The Queensland State Budget 2009-10 was handed down on 16 June 2009. In 2009-10, State tax collections are expected to be $2,087 per capita - $400 lower than the average $2,487 per capita for other states and territories.

The taxation initiatives announced in the Budget are as follows:

Transfer Duty

In the 2008-09 Budget, the transfer duty exemption threshold for first home buyers purchasing established homes was increased to $500,000. The exemption threshold for first home buyers purchasing vacant land is $150,000. To encourage demand in the housing sector, the 2009-10 Budget includes:

• An increase in the threshold for first home buyers purchasing vacant land from $150,000 to $250,000, providing savings of up to $5,675; and
• Extending the concession for first home buyers purchasing vacant land valued at up to $400,000.

In light of the tighter fiscal conditions, duty on the transfer of core business assets will now be abolished by 1 July 2013, in accordance with the timeframe included in the new Intergovernmental Agreement on Federal Financial Relations.

Payroll Tax

Queensland currently has a highly competitive payroll tax regime.The overall payroll tax rate of 4.75% is the lowest of any state and the exemption threshold of $1 million is among the highest thresholds in mainland Australia.

The Budget provides further relief for businesses that employ apprentices and trainees. In 2009-10, the Government will provide a 25% payroll tax rebate on the eligible wages of apprentices and trainees in addition to these wages being exempt from payroll tax.This measure will save businesses approximately $15 million in 2009-10.

Land Tax

The Queensland Government recognises that annual land tax liabilities may have cashflow implications for businesses and investors. To assist in alleviating these cashflow issues, an instalment payment option for land tax liabilities will be introduced in 2010-11, spreading the tax liability over a longer period.

In 2009-10, as an interim measure, the payment period for land tax assessments will be increased from 30 days to 90 days with the financing cost to Government estimated at approximately $8 million.

Further details of the above measures are contained in Budget Paper 2 at www.budget.qld.gov.au.

To find out more about the implications of the Queensland State Budget, contact Vincents taxation experts Daryl Jones or Craig Darley.