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State Tax COVID-19 updates

17 December 2020

The States and Territories of Australia have announced their own stimulus packages to support businesses, with most offering some form of relief in relation to payroll tax, rent relief for commercial tenants land tax deferrals, land tax rebates and waiving or refunds of rates and licencing fees. Key measures are highlighted below.

Payroll tax measures

State Eligibility Details
QLD Businesses with grouped Australian wages of AUD6.5m or less

For the 2019-20 year, a refund of payroll tax for 2 months is available in addition to a 3 month payroll tax holiday. For the 2020-21 year, a two-month waiver of payroll tax for July and August 2020 applies.

Businesses can also apply for a deferral of paying payroll tax for the 2020 calendar year allowing businesses to pay off any deferred liabilities over the course of 2021.

Businesses with grouped Australian wages of more than AUD6.5m Businesses can apply for a deferral of payroll tax for the 2020 calendar year allowing businesses to pay off any deferred liabilities over the course of 2021 and a refund of payroll tax for 2 months for the 2019-20 year.
NSW Businesses with grouped Australian wages of up to AUD10m

A 25 per cent reduction in their annual payroll tax liability for the 2019-20 year.

 

All employers

A deferral of payroll tax is available for any outstanding liability for the 2019-20 financial year and the monthly payments for the July, August and September periods until 30 October 2020. There is an option of paying the outstanding liability in full or entering into an instalment plan after October 2020. 

Temporary reduction of the payroll tax rate on taxable wages from 5.45 per cent to 4.85 per cent from 1 July 2020 to 30 June 2022.

The payroll tax threshold increased from AUD900,000 to AUD1.2 million for the financial years commencing on and after 1 July 2020.

Introduction of “Jobs Plus Program” including payroll tax relief, up to four years, for every new job created where a business has created at least 30 new net full time equivalent jobs. The Jobs Plus Program will commence 15 December 2020 and conclude on 30 June 2022.

WA Businesses with grouped  Australian annual wages between AUD1m - AUD4m One-off grant of AUD17,500 has been provided to businesses paying payroll tax, with a payroll between AUD1m and AUD4m.
All employers

The payroll tax threshold increased to AUD1m from 1 July 2020, being six months earlier than the originally planned date.

Businesses impacted by COVID-19 can apply for an interest-free payment arrangement and for late payment penalties to be waived for payroll tax.

Businesses with grouped Australian annual wages of up to AUD7.5m

Payroll tax waived for a four-month period between 1 March 2020 to 30 June 2020.

TAS Hospitality, tourism and seafood sectors
Payroll tax for the entire financial year of 2019-20 waived for businesses in the hospitality, tourism and seafood sectors.
Businesses with grouped Australian annual wages of up to AUD5m Affected businesses in other sectors can apply for a waiver of payroll tax for the entire financial year of 2019-20.
Youth employment A youth employment payroll tax rebate scheme is available from 1 April 2020 to 30 June 2022 to encourage youth employment.
Apprentices and trainees An existing payroll tax rebate scheme for apprentices and trainees in building, construction, tourism, hospitality and manufacturing industries is extended until 30 June 2022 and expanded to apprentices and trainees in all industries from 1 January 2021 to 30 June 2022.
VIC Businesses with Victorian annual wages up to AUD3m

Full payroll tax refunds for the 2019-20 financial year.

Deferral of payroll tax for the 2020-21 financial year until the 2021-22 financial year (see below).

Businesses with payrolls up to AUD10m

Deferral of payroll tax for the 2020-21 financial year until the 2021-22 financial year. Under this deferral, 2020-21 payroll tax liabilities can be paid in four quarterly instalments in the 2021-22 financial year.

A non-refundable payroll tax credit of 10 cents for every dollar of Victorian wages paid in 2020-21 and 2021-22 above the previous year’s wages.

ACT Businesses whose operations are directly impacted by the prohibited activities list due to COVID-19
Six-month waiver on payroll tax from April to 30 September 2020.
Businesses unable to trade or operating on a very limited basis May be eligible for an additional payroll tax waiver for October to December 2020.
Businesses in the construction industry Interest-free deferral of payroll tax liability for nine months from April to December 2020.
Businesses with grouped Australian annual wages of up to AUD10m Interest-free deferrals of payroll tax for the 2020-21 year until 1 July 2022.
All business who pay wages for new apprentices or trainees Wages paid to apprentices or trainees employed after 1 August 2020 are exempt from payroll tax for the period from the start of the employment until 31 January 2021.
SA Businesses with Australian grouped annual wages up to AUD4m A 15-month waiver of payroll tax due over the period April 2020 to June 2021.
Business that are eligible for the extended JobKeeper payment from 4 January 2021 A six-month waiver of payroll tax due over the period January 2021 to June 2021.

Businesses with Australian grouped annual wages of AUD4m or more

Businesses that are significantly impacted by COVID-19 can apply to defer payroll tax for the period April 2020 to December 2020 until 14 January 2021.
All business who pay wages for new apprentices or trainees A 12-month payroll tax exemption for wages paid to eligible new apprentices and trainees who commence a relevant contract of training with an employer from 10 November 2020 to 30 June 2021.
NT Businesses with an annual turnover of up to AUD50 million with total payroll up to AUD7.5m where turnover has been reduced by at least 30 per cent due to COVID-19 when compared to the same month or quarter in 2019 (must also be registered and included on the Central Hardship Register)

A payroll tax waiver will apply for impacted businesses for the March 2020 to June 2021 return periods.

Businesses with an annual turnover of up to AUD50 million with total payroll above AUD7.5m where turnover has been reduced by at least 50 per cent due to COVID-19 when compared to the same month or quarter in 2019 (must also be registered and included on the Central Hardship Register) A payroll tax deferral will apply for impacted businesses for returns for March 2020 through to June 2021 until 21 July 2021, provided returns continue to be lodged by the due date.
Businesses that hire new employees resident in the Northern Territory

Existing payroll tax exemption for hiring resident employees extended for one year to 30 June 2021. Under this scheme, an employer may be eligible for a payroll tax exemption in relation to wages paid to any of the following:

  • a Territory resident who, when hired, increases the total number of Territory residents employed in the business

  • an existing employee of the business, who relocates from living interstate or overseas to reside in the Territory as their principal place of residence

  • a Territory resident hired to replace a former employee who resided interstate or overseas.

States and Territories may also provide a payroll tax exemption for wages subsidised by the JobKeeper program (refer to our dedicated JobKeeper page for more information on the program). 

Stamp duty measures

Western Australia has an interest-free payment arrangement and may waive late payment penalties on transfer duty, landholder duty, and vehicle licence duty.

New South Wales has enacted changes to the stamp duty thresholds for first home buyers to support new home construction and job creation. Under the changes, the stamp duty threshold on acquisitions of vacant land will rise from $350,000 to $400,000 phasing out at $500,000. The stamp duty threshold on new homes will increase from $650,000 to $800,000, with the concession reducing on higher values before phasing out at $1,000,000. The changes apply only to acquisitions of newly-built homes and vacant land, not existing homes. The changes commence on 1 August 2020 and will last for 12 months.

The New South Wales Government has also enacted an exemption from foreign investor stamp duty surcharge until 2040 for land acquired and held by an Australian corporation constructing a build-to-rent development. To qualify, construction must be carried out by the corporation or a related body corporate, and construction must occur after the land has been transferred to the Australian corporation. As a result, it is expected in many instances that surcharge duty will already have been paid on the acquisition of the land. This means the exemption will generally be obtained by way of application for refund of the duty made within 12 months after the owner of the land first became entitled to a refund, and no later than 10 years after completion of the transfer of the residential-related property to the Australian corporation. Entities may be approved as “exempt” prior to the acquisition of residential-related property in certain circumstances.

The Victorian Government has also introduced a 50 per cent stamp duty discount will apply to contracts entered into on or after 1 January 2021 to buy commercial or industrial property in regional Victoria. Currently, a 20 per cent transfer duty concession (proposed to increase by 10 per cent each financial year up to 50 per cent from 1 July 2023) is available for acquisitions of property in regional Victoria used for commercial, industrial or extractive industry purposes. The maximum 50 per cent discount rate is now brought forward to 1 January 2021, such that the effective stamp duty rate for properties of this type will be 2.75 per cent. This is available to all purchasers (local or foreign), and there is no limit as to the use of the concession. Note the 50 per cent concession is already available to alpine resorts and certain bushfire affected areas.

The Victorian Government also announced, as part of the Big Housing Build package, a waiver of 50 per cent of stamp duty for new residential properties and 25 per cent for existing residential properties on real property purchases in Victoria with a dutiable value of up to AUD1 million. This waiver applies to contracts entered into between 25 November 2020 and 30 June 2021.

The ACT Government is offering the following stamp duty concessions in the ACT for some home buyers planning to live in their new property for purchase contracts exchanged between 4 June 2020 and 30 June 2021:

  • No stamp duty on single residential dwelling blocks.
  • No stamp duty on off-the-plan unit (unit-titled apartment and townhouses) purchases up to AUD500,000.
  • An AUD11,400 stamp duty reduction for off-the-plan unit (unit-titled apartment and townhouses purchases between AUD500,000 and AUD750,000.

Land tax measures

 

State Eligibility Details
QLD All landowners for land tax purposes

3 month deferral of issue of land tax notices for the 2020-21 assessment year.

All foreign entity landowners for land tax purposes Waiver of the 2 per cent foreign land tax surcharge for foreign entities for the 2019-20 assessment year. Note there is no waiver of the 2 per cent absentee surcharge which applies to individuals. 

Eligible landowners that lease property in compliance with the leasing principles and provide rent relief to tenants financially impacted by COVID-19 

OR

Eligible landowners that own property available for lease and comply with the leasing principles, whose ability to secure tenants has been affected by the COVID-19 pandemic and require relief to meet their financial obligations

A 25 per cent land tax rebate for the 2019-20 or 2020-21 assessment year is available for landowners in respect of their properties that meet the eligibility criteria.

If eligible, it is expected that the rebate will firstly be applied to provide rent relief to tenants, with any remaining amount then able to be applied to the landowner’s own financial obligations. 

The rebate will only apply to each property that meets the eligibility requirements and conditions, rather than applying to the entire taxable land holdings of the landowner. In circumstances where there are multiple tenants for a single property (i.e. apartment buildings), including mixed-use developments, where the eligibility requirements are met for at least one tenancy, then the whole property is eligible for the land tax rebate. 

Applications for the 2019-20 land tax year are now closed.

Applications for the 2020-21 land tax year can be made up to 26 February 2021 through the QLD Office of State Revenue Online portal.

VIC

Land owners for land tax purposes that have at least one non-residential property (e.g. commercial, industrial, vacant land that is not residential vacant land) and total taxable landholdings < AUD1m

The land tax payment for 2020 (i.e. in relation to land owned as at 31 December 2019) is deferred until 31 March 2021.

To the extent that land tax for 2020 has already been paid, a refund of the tax paid may be requested. The land tax will however be required to be paid in full by 31 March 2021.

Residential and commercial landlords who provide tenants impacted by COVID-19 with ‘rent relief’.

Commercial landholders only eligible where they cannot secure a tenant due to COVID-19 or the property is rented to a tenant with an annual turnover in either the 2018-19 or 2019-20 financial year of up to AUD50 million and is an eligible recipient of the JobKeeper Payment, or the tenant operates a licensed pub, club or restaurant with annual turnover of no greater than AUD50 million in either the 2018-19 or 2019-20 financial year and its turnover has reduced by at least 30 per cent since March 2020.

 

 

A 50 per cent land tax reduction on 2020 land tax is available, and landlords can also defer this land tax (or its remainder) to 31 March 2021.

Relief also available to residential landowners who are unable to secure a tenant because of COVID-19.  

"Rent relief" requires that residential and commercial landlords provide at least a 50 per cent rent waiver or reduction to their tenants.

Landlords of residential properties who provide tenants impacted by COVID-19 with rent relief in 2021 may be eligible for a 25 per cent reduction on the property’s 2021 land tax (exclusive of any absentee owner surcharge). Eligible landlords can also defer the remainder of their 2021 land tax assessment until, or before, 30 November 2021, and will also have the option of deferring the remainder of their 2020 land tax until that time.

Eligible landlords will be able to apply for the land tax reduction through My Land Tax. If an application has been made for the 25 per cent relief and further relief is sought, a new application must be made. 

Owner-occupiers of commercial property

Owner-occupiers of commercial property can obtain a 25 per cent waiver of the property’s 2020 land tax and payment of the remaining tax can be deferred to 31 March 2021 if the business:

  • has annual aggregated turnover of no greater than AUD50 million in either the 2018-19 or 2019-20 financial year and is an eligible recipient of the JobKeeper scheme, or 
  • is a licensed pub, club or restaurant under a general, full club or on-premises liquor licence where the annual turnover of the business at the premises is no greater than AUD50 million in either the 2018-19 or 2019-20 financial year and the turnover at that premises has reduced by at least 30 per cent since March 2020.

Eligible property owners will be able to apply for the land tax reduction through My Land Tax.

Owners of residential land in inner and middle Melbourne that were vacant for more than six months in 2020

Waiver of vacant residential land tax for the 2021 land tax year.

NSW

Eligible residential and commercial landlords who provide tenants impacted by COVID-19 with “rent relief”.

Commercial tenants must have annual turnover of up to AUD50 million.

Both residential and commercial tenants must be able to demonstrate “financial distress” resulting from COVID-19

 

Up to 50 per cent reduction of 2020 land tax payable on a parcel of land in the 2020 land tax year and a three month deferral for outstanding land tax payments where a rebate or waiver has been received.

The land tax reduction is available over two periods, where “rent relief” is provided to a tenant during the period 1 April 2020 to 30 September 2020 (period 1) or 1 October 2020 to 31 December 2020 (period 2).

The reduction of land tax for each period will be the lesser of:

  • the amount of rent relief provided to a tenant for that period,
  • 25 per cent of the land tax attributable to the parcel of land leased to that tenant.

Financial distress is considered to be:

  • Commercial tenants - a reduction in turnover compared to a previous comparable period of 30 per cent or more due to COVID-19 

  • Residential tenants - a reduction in household income of 25 per cent or more due to COVID-19 

Any rent relief provided to a tenant must not be required to be paid back at a later date.

Applications can be made through the Service NSW portal.

All land owners for land tax purposes

The land tax payment date for 2020 land tax liabilities may be able to be extended and instalment payment arrangements may be entered into.  Applications can be made through the RevenueNSW Online portal.

Australian corporations constructing build-to-rent developments after 1 July 2020
 

A 50 per cent discount on land tax for up to 15 years to developers who invest in build-to-rent schemes. To qualify, construction must have started on or after 1 July 2020 and the development must be held undivided for 15 years. A formal application must be made and additional conditions to be set out iin Guidelines (yet to be released) must be satisfied.

An exemption from foreign investor land tax surcharge until 2040 for land held by an Australian corporation constructing a build-to-rent development. To qualify, construction must be carried out by the entity or a related entity and other conditions must be satisfied. Application is by way of refund of surcharge land tax paid made within 12 months of entitlement to the refund, but not later than 10 years after the land tax year concerned.

TAS

Commercial property land owners who can demonstrate that they were adversely financially impacted by COVID-19

Land tax for 2020-21 on commercial property owners financially impacted by the COVID-19 response will be waived.

‘Commercial property’ refers to property classified as such for government valuation purposes. Applications must be received by 30 June 2021.

 

All land owners for land tax purposes

The Commissioner will consider deferring outstanding land tax until 30 June 2020 or other payment arrangements for those experiencing financial hardship. This may include the waiving of interest on any unpaid 2019-20 debt. Applications can be made through completion of a pre-filled email via the TAS Online portal.

SA

Entities with SA 2019-20 land tax liabilities

Individuals and businesses paying land tax quarterly in 2019-20 are able to defer payments of their 3rd and 4th quarter instalments for six months.

Commercial and residential landlords that provide rent relief to tenants impacted by COVID-19 and those able to demonstrate they are unable to secure a tenant due to COVID-19.

Commercial tenants must have annual turnover of up to AUD50 million and at least one tenant must be eligible for JobKeeper Payment.

Both residential and commercial tenants must be able to demonstrate they have been financially impacted by COVID-19.

Landlords providing eligible rent relief or unable to secure a tenant due to COVID-19 from 30 March 2020 to 30 April 2021 can receive up to 50 per cent reduction of the land tax payable on a parcel of land in the 2019-20 land tax year.

The land tax reduction is available over two periods - 30 March 2020 to 30 October 2020 (period 1) or 31 October 2020 to 30 April 2021 (period 2). A land tax reduction equal to the lesser of the rent relief provided and 25% of the 2019-20 land tax payable on that property is available in each period, with a maximum total reduction of up to 50% of the 2019-20 land tax payable on that property.

Financially impacted is considered to be:

  • Commercial tenants - eligible for JobKeeper Payment
  • Residential tenants - demonstrated financial hardship due to COVID-19 (for example, lost job, reduced working hours or on JobKeeper)

Landlords who have already fully paid their 2019-20 land tax liability and are eligible for relief under this scheme will be issued a refund equal to the value of eligible land tax relief.

Applications for relief can be made online until 30 April 2021.

Commercial owner occupiers with annual turnover of up to AUD50 million and eligible for JobKeeper Payment from 31 October 2020 Commercial owner-occupiers are eligible to receive a 25 per cent reduction on their 2019-20 land tax liabilities. Applications for relief can be made online until 30 April 2021.
WA Taxpayers that can demonstrate COVID-19 has directly or indirectly affected their financial circumstances

From 23 March 2020, the WA Office of State Revenue is remitting late payment penalties in full for taxpayers in certain circumstances.

Extension of time for paying tax and tax instalment arrangements can be made on application.  From 23 March 2020 new payment arrangements will be interest free. Also applies to transfer duty, landholder duty, land tax and payroll tax.  Application can be made through a web enquiry form via the WA online portal.

Commercial landlords that provide rent relief for a minimum of 3 months and freeze outgoings to small businesses that have suffered at least a 30 per cent reduction in turnover due to COVID-19

Grant of up to 50 per cent of the landlord’s 2019-20 land tax bill for the property in which an eligible tenant (i.e. small business with 30 per cent turnover reduction) is provided rent relief.

The grants are available in two tranches (each equivalent to 25 per cent of the 2019-20 land tax liability) covering an initial qualifying period of 1 March to 31 August 2020 applications for this round closed on 31 October 2020) and a second qualifying period of 1 September 2020 to 31 December 2020 (applications must be received by 28 March 2021).

NT Relevant commercial landlords whose property becomes vacant due to COVID-19

Reduction in the Property Activation Levy (2% for vacant land / 1% for unoccupied, non-residential buildings) for non-residential buildings within designated zones in Darwin CBD.

A relevant landlord must demonstrate that it has negotiated in good faith with tenants to be eligible for relief.

ACT Residential property tenanted

Delay in assessments for land tax (and rates) by up to three weeks for the first three quarters of 2020-21.

A land tax (or general rate) rebate to landlords who reduce tenant’s rent by at least 25 per cent equal to 50 per cent of the rent reduction to a maximum of $2,600 over six months or $100 per week.

Contact us

Rachael Cullen

Partner, PwC Australia

Tel: +61 2 8266 1035

Anne Bailey

Partner, PwC Australia

Tel: +61 (3) 8603 6818

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