The Victorian government yesterday released its State Budget for 2023/2024. The Budget includes several important new tax measures.

Stamp duty on commercial and industrial properties replaced with an annual property tax

The Andrews Government proposes to abolish transfer duty (stamp duty) on commercial and industrial properties, which will be replaced with an annual property tax. If this measure is passed, with effect from 1 July 2024, commercial and industrial properties will transition to the new system as they are sold. An annual property tax is “to be payable from 10 years after the transaction”.

The annual property tax will be 1% of the property’s unimproved land value.

Absentee owner surcharge increase

The absentee owner surcharge rate will increase from 2% to 4% and the minimum threshold for non-trust absentee owners will decrease from AU$300,000 to AU$50,000.

Temporary payroll tax surcharge for large businesses

A temporary payroll tax surcharge of 0.5% will apply on wages paid in Victoria by businesses with national payrolls over AU$10 million a year. Businesses with national payrolls above AU$100 million will pay an additional 0.5%.

The surcharge will apply for 10 years from 1 July 2023 until 30 June 2033.

Temporary land tax surcharge

A new temporary land tax surcharge will apply in addition to existing land tax from the 2024 land tax year for ten years. Exempt properties (eg, family home) will be exempt from this surcharge.