The New South Wales Treasurer handed down the NSW Budget for 2020–21 on 17 November 2020.
The following targeted stimulus measures have been introduced to create and support jobs and to encourage investment in NSW:
Reduction in payroll tax rate: The payroll tax rate will be reduced from 5.45% to 4.85% for 2 years, from 1 July 2020 to 30 June 2022.
Increasing the payroll tax threshold: The payroll tax threshold is to be increased from $900,000 to $1.2 million. The new threshold will apply retrospectively from 1 July 2020.
Relief for Government fees and charges: Small and medium sized businesses that do not pay payroll tax will be eligible to receive a $1,500 digital voucher for the cost of government fees and charges.
Extended land tax relief: The land tax relief for landlords introduced in response to COVID-19 is to be extended to 28 March 2021 in a modified form. Landlords that reduce the rent of eligible tenants can apply for a land tax concession on relevant properties. 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; and
- the tenant needs to re-establish eligibility by demonstrating a 30% decline in turnover (15% for non-profits) for the December quarter 2020.
Proposed reform for stamp duty: The State Government will commence public consultation on tax reforms to reduce the upfront costs for property buyers. The proposed model would:
- give property buyers the choice between paying stamp duty upfront (as is the case today), or opting into a new system that would see a smaller, but annual, property tax;
- support and incentivise home ownership with a lower property tax rate for owner-occupiers compared to investment properties and commercial properties;
- enable property owners 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; and
- replace the current stamp duty concessions provided to first home buyers with a new grant of up to $25,000.
Be informed
If you would like to discuss the impact of the NSW State Budget for your business, our expert team at Calibre Business Advisory can assist. Please feel free to contact us on 0292612177.