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Important Changes In Land Tax In Victoria For 2024

To ensure the smooth functioning of a country, the government makes necessary changes in the laws. Similarly, Victoria is undergoing some significant changes in land taxation. The changes in land taxation will affect both the buyers and the sellers. Consult a finance broker in Brisbane to guide you with these tax changes and ensure legal compliance. You must be aware of the changes in the tax, what surcharge is and its types included in the tax, and exceptions as per individual circumstances. It will help you better understand the intricacies of the tax and will help you in the acquisition as well as sales of properties. 

Stamp Duty Transition For Commercial And Industrial Property

In the new regime, properties acquired before 1 July 2024 will not be affected. However, this new regime is applicable to those who acquired industrial and commercial properties on or after 1 July 2024. If you want to buy or sell commercial and industrial properties, consult business finance brokers in Brisbane

Besides this, the first purchaser of these properties on or after 1 July 2024 will be given options to choose to pay the final stamp duty of the property upfront or to use a ‘transition loan’ (which is government facilitated). In the transition loan, the purchaser will have to pay stamp duty in fixed instalments along with interest for a period of 10 years.

Increase In Land Tax Surcharge Of Absentee Owners

The government has doubled the tax rate on properties owned by absentee owners. The absentee owner surcharge land tax rate is increased from 2% to 4% by the government. This change is aimed to harmonise with the foreign owner land tax surcharge of New South Wales. It is also implemented to ensure that property investors overseas contribute to the infrastructure in Victoria and towards the provision of government services. Consult a finance broker in Brisbane to effectively guide you through the tax intricacies. 

Australian entities owned directly or indirectly by foreign investors can be included as absentee owners. In Victoria, the foreign owner surcharge is not just limited to residential land. It applies to industrial and commercial lands as well. 

Exceptions Include

Although the land tax covers multiple properties, there are certain exceptions for some properties. The properties that can enjoy exemption from land tax include primary production land, boarding houses, community housing, properties on crown land, and charities. These properties are exempted from tax to acknowledge the nature and usage of land ownership and provide incentives to those who do not seek personal profits. Consult a business finance broker in Brisbane to understand whether you are eligible for exceptions. 

Changes Related To Vendor Responsibilities

The vendors shifted the responsibilities of the outstanding land tax to the buyers. However, as per recent amendments, the vendor can no longer do this. They are required to pay all the outstanding land tax liabilities before the settlement. If a vendor fails to do so, they will face the risk of paying a hefty penalty for non-compliance of up to $60,000. This step has been taken to streamline the settlement process and reduce the burden on the buyer during the transfer of ownership. 
These significant changes in the Victorian Land Taxation 2024 are crucial for vendors and buyers to understand. Consulting a finance broker in Brisbane will help you understand these changes and whether they will affect you. The changes are made to streamline settlements and processes involved in acquiring and selling residential, commercial and industrial land. Thus, consulting an expert will help you understand and comply with these government changes.

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