Victorian State Budget Summary 2023/2024

Summary of the Victorian State Budget 2023/2024

The Victorian state budget for 2023/2024 introduces significant changes that affect large businesses, small enterprises, and property owners.

Large Businesses 

Firstly, large businesses are set to feel the pinch with a new payroll tax rate. Those with national payrolls above $10 million will face an additional payroll tax rate of 0.5 per cent, escalating to 1 per cent for businesses with payrolls exceeding $100 million. This change, designed to service the COVID Debt Levy, is projected to raise $3.9 billion over the next four years. It’s important to note that this additional levy will impact approximately 5 per cent of Victorian businesses.

Small Businesses 

Conversely, small businesses receive some relief with the increase in the payroll tax-free threshold. The threshold will rise to $900,000 from 1 July 2024, with another increment to $1 million from 1 July 2025. This move is expected to save approximately 26,000 Victorian businesses up to $14,550 per year. The change will exempt an additional 4,200 businesses from payroll tax, while decreasing tax liability for another 22,000 enterprises.

Property Tax

On the property front, land tax is set to undergo substantial reform. The Andrews government will lower the tax-free threshold from $300,000 to $50,000 as of 1 January 2024, which is projected to raise $4.7 billion over four years. Although the family home remains exempt, an additional fixed charge will apply to eligible landholdings. The absentee owner surcharge, applicable to foreign investors, will double from 2 to 4 per cent.

Stamp Duty

Simultaneously, the Victorian government plans to abolish stamp duty on commercial and industrial properties, replacing it with an annual property tax. This transformative approach is expected to inject $50 billion into the state economy.

In line with these changes, the first purchasers of commercial and industrial properties after July 1, 2024, will have the choice to either pay the final stamp duty liability upfront or via fixed instalments over 10 years, facilitated through a government-backed transition loan. Once a property enters this new system, stamp duty will no longer be applicable on future transactions, and the annual property tax will take effect.

Other Changes

Other notable provisions in the budget include free car registration for apprentices who drive for work, potentially saving them up to $865 a year, and a new Victorian Veterans Card offering veterans discounts on vehicle registration, free fishing and boating licenses.

For other changes not related to business please visit — https://www.abc.net.au/news/2023-05-23/victoria-budget-2023-spending-winners-and-losers/102372722

In conclusion, the 2023/2024 Victorian state budget targets significant changes to business and property taxation, aiming to balance support for small businesses and property investors against measures to fund recovery from the COVID-19 pandemic.