Overnight, the Palaszczuk Government released their State Budget 2019-20, dedicating initiatives to help Queensland's business sector and continue growth across our State economy.
We breakdown the key initiatives delivered in the State Budget aimed towards Payroll Tax and Land Tax, which may impact you or your business.
The State Budget has delivered targeted Payroll Tax initiatives, delivering lower taxes for an estimated 13,200 small and medium sized businesses.
The following are key components relating to changed involving Payroll Tax:
- Increase in Payroll Tax Exception Threshold from $1.1 million to $1.3 million for employers with annual wages up to $6.5 million.
- Increase in Payroll Tax Rate for businesses up to and including $6.5 million taxable wages to 4.75%.
- Increase in Payroll Tax Rate for Large businesses with taxable wages above $6.5 million to 4.95% - this is a 2% increase.
Payroll Tax - Regional Queensland Businesses
From 1 July 2019, a new Regional Payroll Tax discount will be introduced to eligible businesses with 85% of their employees outside of South East Queensland.
The following points highlight the new Payroll Tax Rates for Regional QLD businesses and the associated reduction:
- The Payroll Tax Rate for Medium-Sized Businesses (up to and including $6.5 million taxable wages) will be reduced to 3.75% - a 1% reduction.
- The Payroll Tax Rate for Large Businesses in Regional Queensland ($6.5 million and above) will be reduced to 3.95% - a 1% reduction.
The Regional areas outside of South East Queensland eligible for the rebate will include: Cairns, Central Queensland, Darling Downs Maranoa, Mackay - Isaac - Whitsunday, Queensland - Outback, Townsville and Wide Bay.
Payroll Tax Rebates for Hiring Businesses
From 1 July 2019, Queensland employers who have increased their number of full-time employees over the next two year period (2019-20 & 2020-21) will be eligible for an Employment Growth rebate.
Additionally, the Government will be extending their Apprentice & Trainee Payroll Tax Rebate initiative until 30 June 2021. The rebate will be paid at 50% of apprentices and trainees wages.
The Back to Work initiative will also be continued, providing financial support (up to $20,000) to businesses who employ eligible jobseekers.
Whilst current Land Tax remains unchanged for Queenslanders with investment or commercial properties; Australian citizens, permanent residents, companies, foreign companies, and trustees of foreign trusts will be impacted.
Australian Citizens and Permanent Residents
Australian citizens and permanent residents living overseas will be assessed as resident individuals - therefore NO Land Tax will be applicable.
Companies and Trustees with Landholdings
The following outlines the Land Tax Rate changes for Companies and Trustees with landholdings:
- Land Tax Rates will increase to 2.25% for Companies and Trustees with landholding of more than $5,000,000 but $10,000,000 or less from 30 June 2019.
- Land Tax Rates will increase to 2.75% for Companies and Trustees with landholdings for more than $10,000,000 from 30 June 2019.
There will be no change to the Land Tax Rate for Companies and Trustees with landholdings of $5,000,000 or less.
Please see the below table, outlining these changes:
|TOTAL TAXABLE VALUE||RATE OF TAX|
|Less than $350,000||0|
|$350,000 or more but less than $2,249,999||$1,450 plus 1.7 cents for each $1 more than $350,000|
|$2,250,000 or more but less than $5,000,000||$33,750 plus 1.5 cents for each $1 more than $2,250,000|
|$5,000,000 or more but less than $10,000,000||$75,000 plus 2.25 cents for each $1 more than $5,000,000|
|$10,000,000 or more||$187,500 plus 2.75 cents for each $1 more than $10,000,000|
Foreign Companies and Trustees of Foreign Trusts, and Absentee Surcharge
From 30 June 2019, a new Land Tax Foreign Surcharge of 2% will apply for 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.
Additionally, from 30 June 2019, the Absentee Surcharge will increase from 1.5% to 2%.
The increased surcharge will apply to foreign individuals who own land and do not ordinarily reside in Australia. Foreign individuals who own land and live in Australia will continue to be assessed as resident individuals.
For More Information
For more information on how the Queensland State Budget 2019-20 will impact you or your organisation, please contact the Archer Gowland office on (07) 3002 2699.