In brief

The State budget for Victoria was handed down on 24 November 2020 ("Budget"). The Budget includes a number of measures dealing with land tax, duty and payroll tax.

Key takeaways

Land tax

The State will allow a 50% land tax discount for eligible "build-to-rent" developments, including an exemption from the absentee owner surcharge, until 1 January 2040. This will begin in the 2022 land tax year. Eligibility criteria are expected to be set out once legislation is tabled in Parliament.

A land tax exemption for land owned and occupied by not-for-profit clubs that provide for the social, cultural, recreational, literary or educational interests of their members will also be allowed for the 2021 land tax year.

Land transfer duty

The State will bring forward a 50% land transfer (stamp) duty concession for commercial and industrial properties in regional Victoria. This will apply to transfers under contracts entered into on or after 1 January 2021.

A land transfer (stamp) duty waiver of up to 50% on purchases of residential property in Victoria with a dutiable value of up to AUD 1 million will apply to contracts entered into on or after 25 November 2020 and before 1 July 2021. A waiver of 50% for new residential properties, and 25% for existing residential properties, will be allowed for contracts entered into between the day after announcement (25 November 2020) and 30 June 2021.

Payroll Tax

The State will allow a payroll tax credit for businesses with payrolls less than AUD 10 million whose Victorian taxable wages increase in 2020-21 and 2021-22. This will apply to the 2020-21 and 2021-22 payroll tax years.

There will also be an increase in the annual reporting threshold, from AUD 40,000 to AUD 100,000, for businesses registered for payroll tax in Victoria. This will apply from 1 July 2021.


The build-to-rent concession will benefit developers of housing with the offer of a halving of land tax for a period of 18 years. NSW offered a similar concession earlier in the year. Build-to-rent is well known overseas but only just taking off in Australia. Duties relief for residential conveyancing also provides an immediate incentive for buyers for contracts entered into on or after 25 November 2020 and before 1 July 2021. The overall trend appears to be one of stimulating the retail property sector and small business as a means of encouraging a post-pandemic recovery in Australia.