Victorian State Taxation Changes for Social Housing and Schools

September 13, 2024
2:18 pm
Tax

This article applies to owners of social and emergency housing, and non-government schools.

State Taxation Amendment Bill 2024 (Vic)

On 28 May 2024, the State Taxation Amendment Bill 2024 (Vic) (the Bill) passed the Victorian Parliament and has received Royal Assent. Division 1 of Part 4 of the Bill (amendments to the Land Tax Act 2005 (Vic) (the Land Tax Act)) will have commenced on 1 January 2024. Part 5 of the Bill (relevant amendments to the Payroll Tax Act 2007 (Vic) (the Payroll Tax Act)) commenced on 1 July 2024.

Operationally Significant Changes

The Bill inserts a range of amendments into the Land Tax Act and the Payroll Tax Act. The most significant (from an operational perspective), include:

a land tax exemption for social housing and emergency housing; and
an amendment to the exemption from payroll tax for non-Government schools and non-profit organisations providing educational services to those schools.

Further Information

Land tax exemption

Under the amendments to the Land Tax Act, eligible owners of land used exclusively as social or emergency housing, or vacant land declared by the owner for future use as social housing or emergency housing can apply to the Commissioner for an exemption from land tax liability for that land.

To be eligible for an exemption, the owner of land used or declared for use as social housing must be a charitable institution. For land that is used or declared for use as emergency housing, the owners must be a charitable institution, participating registered agency (as defined by the Housing Act 1983 (Vic)) or public statutory authority.

Payroll tax exemption

In summary, from 1 July 2024, unless a non-government school is declared by the Minister for Education to be exempt from payroll tax, it will no longer be exempt by virtue of being a non-government school.

Amendments to the Payroll Tax Act vary the meaning of exempt wages so that wages paid or payable by a religious institution that is either a school that is not a declared school, or a non-profit organisation that provides an educational service in connection with the curriculum of a school that is not a declared school, are not exempt wages. In addition, wages paid by a non-profit organisation that provides an educational service to a school that is not a declared school are also not exempt wages.

Please click here to access the full Bill.