The NSW Government will continue to support local businesses impacted by COVID-19 with policies to make business management easier. This will allow impacted businesses the opportunity to re-build, attract investment and create jobs for the future. The Government has endeavored to turn around a historic $16b budget deficit bought on by the COVID-19 pandemic by undertaking a major reform of its tax system.
We have directed our attention to the following updates:
- Payroll Tax
- Land Tax
- Stamp Duty
- Out and About Scheme
In May 2020, the NSW Government brought forward by one year, the increase in payroll tax threshold to $1 million.
This Budget announces:
- a further permanent increase in the payroll tax-free threshold from $1 million to $1.2 million from 1 July 2020.
- A cut to the payroll tax rate from 5.45% to 4.85% from 1 July 2020 for two years.
Land tax relief extension
The Budget extends the land tax COVID-19 relief for landowners to 28 March 2021 in modified form. 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;
- the tenant needs to re-establish eligibility by demonstrating a 30% decline in turnover (15% for non-profits) for the December quarter 2020.
Stamp Duty for future homebuyers
Home buyers in the lower price range could be big winners under a major overhaul of the state’s stamp duty tax. The new take on stamp duty will give house hunters the choice of paying stamp duty upfront or opting for a smaller annual property tax.
The Government will seek community feedback on the proposed model, which it says will inject more than $11 billion into the NSW economy in the first four years.
Out and About program
The NSW Government will inject up to half a billion in the Out and About program to stimulate spending in the local economy, including restaurants, visitor sites and cultural attractions.
Every adult in NSW will get four $25 digital vouchers to spend separately on dining and entertainment. Two vouchers can be used for eating in venues and two can be used for entertainment and recreation –cinemas, amusement parks, performing arts and art galleries. The program will be trialed in Sydney’s CBD in December 2020 and rolled out across the rest of the state next year.
As your trusted advisor we understand the necessity to be proactive and channel Government information to all our clients and friends when available. At Halkin Business Partners, our stimulus team is dedicated to assisting you with any queries you may have regarding the State budgets announcement. Please contact us at email@example.com and a consultant will revert back with urgency.