Property taxes jump in Victoria's 2023-24 Budget

Victoria's 2023-24 budget tackles the state's mounting debt caused by COVID-19, resulting in winners and losers. Big businesses and landlords bear the burden of repaying the debt, while small businesses and certain sectors receive support. Let's explore the key aspects of the budget that impact the property sector and big business taxes.

Winners:

Small Businesses:

·       The payroll tax-free threshold will increase from $700,000 to $900,000, benefiting 4,200 businesses exempt from payroll tax and reducing taxes for another 22,000 businesses, saving up to $9,700 annually per business.

·       Kindergarten becomes free for all three and four-year-old children, ensuring accessible early education.

·       Apprentices who drive for work will have free car registration, saving up to $865 per year.

·       Significant investments in mental health services, workplace mental health improvements, and women's health, including laparoscopies and new health clinics, provide support and resources.

·       Veterans receive benefits such as discounts on vehicle registration, free fishing licenses, and free boating licenses through the Victorian Veterans Card.

Losers:

Big Businesses and Landlords:

·       The land tax threshold decreases from $300,000 to $50,000, affecting approximately 860,000 investment property owners, leading to reduced supply and even more pressure on a strained rental market.

·       Businesses with payrolls exceeding $10 million face additional payroll tax through the COVID Debt Levy.

·       Support for everyday Victorians is reduced compared to the previous year, with no announcement of the fifth $250 power bonus payment.

·       To save $2.1 billion, the government plans to cut 3,000 to 4,000 public servant roles over the next four years.

·       High-fee non-government schools experience a reduction in payroll tax exemption to ensure support is directed to schools with genuine financial needs.

·       Challenges in market capacity and material supply result in delays and a $391 million increase in major projects with a 15% timeline variance. The Airport Rail Link and other road upgrades will be paused due to funding limitations.

Victoria's 2023-24 budget tries to address the state's financial challenges, with the property sector and big businesses shouldering a significant portion of the burden through increased taxes. 

While support is provided to small businesses and certain sectors, the impact on the property market and big businesses does not bode well for Victoria's overall economic landscape.