Under the Vacant residential land tax (VRLT), owners of holiday homes in Victoria can breathe a sign of relief with those properties held in trusts or companies now may be appliable for the holiday home exemption.
The Government has delivered on its promise to extend the VRLT holiday home exemption in relation to land held by companies and trusts. Companies and trusts which held a family holiday home before 28 November 2023 will be able to access the exemption in substantially the same way as individuals under the State Taxation Amendment Bill 2024 currently before Parliament.
Any action needs to urgently be considered and implemented well ahead of 31 December 2024 to ensure the desired outcome in the next round of assessments.
Recap on Vacant residential land tax (VRLT)
For residential land across all of Victoria
The VRLT is:
- a yearly property tax imposed on residential properties in Victoria that are deemed ‘vacant’ for more than six months in a calendar year
- it currently applies to land in inner Melbourne areas but from 1 January 2025 it will apply to residential properties throughout Victoria
- it is in addition to any state land taxes and federal annual vacancy fee that are payable
- currently at 1% of the capital improved value of the land and can rise to 3% where the land is liable for VRLT three years in a row.
Owners are required to notify the SRO by 15 January if they own residential land that has been vacant for more than 6 months in the preceding calendar year.
Unimproved residential land
From 1 January 2026, VRLT will apply to all unimproved residential land in metropolitan Melbourne that has remained undeveloped for at least 5 years and is capable of residential development.
What is the change to the Holiday home exemption?
The exemption for holiday homes under VRLT has been the most topical with our clients. Prior to the Bill, the holiday home exemption was largely available only to individual home owners, not including properties held by trusts and companies. This caused significant concern among property owners as it is common to hold holiday homes through companies and trusts for asset protection and other purposes.
The amendments proposed under the Bill should rectify the current issue and provide Victorian property owners some welcomed relief, however it may only provide limited relief to holiday homes held through companies and unit trusts due to the drafted eligibility criteria.
Eligibility criteria for companies and trusts
For companies and trusts that own holiday homes in Victoria, an exemption from VRLT is available if the following conditions are met:
- The owner held the holiday home on 28 November 2023, or acquired the property after that date under a contract which was entered into on or before 28 November 2023, and the owner has continuously held it since that time
- There has been no change in the shareholding or beneficial interest in the land owner since 28 November 2023, unless the change involves persons who are relatives of one another
- There needs to be a minimum ownership interest of 50% in land owning companies or unit trusts by one or more individuals who have another property in Australia that they use and occupy as their principal place of residence (PPR). For a land owning family discretionary trust, a specified beneficiary or a relative must have used and occupied other land in Australia as a PPR.
- The land has been used and occupied as a holiday home for a period of at least 4 weeks in a calendar year by an individual referred to in paragraph c.
- The Commissioner of State Revenue is satisfied that the land is used and occupied as a holiday home, taking into account the location of the land, the distance between the land and the PPR of the relevant individuals and the nature and frequency of the use of the land.
Challenge for homes held through companies and unit trusts
The challenge for holiday homes held in companies and unit trusts is that to qualify for the exemption, at least 50% of the shares in the company or units in the trust needs to be held directly by an individual. Generally, shares or units are held through discretionary trusts, rather than directly by the individual. Therefore, these companies and unit trusts would not be eligible for the exemption. The Property Council of Australia has notified the Government of this limitation in hopes that Government will review this position.
Contiguous land
For owners eligible for the holiday home exemption, they could also receive an exemption from VRLT for any land that they own that is adjoining to the holiday home and used solely for the private benefit and enjoyment of the person who uses and occupies the holiday home (for example, tennis courts and swimming pools). This exemption is relevant for owners with holiday home and contiguous land (on separate title) located in metropolitan Melbourne because from 1 January 2025, vacant land within metropolitan Melbourne left unimproved for 5 years or more becomes liable for VRLT.
How SW can help
Owners of holiday homes in Victoria should carefully consider the above changes and any appropriate actions to take full advantage of the relevant exemptions that are available. Any actions needs to urgently be considered and implemented well ahead of 31 December 2024 to ensure the desired outcome in the next round of assessments.
Our state tax experts can provide you with appropriate advice and assistance in relation to VRLT and any eligibility for exemption.
Contributors
上周，财政部长公布了2024年联邦预算，致力于应对通货膨胀、高利率和生活成本。 在充满挑战的环境中，企业和个人都感受到了压力。为应对这些经济状况，澳大利亚政府要有战略远见并采取适应性措施。
今年的联邦预算正值关键时期，民众对其寄予厚望，期待从中找出紧迫问题的解决方案。我们将探讨 2024/25年联邦预算的各种复杂问题，并发掘其中隐藏的亮点。贵公司可以把握重要机遇，借助有洞察力的见解，抵御财务逆境并实现增长。
联邦预算对贵公司有何意义？
我们的联邦预算快讯帮助您总览预算中的亮点并就贵公司所处行业的潜在机遇提出见解：
SW Accountants & Advisors (SW) is pleased to announce the appointment of Christine Krause as a Director in our Risk Advisory and Internal Audit team.
“We are thrilled to be able to attract such quality talent in Christine. This not only demonstrates our commitment to supporting our clients’ needs, but also to our culture that is underpinned by a clear purpose and strong values. With Christine, we see great alignment with our capabilities, clients and broader SW networks,” said Mr Duane Rogers, CEO.
SW’s strong reputation in financial services related to Foreign ADIs, and funds management will be further strengthened by Christine’s expertise in financial services, including investment management. Christine’s long-standing role in Risk with Australia’s sovereign wealth fund, Future Fund, will strengthen SW’s risk advisory and assurance capability.
Ms Christine Krause says: “I am excited to be joining the SW team and being part of the internal audit and risk advisory growth strategy. I am proud to be joining an organisation that has built its culture from focusing on both its people and clients in order to achieve shared success, and am looking forward to living and breathing that every day.”
Partner, and Head of SW’s Assurance and Advisory Division, Mr Rami Eltchelebi says: “It’s fantastic to have Christine join SW as a partner. Her appointment strengthens our capability as she brings 25+ year of professional experience working both in the profession (KPMG, PwC) and in industry. Developing and leading internal audit and risk management functions in industry makes Chrstine an advisor of choice as she draws on her industry experience to provide value that clients can relate to.”
Mr Rogers says, “Together with the appointment of Vanessa Priest and Kirsty McDonnell last month in Sydney, and Trent Godden-Minette in Melbourne in January this year, we are excited to bring four new partners on board that all have specific talents and a desire to drive growth in their respective markets. Pleasingly, and with a lot of hard work from our people and the support of our clients, we are on track to deliver on our four-year strategic plan. These appointments further bolster our momentum in the market and ensure we can support our growing client needs.”
In addition to financial services, our experienced team also service several other key sectors: government, utilities, education, hospitality and the private sector.
China is proposing mandatory sustainability reporting for listed companies, potentially impacting Australian subsidiaries of Chinese firms and Australian investors.
Draft guidelines unveiled in February mandate sustainability reporting for companies listed on the Shanghai, Shenzhen, and Beijing Stock Exchanges. This move aligns with global trends as jurisdictions worldwide increasingly require sustainability and climate related reporting.
Guideline areas
The guidelines will encompass areas such as:
- Emissions
- Climate impact
- Governance
- Strategy
- Risk management
What does this mean for Australian Businesses?
- Australian businesses with connections to Chinese entities must prepare for heightened scrutiny regarding carbon emissions and adherence to international reporting standards.
- Chinese entities listed on the mentioned exchanges will be expected to disclose comprehensive sustainability reports, drawing on both domestic and international standards.
Globally, many jurisdictions have now released draft or final standards, draft or final legislation and rollout plans for companies to implement mandatory sustainability reporting. In Australia some entities are already including mandatory climate disclosures under the NGER legislation, and many more large companies in Australia are expected to need to comply with sustainability disclosure standards in the coming years. China mandating sustainability disclosures is in-line with what is happening in other jurisdictions and evidence of the current global trend. There is also significant focus in China on reducing emissions.
How can SW help?
In response to this shift, SW offers support to companies through gap analyses and readiness assessments for mandatory sustainability reporting. SW Partners, Rene Muller, John Dorazio, Tom Mullarkey, and Associate Director Jimmy Cao are available to provide guidance and assistance throughout this transition.
Reach out to your SW contacts or the key contacts here for a conversation.
Contributors
SW Accountants & Advisors (SW) is pleased to announce the appointment of Vanessa Priest and Kirsty McDonnell as Tax Partners in our growing Sydney office.
“We are thrilled to welcome Vanessa and Kirsty to our Sydney office,” said Mr Duane Rogers, CEO. “Their combined expertise and leadership qualities will undoubtedly strengthen our team and enhance our ability to continue to deliver exceptional service to our clients.”
Bringing a wealth of experience from a boutique practice, with extensive backgrounds in large and mid-tier firms, Vanessa and Kirsty are set to play a pivotal role in advancing SW’s national growth strategy. Their appointment marks a significant step forward in the firm’s commitment to sustained and meaningful growth.”
Says Partner Ms Kirsty McDonnell: “I am excited to be part of SW’s growth strategy, supporting the Sydney office in particular. I’m proud to be joining a very a strong technical team of advisors that have a clear culture of driving success for their clients and team members. Joining SW will support our clients’ broader needs across audit, specialist tax services and corporate finance. Additionally, having a strong collaborative and supportive culture is important to me, and one that we feel proud to be a part of.”
Ms Vanessa Priest, Partner, says: “Caring for my clients, providing support and growth for my team and contributing to a great work culture are the key drivers for me. SW has the core values and principles and has the technical expertise and services my clients need.”
National Head of Tax, Ms Sam Morris said: “Their complementary capabilities and strong presence in the tax market will not only bolster our brand recognition in Sydney but also contribute to the firm’s continued growth and success.”
“We are confident that Vanessa and Kirsty will seamlessly integrate into our organisational culture,” added Mr Rogers. “Their addition to our team underscores our commitment to attracting top talent and providing unparalleled value to our clients.”
Please join us in extending a warm welcome to Vanessa Priest and Kirsty McDonnell as they embark on this exciting new chapter with SW Accountants & Advisors.
感谢您一直以来的支持。 祝愿您在新的一年里幸福安康、成就辉煌。Thank you for your support throughout the year. We wish you a healthy, successful & prosperous new year.
SW Accountants & Advisors (SW) is excited to announce the promotion of Trent Godden-Minette to partner, effective 1 January 2024, growing its partner ranks nationally and demonstrating an ongoing commitment to growth and client support.
Mr. Duane Rogers, CEO and Partner of SW congratulates Trent on his appointment and is pleased to see the firm’s purpose ‘Build lasting relationships with our clients and people to achieve shared success’, being demonstrated today. “Trent has displayed exceptional talent over many years to be promoted. His milestone achievement today is a testament to the firm’s unwavering commitment to support dedicated and talented individuals on their career journey,” says Mr Rogers.
“Our values are at the heart of our culture and Trent was the inaugural winner of the Open Doors Values Award, recognising his technical skill, approachability, and consistent positive demeanour towards colleagues at all levels,” remarked Mr Rogers.
National Head of Assurance & Advisory, Mr Rami Eltchelebi congratulates Trent: “Trent has been part of our growth story since he started with us as a graduate. We are so pleased to now have him join our partnership. Trent’s admission will create further capacity for growth and allow the firm to achieve its aspirations around creating a growing national practice with full capability in every area.”
Having been with the firm since accepting a graduate role in 2015, Trent became a Chartered Accountant in 2018 and has been busy building his knowledge and capability, having undertaken two secondments, one in the UK and the other at the University of Melbourne to facilitate the adoption of AASB 15 & 1058 (revenue standards). His deep technical accounting expertise has led him to present financial reporting and accounting standard updates across various platforms.
The firm’s recent record growth has coincided with the development of SW’s Senior Leadership program. Says Mr Rogers, “We have invested in developing our people with the right mix of skills required to not only service our clients, but also become great leaders in our business. I look forward to seeing Trent continue to open doors to opportunities for his team, his clients and the firm.”
Trent’s promotion is in addition to the three appointments made in July this year, with Laura Toscano and Janelle McPhee, and the lateral Partner appointment of Paul Hum. SW now has 42 partners across Brisbane, Melbourne, Sydney and Perth.
SW is delighted to announce the appointment of Greg Will, Director, to the SW Executive Board, effective 1 January 2024.
Says Chair of SW, Mr Stephen O’Flynn, “Since Greg and his team joined SW in 2022, he has played a key role in building our visibility and capability in our Sydney market and more broadly nationally with a focus on business and private client support. Having worked in professional practice for over 30 years, Greg is a trusted advisor to business and a well-regarded authority on private business issues, regularly commentating in national and local press on how to increase business value.
Being voted in by his fellow partners so quickly speaks to his calibre and professional standing. Greg’s leadership role will further enhance the firm’s strategic priority to build a larger presence in the Sydney market and I look forward to working closely with him.”
Greg fills the vacancy created by Steven Allan, Business & Private Client Advisory Director, who steps down from the Executive Board after 5 years’ service.
“I would like to thank Steve for the significant role that he has played on the Board and Executive Committee over a number of years. Steve has played an instrumental role in growing our national practice, being involved in the recruitment of most lateral partners and has had many international trips to meet with our friends at SW International as the international network has grown.” said Mr O’Flynn.
Mr Greg Will stated: “”I am really excited and honoured to be voted onto the board by my fellow Partners and to have a hands-on role in upholding the governance of the firm. The firm is in a strong growth phase, and I am looking forward to working with my fellow board members to maintain this momentum.”
Steve reflects on his time on the SW Board: “During my tenure, I have had the privilege of working alongside dedicated individuals committed to the success of our firm. I would like to express my gratitude to each member for their collaboration and support. Reflecting on my service, I am proud of the progress we’ve made together. The commitment to excellence, emphasis on teamwork, and the prioritisation of our goals have been instrumental in our achievements. I remain confident in the firm’s continued success and growth and extend my best wishes to the incoming leadership and the entire team.”
Over the next four years, SW has a strategic focus on: Growth, People and Digital, with leadership, governance and culture being the key building blocks that will underpin success. With a ranking of 22 in the 2023 Australian Financial Review Top 100 Accounting Firms*, SW continues to be a source of interest for clients and practitioners looking for a firm they can work with that has a long history with good financial stability, and an eye to the future.
Greg Will will work closely with reappointed board member Hayley Underwood, Duane Rogers as CEO, Bessie Zhang, Stephen O’Flynn (Chair) and independent director, Sangeeta Venkatesan.
SW congratulates Greg on his appointment and thanks Steve for his significant contribution during his tenure.
*Of all national accounting practices, SW ranks 9th.
Welcome to an exclusive interview series where SW’s Director, Rick, engages in insightful conversations with Polar 993 Founder, Adam Lindell. Together, they dissect the intricate world of fund management, offering an insider’s perspective on the nuances of navigating the financial landscape.
Embark on a journey into the fundamentals of fund management as SW’s Director, Rick Hemphill and Polar 993 Founder, Adam Lindell share invaluable advice tailored for first-time fund managers. Uncover the key insights, strategies, and essential knowledge that lay the groundwork for a successful venture into the world of fund management.
In the second episode, SW’s Director, Rick Hemphill and Polar 993 Founder, Adam Lindell unravel the complexities of capital sourcing, focusing on the pivotal task of raising the initial $25 million. Discover proven strategies, actionable tips, and real-world experiences that illuminate the path for fund managers seeking to secure the crucial capital to kickstart their investment journey.
Join SW’s Director, Rick Hemphill and Polar 993 Founder, Adam Lindell in the final chapter of this enlightening series, where they explore the ever-evolving investment market trends. Delve into the realms of Build-to-Rent (B2R), Build-to-Sell (B2S), and Managed Investment Schemes (MIS). Gain a comprehensive understanding of these trends, empowering fund managers to navigate the dynamic landscape of investment opportunities.
From all of us here at SW, we would like to thank you for your continued support throughout 2023. We are incredibly proud of how our community has demonstrated the values in this year #ownit #loveyourwork #embracetheride #sharetheload #opendoors. We wish you and your family the very best for the festive season and a healthy, happy and successful 2024.
Our offices will be closed from Friday 22 December 2023, reopening Monday 8 January 2024.