The Victorian, South Australian and New South Wales governments have announced a range of tax relief measures for individuals and businesses directly affected by bushfires.
These measures include:
- stamp duty relief for the purchase of replacement homes and motor vehicles,
- land tax relief for land in affected areas, and
- payroll tax relief for employers located in affected areas or whose employees are involved in bushfire-fighting efforts.
Continue reading below for information about the state-specific support.
Victoria
Hold on 2020 land tax assessments for affected areas
State Revenue Office Victoria (SRO) has announced there will be a hold on 2020 land tax assessments for people who own land in certain postcodes in the Alpine, Benalla, East Gippsland, Indigo, Mansfield, Moira, Snowy Valleys, Towong, Wangaratta and Yarra Ranges local government areas.
Land tax relief for the 2020 land tax year
Owners of properties that have been destroyed or substantially damaged will receive ex-gratia land tax relief in respect of land on which the affected properties are located. Owners of affected properties that were not destroyed or substantially damaged may also be eligible for ex-gratia land tax relief. According to the SRO, eligibility for relief will be considered on a case by case basis.
Land tax relief for the 2021 land tax year
Properties used to provide free accommodation for more than six months to people displaced by bushfires will receive ex-gratia land tax relief. Properties used to provide free accommodation for more than one month but less than six months to people displaced by bushfires will be eligible for reduced land tax (calculated proportionately).
We note that the owners of affected properties who qualify for the land tax principal place of residence exemption or the primary production exemption for the purposes of the 2020 land tax year (as determined by the use of the properties during the 2019 calendar year) should already be exempt from land tax.
Stamp duty relief for purchase of replacement homes
Where an existing home is destroyed in a bushfire, stamp duty relief of up to $55,000 is available on the purchase of a replacement home (or vacant land on which a replacement home is built). For replacement homes (or vacant land on which a replacement home is built) valued above $1 million, the duty relief is capped at $55,000 with the balance of the duty payable. The period in which to claim this relief is four years from 27 January 2020.
Stamp duty relief for purchase of commercial or industrial property in East Gippsland, Mansfield, Wellington, Wangaratta, Towong and Alpine
A 50% concession on transfer duty will apply to contracts of sale entered into on or after 27 January 2020 for the purchase of commercial or industrial property in the East Gippsland, Mansfield, Wellington, Wangaratta, Towong and Alpine local government areas. There is no limit to the number of times a person can claim this relief, which will be available until 30 June 2023. After this date, the previously announced commercial and industrial property duty concession of 50% will become available across Regional Victoria.
Stamp duty relief for purchase of replacement motor vehicles
A natural person who has a motor vehicle destroyed in a bushfire is eligible for motor vehicle duty relief of up to $2,100 per vehicle (including farm vehicles). For purchases of replacement vehicles valued above $50,000, the motor vehicle duty relief is capped at $2,100, with the balance of the duty payable. This relief must be claimed before 1 April 2022 and applies on the purchase of up to two motor vehicles. Relief for additional vehicles will be considered on a case-by-case basis.
Payroll tax relief
Regional employers with a registered address in the East Gippsland, Mansfield, Wellington, Wangaratta, Towong and Alpine local government areas will be assessed for payroll tax at the reduced rate of 1.2125%. The reduced rate will be backdated to apply from 1 July 2019 and will apply until 30 June 2022. After this date, as previously announced the reduced rate will apply to employers across Regional Victoria.
South Australia
Land tax relief
Owners of properties that have been destroyed or substantially damaged in a bushfire will receive ex-gratia land tax relief for 2019/20 and 2020/21 (i.e. two land tax years compared to one land tax year in Victoria) in respect of land on which the affected properties are located. Relief for owners of affected properties that were not destroyed or substantially damaged for 2020/21 will be considered by RevenueSA on a case by case basis.
Stamp duty relief for purchase of replacement homes
Where an existing home is destroyed in a bushfire, ex-gratia conveyance duty relief of up to $48,830 is available on the purchase of a replacement home. For replacement homes valued above $1 million, the duty relief is capped at $48,830 with the balance of the duty payable.
Stamp duty relief for purchase of replacement motor vehicles
Where a motor vehicle is destroyed in a bushfire, ex-gratia motor vehicle duty relief is available for the purchase of a replacement vehicle valued up to $50,000. This amounts to full duty relief of up to $1,940 for a passenger vehicle and $1,470 for a commercial vehicle. Where more than two vehicles are registered to the same owner, relief will be considered by RevenueSA on a case by case basis.
New South Wales
Extensions of time and payment deadlines
Taxpayers affected by the bushfires may be granted a deadline extension to lodge documents or returns, as well as to make payment of their tax liability. This includes an extension to lodge objections and to respond to a request for further information by Revenue NSW in respect of objections already lodged. Interest on taxes, duties and royalties that are due and payable may not be charged by Revenue NSW and arrangements may be made for payment of debts by instalments.
Stamp duty relief on purchase of replacement motor vehicles
Taxpayers that have a motor vehicle written off due to the bushfires may apply for a refund of motor vehicle duty paid on a replacement vehicle provided the taxpayer had comprehensive insurance for the written off vehicle and the insurance does not cover the duty for a replacement vehicle.
Payroll tax relief
Payroll tax relief is available on wages paid or payable to an employee for bushfire-fighting activities or emergency operations. Revenue NSW has stated that a letter outlining the employee’s involvement with Rural Fire Services NSW or NSW State Emergency Service would be sufficient to substantiate an exemption on wages paid to the employee.
When do these measures commence?
The above measures commence immediately. However, please note that at the time of writing, the exact details on the processes for applying for relief have not been finalised or made public by the Victorian, South Australian and New South Wales governments and revenue offices.
What are the next steps?
If you or your clients have been affected by the bushfires, please contact the Transaction Taxes team for assistance in determining what relief from state taxes may be available.
