The New South Wales Treasurer, Mr Dominic Perrottet, handed down the NSW Budget 2020-21 on 17 November 2020.
It includes the following measures relating to tax.
- · Lowering the payroll tax rate. The payroll tax rate will be reduced from 5.45% to 4.85% in 2020-21 and 2021-22.
- · Increasing the payroll tax threshold. The
payroll tax threshold is being increased from $900,000 to $1.2 million
permanently from 1 July 2020.
As part of its response to COVID-19, the government announced in March 2020 that it would accelerate the increase to the payroll tax threshold to $1 million from 1 July 2021 to 1 July 2020. The government is now taking this further by permanently increasing the threshold to $1.2 million retrospectively from 1 July 2020.
- · Proposed reform for transfer duty. The
government will commence public consultation on tax reforms to reduce the
upfront costs for property buyers. The government's proposed model would:
- - give property buyers the choice between paying stamp duty upfront or opting for the smaller annual property tax
- - enable people who opt-in to the system to also eliminate any land tax liability
- - ensure that the current property owners who are not buying or selling are not affected
- - replace the current stamp duty concessions provided to first home buyers with a new grant of up to $25,000, and
- - include a property tax rate that would support and incentivise home ownership with a lower rate for owner-occupiers and higher rates for investors and commercial properties.
- · Extended land tax COVID-19 relief. The
land tax COVID-19 relief for landowners has been extended to 28 March 2021 in
modified form. To be eligible for relief from 1 January 2021 to 28 March 2021:
- - the lease must be a retail lease
- - the annual turnover of the tenant must be less than $5 million
- - the tenant needs to re-establish eligibility by demonstrating a 30% decline in turnover (15% for non-profits) for the December quarter 2020.
Sources: NSW Budget 2020-21, Budget Statement, 17 November 2020, accessed 17 November 2020.
NSW Government, Historic reform could make Australian home ownership dream a reality, [media release], 17 November 2020, accessed 17 November 2020.
Revenue NSW, NSW State budget 2020-2021, [media release], 17 November 2020, accessed 17 November 2020.
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