to best structure their practices going forward. Please let us know if you would like to discuss the impacts on your medical practice.

Please contact your Bentleys advisor for more details on how the Budget will affect your business. For more information you can also access the Revenue NSW information at revenue.nsw.gov.au/help-centre/resources-library/budget/2024-state-budget

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We are here to partner with you to navigate the challenges the next 12 months presents. Please contact your advisor to discuss your situation 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.