2020-21 Victorian State Budget

Moore Australia

7 December 2020

On 24 November 2020, the Victorian Treasurer Tim Pallas handed down the 2020-21 Victoria State Budget. The aim of the Budget is clear: to protect and create jobs, look after families, build strong and connected communities and build towards a strong economic recovery.

The Budget contains some key tax relief measures to assist Victorian businesses and families, including:

New Jobs Tax Credit

To support small and medium businesses rehire staff, restore hours or create new jobs, the New Jobs Tax Credit will provide businesses with annual Australian wages of less than $10 million a non-refundable tax credit of ten cents for every dollar of Victorian wages paid in 2020-21 and 2021-22 above the previous year’s level. Businesses will be able to apply the credit to reduce payroll tax liabilities.

Payroll tax relief

From 1 July 2021 the threshold for annual payroll tax payment is increasing to $100,000 (up from $40,000).

As previously announced, Victorian businesses with payrolls less than $10 million will have the option to defer their payroll tax for 2020-21. Eligible businesses can repay the deferred payroll tax in quarterly instalments over 2021-22 year.

Stamp duty relief

Waivers of up to 50% on land transfer (stamp) duty for newly built or ‘off the plan’ homes valued at up to $1 million for contracts entered into from 25 November until 30 June 2021. Existing homes valued at up to $1 million will be eligible for a 25% waiver. This can be claimed in conjunction with existing concessions, such as the first home buyer duty concession.

A 50% stamp duty concession for commercial and industrial property transactions in regional Victoria applies to contracts entered into from 1 January 2021 (brought forward from 1 July 2023).

Victorian Homebuyer Fund

$500 million will be provided to accelerate Victorians into home ownership through a contribution to the purchase price of a property in exchange for a proportionate equity interest. This will reduce the size of the deposit required by purchasers and applies to both established and newly built homes.

Land tax relief

In order to stimulate construction activity, the Government will provide a 50% land tax discount for eligible build-to-rent developments from 1 January 2022 until 1 January 2040. This will include an exemption from the absentee owner surcharge.

Land owned and occupied by not for profit clubs that provide for social, cultural, recreational, literary or educational interests in their members may be eligible for land tax exemption in the 2021 land tax year.

Research and Development and other support

Small and medium sized businesses already claiming the Research and Development tax incentive, will have access to low interest loans for up to 80% of their forecast refundable tax offset.

Introduction of a new $2 billion Breakthrough Victoria Fund to drive investment in research and innovation in priority industries including medical research, health and life-sciences, agri-food, advanced manufacturing, clean energy and digital technologies.
$20 million will be provided for small business to help build their digital capability in their day-to-day operations as part of the Small Business Digital Adaptation Program.