The Queensland budget handed down by The Deputy Premier and Treasurer in June contained a number of changes and initiatives to deliver lower taxes for approximately 13,000 small and medium businesses, and new incentives for all businesses to hire more Queenslanders. The key points for QLD businesses and investors from this budget with respect to Payroll Tax and Land Tax were:
Payroll Tax Changes
The tax-free threshold for businesses having to pay payroll tax increased from $1.1m to $1.3m.
The payroll tax rate for businesses with a payroll up to $6.5m will remain at 4.75%. Regional businesses* will however receive a discount of 1% to 3.75%.
The payroll tax rate for large businesses with a payroll above $6.5m will have a new rate of 4.95% (up 0.2%). Regional businesses* will however receive a discount of 1% to 3.95%.
For two years there is a new employee rebate for growing businesses that applies to employers who have a net growth in total full-time employees over a year. It applies as a 100% rebate on the payroll tax relative to net growth in employees, up to a cap of $20,000.
There is also up to $20,000 in financial support for hiring eligible job seekers under the Back to Work initiative.
A further two more years of the Apprentice and Trainee payroll tax rebate is available which is a 50% rebate off apprentice and trainee wages paid.
* Regional businesses have a registered business address in regional areas and where 85% of taxable wages are paid to employees who reside in regional Queensland i.e. outside of South East Queensland.
Land Tax Changes
Queenslanders are not liable to pay land tax on land, or part of the land, that they use as their home. Land tax is only payable when the total taxable value of an owner’s investment or commercial property landholdings exceeds the relevant tax-free threshold.
There were no changes to the land tax rates or thresholds for resident individuals that own land (e.g. an investment property) other than their home.
Similarly, there were no changes to the land tax rates or thresholds for companies and trustees with landholdings under $5m.
For companies and trustees with landholdings of between $5m and $10m, the land tax rates will increase from 2.00% to 2.25% from 30 June 2019.
For companies and trustees with landholdings of more than $10m, the land tax rates will increase from 2.50% to 2.75% from 30 June 2019.
Australian citizens and Australian permanent residents holding permanent visas living, working or travelling overseas for an extended period will no longer be assessed as absentees, and will benefit from the higher tax-free threshold and lower rates of tax that currently only apply to resident individuals. They will also not have to pay the absentee surcharge.
The absentee surcharge will increase from 1.5% to 2.0%. The increased surcharge will apply to foreign individuals who own land and do not ordinarily reside in Australia.
A new land tax foreign surcharge of 2.0% will apply to foreign companies and trustees of foreign trusts that own land. The surcharge will apply to the portion of the taxable value of the taxable land that is equal to or greater than $350,000.
If you would like to discuss these changes with respect to you and your business, please contact our office on (07) 3862 2003 to arrange a free consultation.