Victorian (state) tax exemptions

Duties ('stamp duty')

What are duties?

Duties (or stamp duties) are taxes that the Victorian state government charges on certain transactions, known as dutiable transactions. The legislation in which these duties are set out is called the Duties Act 2000 (Vic). The most commonly known transaction that duty is charged on is the transfer of land. However, duties are also charged on declarations of a trust over property, transfer of a motor vehicles and purchasing insurance, as well as on other transactions.

In general, incorporated not-for-profit community organisations will be liable to pay duties, in accordance with the Duties Act, in the same way that any other organisation or individual is required to.

Are there any exemptions from duties available for not-for-profit community organisations?

In general, only community organisations that are ‘charitable organisations’ are eligible for exemptions from some of the duties as listed in the Duties Act.  In general, charitable organisations are exempt from paying any duty on the following transactions (where they would normally attract a duty):

• transfer of property (eg. land)
• declaration of trust over property
• declaration of trust over non-dutiable or non-identified property, and
• application for registration or transfer of registration of a vehicle used to convey incapacitated persons.

There are also some limited duty exemptions set out in other legislation. For example, the Associations Incorporation Reform Act 2012 (Vic) provides certain exemptions from 'duty' in relation to 'transfers' of property when a group incorporates as an association (ie. property of the unincorporated group or other type of incorporated entity will transfer to the ownership of the association) or when two or more incorporated associations amalgamate under the Act.  

What does our organisation have to do to get the exemption?

To get an exemption from state stamp duties, it is not sufficient to be a registered charity with the ACNC.  Your organisation will have to apply for the exemption to the Victorian State Revenue Office (SRO), and provide documentation to prove its charitable status (including rules or constitution and other supporting documents). Applications should be made after a dutiable transaction is completed. You can seek advice from the SRO regarding your charitable status if you are unsure. We have included a link to the application process in the Resources section below.

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Payroll tax

What is payroll tax?

Payroll tax is a tax that the Victorian State Government charges on ‘wages’ paid by an employer to its employees. The tax is calculated as a percentage of the ‘wages’. ‘Wages’ is defined very broadly and includes salaries, commissions, bonuses, allowances, employer superannuation contributions, fringe benefits, etc. The legislation in which this tax set out is called the Payroll Tax Act 2007 (Vic).

Unless exempt, not-for-profit community organisations that employ people in Victoria will be required to pay payroll tax if the amount they pay in employee wages exceeds the ‘threshold amount’ set by the State Government. The Payroll Tax Act includes quite a broad definition of 'employee' which may extend to include some workers that your organisation considers to be 'contractors' for the purposes of other legislation. For more information about payroll tax, see the Resources section below. 

Are there any exemptions from payroll tax available for not-for-profit community organisations?

There are a number of exemptions from payroll tax that not-for-profit community organisations can apply for. In particular, not-for-profit organisation which have charitable, benevolent, philanthropic and patriotic purposes may be exempt from paying payroll tax in relation to wages paid to people who are engaged exclusively in work of a charitable, benevolent, philanthropic or patriotic nature.  To get an exemption from state payroll tax it is not sufficient to be a registered charity with the ACNC, the State Government will need to be satisfied that your organisation meet the definition of charity in the Payroll Tax Act 2007 (Vic).

There are also a number of other exemptions. We have included a link to the application process in the Resources section at the end of this page.

How does our organisation get the exemption?

If you think your organisation may be eligible for an exemption from paying payroll tax, contact the SRO to apply for an exemption. You will need to lodge a written application, together with any supporting documents.

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Land tax

What is land tax?

Land tax is a tax that the Victorian State Government imposes on the ‘total taxable value’ of land owned by the organisation in Victoria. The legislation which imposes the tax is called the Land Tax Act 2005 (Vic).

In general, community organisations that own land which is subject to the tax will be liable to pay the tax, unless they qualify for an exemption or concession.

Are there any exemptions from land tax or concessions available for not-for-profit community organisations?

An exemption from land tax means an organisation does not have to pay any tax for the land covered by the exception. Exemptions from land tax are available in some circumstances for:

• charitable organisations (although only when the land is used exclusively for charitable purposes or leased in a certain way)
• organisations that provide or promote sporting, outdoor recreation or outdoor cultural activities (although they must be not-for-profit organisation and some conditions apply).

Even if an exemption does not apply, a not-for-profit organisation may be entitled to a concessional rate of tax. A concession from land tax means an organisation pays a lower rate of tax for land on which they must pay land tax. A concessional rate may apply where land is owned and occupied by a club or association that is carried on exclusively to provide for the social, cultural, recreational, literary or educational interests of its members, or for the promotion or control of horse, pony or harness racing in Victoria.

How does our organisation get the exemption or concession?

If you believe that your community organisation may be eligible for a land tax exemption or a concessional rate, you should contact the State Revenue Office. If your organisation has received a land tax assessment notice and believes it is entitled to an exemption from the tax or a concessional rate, you need to formally object to the assessment notice (on the basis that you believe the land assessed is exempt). Your organisation must object to a land tax assessment notice within 60 days from which the assessment notice was served.

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Other taxes

Duties, payroll and land tax are three of the main taxes that the Victorian government levies. There may be other state taxes that apply to not-for-profit community organisations (such as the congestion levy, which is a tax on car parking spaces in a certain area in Melbourne).

To find out more about state taxes and whether your organisation may be eligible for any exemptions or concessions, go to the State Revenue Office website which has been listed in the Resources section below.

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Resources

State Revenue Office (SRO) resources

Duties (stamp duty)

Payroll Tax

Land Tax

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