StewartBrown Advisory

StewartBrown Chartered Accounting Firm

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2023 05 Federal Budget 2023-2024

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On Tuesday, 9 May 2023, Treasurer Jim Chalmers handed down the 2023-24 Federal Budget. As with all Budgets, these are announcements only and have not been legislated. The details are still to be worked through, and both Houses of Parliament need to pass legislation before the announcements take effect.

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2023 05 Government Funding Announcement & StewartBrown Analysis

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The announcement by the Government of additional funding totalling $11.3 billion over 4 years to deliver a pay increase to over 250,000 workers is a very positive initiative that will be supported by all stakeholders in the aged care sector.

The additional funding includes staff in residential and community aged care services. Due to the complexity of the residential aged care funding streams and it being the major portion of the additional funding, we have focussed this analysis on residential aged care.

Click here to download a PDF copy of the Aged Care Funding Budget Announcement and StewartBrown's Analysis.

2023 04 StewartBrown Aged Care Financial Performance Survey (December 2022)

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The StewartBrown December 2022 (six months) Aged Care Financial Performance Survey incorporates detailed financial and supporting data from 1,138 aged care homes (92,312 beds/places) and 66,703 home care packages across Australia. The quarterly survey is the largest benchmark in the aged care sector and provides invaluable insight into the trends and drivers of financial performance at the sector level and at the aged care home or programme level.

Click here to download a PDF copy of the Stewartbrown Aged Care Financial Performance Survey report for December 2022 (six months).

2023 03 StewartBrown FBT Newsletter

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The Fringe Benefits Tax (“FBT”) year ended on 31 March 2023 and each employer is required to calculate their liability for FBT. Where a liability for FBT exists, an annual return is required to be lodged and any tax paid by 21 May 2023. However, if the return is lodged electronically by a Tax Agent the due date of lodgement and for payment is 25 June 2023.

Where an employee reimburses their employer for the value of a taxable fringe benefit(s) provided to them (thereby reducing the FBT liability to nil) there is no requirement to lodge an annual FBT return. However, we strongly advise lodging a nil return in these instances as this starts the time period in which the ATO can challenge your FBT assessment. Where no FBT annual return is lodged, the ATO have no time limit and can raise an FBT assessment at any time. As with all tax lodgements, appropriate documentary evidence must be maintained. Where FBT reimbursements are paid by the employee to the employer they are subject to GST and 1/11th of these amounts must be disclosed on your business activity statement for the quarter in which the reimbursement is received. We will advise you of any such amounts, where applicable, when we prepare your FBT return.

To assist you in understanding your FBT obligations we enclose the following:

  1. An update of the main changes during the year, which you may need to consider when determining your FBT liability.
  2. A summary of taxable benefits typically provided to employees, in order to assist you in determining whether you may be providing such benefits to your employees.
  3. A summary of the on-going income statement reporting obligations.

We remind you that where motor vehicles are provided to employees or their associates for their private use, odometer readings must be recorded as at 31 March each year for each motor vehicle. We enclose a form which should be used to record this information. Also included is a form for your completion in respect of entertainment expenditure. We require this information in order to assist in the calculation of your FBT liability, if any.

If you have any queries in respect of your potential FBT liability or would like StewartBrown to perform a FBT ‘health check’ on your business, please contact one of the StewartBrown Managers or Partners to discuss.

Click here to download a PDF copy of the Stewartbrown 2023 FBT edition of our client newsletter.

2023 02 StewartBrown Land Tax Newsletter

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Welcome to the Land Tax edition of our client newsletter for 2023 where we hope to keep you informed of the important Land Tax compliance issues affecting owners of land in Australia. You may recall that Land Tax is a State tax and different rules apply in each State. In this newsletter we have summarised the position in NSW. If in any doubt about your particular Land Tax circumstances, please contact your StewartBrown Manager or Partner.

NSW LAND TAX REMINDER – ACTION REQUIRED BY 31 MARCH 2023

Land Tax 2023 – Registration Form

All landowners in NSW, including Individuals, Companies, Superannuation Funds and Trusts are reminded that the due date for lodgement of the initial return for land held as at 31 December 2022 is 31 March 2023. If you have previously registered for Land Tax you do not need to complete a variation form unless your ownership or usage details have changed and you haven’t already received a correct 2023 assessment.

If you own a property other than your principal residence and you have not previously registered with Revenue NSW, or if you need to lodge a variation form, please contact us as soon as possible. Penalties and interest may be levied for late registration and payment of land tax.

Land Tax applies to:

  • vacant land, including vacant rural land
  • land where a house, residential unit or flat has been built
  • a holiday home
  • investment properties
  • company title units
  • residential, commercial or industrial units, including car spaces
  • commercial properties, including factories, shops and warehouses
  • Land leased from State or Local Government

Land Tax is an annual, asset-based tax. It is irrelevant whether you are receiving income from the land or not.

Land Tax rates 2023

The Land Tax rate for 2023 is 1.6% (plus $100) on the combined value of all taxable land in excess of the threshold. The 2023 Land Tax threshold is $969,000 for all taxpayers except discretionary trusts, some unit (fixed) trusts and certain groups of companies where the threshold is nil.

Where the taxable value of land held in NSW is more than $5,925,000 (known as the “Premium Threshold”) the Land Tax payable is $79,326 for the first $5,925,000 in land value, then 2% over that amount.

Revenue NSW obtains property values from the NSW Valuer General, who values land in NSW on 1 July each year. The unimproved value of a taxable property is the value used as the taxable value of the land for Land Tax valuation purposes. The taxable value of each parcel of land is determined on the average value from the current year and the two past years, where applicable. When a parcel of land has been created less than three years ago – for example, through a subdivision or amalgamation – only the years after it was created are taken into account.

If you disagree with the valuation assessed to your land, you may object to the land valuation used in your Land Tax assessment, but that objection must be lodged in writing within 60 days of receiving your notice of assessment.

Land Tax exemptions potentially apply to:

  • principal place of residence (except if the property is rented or is used for business purposes)
  • the former principal place of residence of some deceased persons (subject to limitations)
  • land used for primary production
  • boarding houses
  • low cost accommodation
  • residential parks (including caravan parks)
  • non-profit organisations
  • retirement villages, aged care establishments and nursing homes
  • child care centres
  • crown or council land

Exemptions depend upon ownership and use of the land.

LAND TAX FOREIGN OWNER SURCHARGE

If you are a foreign person who owns residential land in NSW, you must pay a Land Tax Foreign Owner Surcharge (“LTFOS”) of 4% (previously 2%) of the value of the land. This is in addition to the 1.6% Land Tax amount.

The LTFOS is only payable by foreign persons owning land in NSW. It applies to all properties owned by foreign persons including their principal place of residence. Importantly there is no tax-free threshold applicable to the LTFOS. A foreign person can be:

  • an individual
  • a corporation
  • a trustee of a trust
  • a beneficiary of a land tax fixed trust
  • a government
  • a government investor
  • a partner in a limited partnership

An individual, who is not an Australian citizen, is a foreign person if they are not ordinarily a resident in Australia. Australian citizens are not foreign persons, no matter where they reside. NZ citizens holding subclass 444 visas and who reside in Australia more then 200 days prior to 31 December each year are also not foreign persons for the purposes of the LTFOS.

If you are a foreign person and own land in NSW you must inform Revenue NSW. It may well be that you are liable for the LTFOS but not land tax (for example if your NSW land value falls below the threshold for land tax assessment purposes).

Similar surcharges exist in other States although the rules can be quite different between States. Please consult with your StewartBrown Manager or Partner if you need further assistance with land tax or the land tax foreign owner surcharge.

Important (Discretionary Trusts)

If you own residential land via a discretionary (or family) trust it is highly likely the trust will be deemed a foreign person and therefore the LTFOS will apply, unless specific provisions in your Trust Deed prevent foreign persons from being beneficiaries. If we haven’t already assisted with reviewing your Trust Deed please contact us.

FIRST HOME BUYER CHOICE

Whilst not a Land tax, a new property tax has recently been created to assist first home buyers in NSW to enter the property market. The Property Tax (First Home Buyer Choice) Act 2022 received assent on 11 November 2022.

If you are an eligible first home buyer in NSW purchasing a property up to $1.5million in value, you now have a choice between paying stamp duty or a smaller annual property tax.

Once you have made your choice to opt into the property tax, you cannot change your mind once you are the owner of this land. However you have until you complete your purchase to change your mind and seek a re-assessment to pay the transfer duty.

The property tax will only be payable by first home buyers who choose it and will not apply to subsequent purchasers of a property.

Existing stamp duty exemptions and concessions for first home buyers will continue to apply for eligible purchases of up to $800,000. Further details of the scheme can be found here: https://www.nsw.gov.au/initiative/first-home-buyer-choice

Click here to download a PDF copy of the Stewartbrown 2023 Land Tax edition of our client newsletter.

Sydney Office

StewartBrown
ABN: 63 271 338 023
Level 2, Tower 1,
495 Victoria Avenue

Chatswood, NSW, 2067
Tel: (02) 9412 3033
Fax: (02) 9411 3242
info@stewartbrown.com.au


StewartBrown Advisory Pty Ltd
ABN: 19 143 011 750
AFSL: 355134
Level 2, Tower 1,
495 Victoria Avenue

Chatswood, NSW, 2067
Tel: (02) 9412 3033
Fax: (02) 9413 4202
info@stewartbrown.com.au

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