Building a Better Victoria (State Tax and Other Legislation Amendment) Bill

2014

Introduction Print

EXPLANATORY MEMORANDUM

General

The Bill amends the Duties Act 2000 to—

abolish duty on life insurance;

provide for the duty treatment of insurance riders;

extend the requirement to be a registered insurer to include certain insurers who are registered under the Life Insurance Act 1995 of the Commonwealth;

increase the rate of duty on the application for registration or transfer of a motor vehicle by $0.40 per $200 from 1 July 2014.

The Bill amends the First Home Owner Grant Act 2000 to permit the disclosure of protected information to additional persons for specified purposes.

The Bill amends the Land Tax Act 2005 to—

make amendments in relation to the determination of the taxable value of land to reflect changes to the valuation of non-rateable leviable land as a result of the introduction of the fire services property levy, to permit use of valuations conducted in respect of taxable land that is non-rateable leviable land to assess land tax;

address minor technical and administrative issues identified in respect of land held on trust and primary production land;

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bring the definition of greater Melbourne into line with the urban growth boundary under the Planning and Environment Act 1987 for the purposes of the primary production land exemption;

remove the requirement for a person to give notice of the acquisition of land in writing to the Registrar of Titles where the land transfer is conducted using an electronic lodgement network.

The Bill amends the Payroll Tax Act 2007 to reduce the rate of payroll tax from 4·90% to 4·85% with effect from 1 July 2014.

The Bill amends the Planning and Environment Act 1987 to impose a levy for the privilege of making certain planning permit applications.

The Bill amends the Road Safety Act 1986 to increase the fee payable for registration or renewal of registration of a motor vehicle or trailer.

The Bill amends the Taxation Administration Act 1997 to—

permit the disclosure of information obtained under or in relation to the administration of a taxation law in connection with the administration of the First Home Owner Grant in another Australian jurisdiction;

permit the disclosure of information obtained under or in relation to the administration of a taxation law to additional persons for specified purposes.

Clause Notes

PART 1—PRELIMINARY

Part 1 of the Bill outlines the purposes of the Bill and contains the commencement provisions.

Clause 1 outlines the purposes of the Bill.

Clause 2 provides the commencement dates for the Bill.

The Act (except Part 2, section 18, and Division 4 of Part 4 and Parts 6 and 7) comes into operation on the day after the Act receives Royal Assent.

Part 2 comes into operation on 1 July 2014 to give effect to an increase in motor vehicle duty and abolish life insurance duty, as announced in the 2014–15 Budget.

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Section 18 operates retrospectively from 12 December 2007, to coincide with the date that provisions dealing with administration trusts were inserted into the Land Tax Act 2005 by the State Taxation and Accident Compensation Acts Amendment Act 2007. This section has been made retrospective to support the current administrative practice of assessing land held under an administration trust as if the land were the only land owned by the trustee of that trust. This ensures that land held under an administration trust is assessed separately from other land held by the trustee for another trust or in their own right, as technically required by the Land Tax Act 2005.

Division 4 of Part 4 comes into operation on a day to be proclaimed or 1 December 2014, whichever is earlier. This will ensure that the exemption from the requirement for a person to give notice of the acquisition of land in respect of land transfers effected electronically is not introduced until the national electronic lodgement network commences for land transfers in late 2014.

Part 6 comes into operation on 1 July 2015, to impose the Metropolitan Planning Levy for the privilege of making a leviable planning permit application.

Part 7 comes into operation on 1 July 2014 to give effect to an increase in the fee payable for registration or renewal of registration of a motor vehicle or trailer, as announced in the 2014–15 Budget.

PART 2—DUTIES ACT 2000

Part 2 of the Bill makes amendments to Chapter 8 of the Duties Act 2000 to abolish duty on life insurance, to provide that life insurance policy riders are taken to be general insurance for duty charging purposes, to provide that certain insurers registered under the Life Insurance Act 1995 of the Commonwealth must be registered for duty payment purposes, and to make consequential amendments on the abolition of duty on life insurance. Part 2 of the Bill also makes amendments to Chapter 9 of the Duties Act 2000 to increase the rate of duty on the application for registration or application for transfer of registration of a motor vehicle. These measures are included in the 2014–15 Budget.

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Division 1—Insurance Duty

Clause 3 inserts a definition of insurer in section 3 of the Duties Act 2000 to replace the definitions of general insurer and life insurer, which are repealed by this clause. When life insurance duty is abolished from 1 July 2014, there will no longer be a need to distinguish between a general insurer and a life insurer.

The definition of life insurance is amended to refer to a new section 196A which is inserted by clause 7 of the Bill to replicate the current section 198 of the Duties Act 2000. Section 198 of the Duties Act 2000 is to be repealed together with the other sections on life insurance under Part 3 of Chapter 8 of the Duties Act 2000.

Clause 4 Clause 4 makes various amendments to Chapter 8 of the Duties Act 2000 which are required to give effect to the abolition of duty on life insurance policies.

Section 175 provides for the charging of duty on certain types of insurance. Subclause (1)(a) repeals section 175(4) of the Duties Act 2000, which provided that Part 4 of Chapter 8 of the Duties Act 2000 charged duty on policies of life insurance.

Subclause (1)(b) inserts a note at the foot of section 176(2) of the Duties Act 2000. The note is intended to alert the reader that general insurance includes life insurance policy riders as defined in the new section 196B which is inserted by clause 7 of the Bill.

Subclause (1)(c) omits the reference to "life insurance" in section 176(3), which describes matters which are not included in the definition of general insurance. This reference is no longer necessary as life insurance is exempted from duty under section 196(g) which is inserted by clause 6(k) of the Bill.

As life insurance duty is abolished there is no longer a need to distinguish between general insurers and life insurers in Chapter 8 of the Duties Act 2000. Accordingly subclause (1)(d), and subclauses (2), (3) and (4) omit the references to "general insurer" where occurring in sections 180, 183(1), 183(3), 183(4) and 183(5) of the Duties Act 2000 and in the heading to Division 2 of Part 2 of Chapter 8 and replaces them with a reference to "insurer".

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Clause 5 replaces the existing definition of general insurer in section 184 of the Duties Act 2000 with a new section 184 that defines an insurer as a person who writes general insurance, who does so otherwise than as an insurance intermediary and who is authorised under the Insurance Act 1973 of the Commonwealth to carry on insurance business or who is registered under the Life Insurance Act 1995 of the Commonwealth.

This definition includes insurers registered under the Life Insurance Act 1995 of the Commonwealth, as it is intended to include all types of insurers that write general insurance, including life insurers.

Clause 6 omits the references to "general insurer" where occurring in the heading to section 185, section 185, section 186, section 187(1), the heading to sections 188 and 189, section 189(1), and section 194(2) of the Duties Act 2000 and substitutes them for references to "insurer".

Paragraph (d) amends section 187(1)(a) of the Duties Act 2000 to enable the Commissioner to cancel the registration of an insurer under Part 2 of Chapter 8 of the Duties Act 2000 if the insurer's registration under the Life Insurance Act 1995 of the Commonwealth is cancelled. This amendment is required because insurers registered under the Life Insurance Act 1995 of the Commonwealth are included in the new definition of insurer inserted by clause 5 of the Bill.

Paragraph (i) removes the reference to "life insurance" from section 195(1) of the Duties Act 2000, which provides for the application of Division 4 of Part 2 of Chapter 8 to apportionment of premiums and other amounts between different types of insurance.

Paragraph (k) inserts new paragraph (h) in section 196 of the Duties Act 2000 to make it clear that life insurance is no longer chargeable with duty.

Clause 7 inserts a new section 196A in the Duties Act 2000 which defines life insurance as any insurance in respect of a life or lives, or an event or contingency relating to or depending on a life or lives of a person who is, or persons who are, domiciled in Victoria at the time the policy is issued but does not include insurance against accident. Insurance against accident is defined under section 196A(2) of the Duties Act 2000.

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The new definition of life insurance largely replicates the existing definition in section 198 of the Duties Act 2000, which is repealed by clause 8 of the Bill. However, the new section 196A of the Duties Act 2000 is required to be read subject to the new section 196B of the Duties Act 2000, which makes provision for "life insurance policy riders" to be treated as general insurance and not life insurance.

The new section 196B(1) provides that section 196B does not apply to a policy of life insurance unless the insured person is or the insured persons are domiciled in Victoria.

The new section 196B(2) provides that if a policy of life insurance (as defined in the new section 196A), also provides for the payment of a benefit on the occurrence of a contingency or event that does not relate to or depend on a life or lives (that is, the additional insurance), then the additional insurance is taken to be general insurance and not life insurance.

The new section 196B(3) provides that section 196B(2) applies whether or not the life insurance and the additional insurance are separate or distinct matters, and whether or not payment of a benefit under the additional insurance component of the policy will or may reduce the benefit payable under the life insurance component of the policy, or will or may terminate the policy.

The new section 196B(4) provides that the Commissioner may determine the amount or proportion of the premium attributable to the additional insurance for the purposes of calculating the duty payable if there is no separately identifiable part of the premium payable in respect of the policy attributable to the additional insurance or, in the Commissioner's opinion, the identified part of the premium attributable to the additional insurance does not appear to correctly reflect the additional insurance.

Clause 8 repeals Part 3 of Chapter 8 of the Duties Act 2000. Part 3 provided for duty on life insurance.

Clause 9 inserts new clause 32 in Schedule 2 to the Duties Act to provide transitional arrangements for the registration of general insurers and life insurers associated with the abolition of duty on life insurance. This provision is intended to ensure that any general insurer or life insurer who is currently registered under Chapter 8

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of the Duties Act 2000 does not need to re-register as a result of these amendments.

Division 2—Motor vehicle duty

Clause 10 substitutes the existing rates of duty on an application for registration or a transfer of registration of a motor vehicle in section 218(1)(a), (ab) and (b) of the Duties Act 2000 to reflect an increase in the rate by $0.40 per $200, or part, of the dutiable value of the motor vehicle. This increase was announced in the 2014–15 Budget.

PART 3—FIRST HOME OWNER GRANT ACT 2000

Part 3 of the Bill amends the First Home Owner Grant Act 2000 to permit the disclosure of protected information to certain persons for specified purposes.

Clause 11 inserts definitions of Australia's Foreign Investment Policy, Chief Executive Centrelink, Child Support Registrar and IBAC Commissioner in section 3(1) of the First Home Owner Grant Act 2000. These definitions support the amendment to section 50 of the First Home Owner Grant Act 2000 by clause 12 of the Bill, which permits the disclosure of protected information to additional persons for specified purposes.

Clause 12 amends section 50(4) of the First Home Owner Grant Act 2000 which permits certain persons to disclose information about an applicant, or an applicant's partner, for a first home owner grant obtained under or in relation to the administration of that Act. This information is referred to as protected information under the First Home Owner Grant Act 2000.

Clause 12 inserts a new paragraph (cb) in section 50(4) to permit the disclosure of protected information to the following persons—

the Chief Executive Centrelink for the purposes of administering the social security law within the meaning of the Social Security Act 1991 of the Commonwealth or any regulations made under that law;

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the Child Support Registrar for the purposes of administering the Child Support (Registration and Collection) Act 1988 of the Commonwealth or the Child Support (Assessment) Act 1989 of the Commonwealth or any regulations made under those Acts;

the Commonwealth Treasurer in relation to a decision that the Commonwealth Treasurer may make under the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth or any regulations made under that Act or in accordance with Australia's Foreign Investment Policy;

a member of the Foreign Investment Review Board or the Secretary of the Department of the Treasury of the Commonwealth for the purposes of briefing the Commonwealth Treasurer in relation to a decision that the Commonwealth Treasurer may make under the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth or any regulations made under that Act or in accordance with Australia's Foreign Investment Policy;

the IBAC Commissioner for the purposes of administering the Independent Broad-based Anti-corruption Commission Act 2011 or any regulations made under that Act.

Each of these additional persons has regulatory and enforcement functions, which have been established to protect the public interest. This amendment is intended to ensure that the Commissioner of State Revenue can lawfully disclose protected information to support these functions.

PART 4—LAND TAX ACT 2005

Part 4 of the Bill amends the Land Tax Act 2005 to permit the use of valuations conducted in respect of taxable land that is non-rateable leviable land to assess land tax, address minor technical and administrative issues identified in respect of land held on trust and primary production land, bring the definition of greater Melbourne into line with the urban growth boundary, and remove the requirement for a person to lodge a notice of acquisition in writing to the Registrar of Titles where a land transfer is effected using the electronic lodgement network.

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Division 1—Relevant day for taxable value of land

Clause 13 amends section 3(1) of the Land Tax Act 2005 to insert definitions of Council, municipal district, non-rateable leviable land, and rateable land, and amends the definition of supplementary valuation so that it includes the supplementary valuation of both rateable land and non-rateable leviable land. The relevant definitions support amendments to sections 19 and 21 of the Land Tax Act 2005 by clauses 14 and 15 of the Bill, which are required as a result of changes made to the Valuation of Land Act 1960 on the introduction of the fire services property levy.

Clause 14 substitutes section 19(2) and (5) of the Land Tax Act 2005. Land tax is assessed on the taxable value of land. The taxable value of land for a tax year is the site value of the land as at the relevant date.

When the fire services property levy was introduced from 1 July 2014, the Valuation of Land Act 1960 was amended to require valuation authorities to value non-rateable leviable land in addition to rateable land. These changes were necessary because the fire services property levy applies to all land in Victoria regardless of whether it is subject to council rates. To reflect these changes, clause 14 substitutes section 19(2) and (3) of the Land Tax Act 2005 to provide a relevant date for both rateable land and non-rateable leviable land valued by a valuation authority, as follows—

the date at which the land was valued for the purposes of the last general valuation returned to the valuation authority before 1 January in the land tax year; or

the return date of any supplementary valuation conducted after the general valuation, but before 1 January in a land tax year.

The relevant date for any other land is 31 December in the year immediately preceding the land tax year. This includes taxable land that is exempt from the fire services property levy, such as roads and certain transport infrastructure.

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Clause 15 amends section 21(1)(a) of the Land Tax Act 2005. Currently section 21(1)(a) provides that the Commissioner of State Revenue may use valuations made by a valuation authority within the meaning of the Land Tax Act 2005 for the purposes of assessing land tax. Clause 15 omits the reference to the Valuation of Land Act 1960. This reference is not required because the term valuation authority is defined in section 3(1) of the Land Tax Act 2005 by reference to the Valuation of Land Act 1960.

Division 2—Land held on trust

Clause 16 substitutes section 46B(2) and (3) of the Land Tax Act 2005 with new section 46B(2), (3) and (3A). Under section 46B of the Land Tax Act 2005, a trustee of a fixed trust may avoid the land tax surcharge by notifying the Commissioner of State Revenue of the beneficial interests in the land. When a notification of beneficial interests in the land is lodged, the beneficiary is deemed to be the owner and assessed for land tax at the general rate on their proportional interest in the trust land, together with any taxable land that they own.

Currently, section 46B of the Land Tax Act 2005 does not permit a trustee to lodge a notification of beneficial interests outside the period prescribed by the Act. However, in practice the Commissioner of State Revenue permits a trustee to lodge a notification of beneficial interests at any time, but only applies the notification from the land tax year following the year in which the notification is lodged.

To give effect to this administrative practice and specify the land tax year from which the beneficial notification applies, clause 16 substitutes section 46B(2) and (3) for a new section 46B(2) and (3) to provide—

a notice must be in the form and contain the information determined by the Commissioner; and

a notice takes effect for the tax year following the year in which the notice is lodged and remains in force until it is withdrawn by the trustee.

Therefore, if a trustee of a fixed trust lodges a notification of beneficial interests in the land in 2014 that notification will apply from the 2015 land tax year and both the trustee and beneficiary

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will be subject to land tax at the general rate in the 2015 and future tax years.

A notification of beneficial interests will apply until it is withdrawn by the trustee. However, section 46B of the Land Tax Act 2005 does not currently prevent a trustee from withdrawing a notification and then lodging a fresh notification in respect of the same fixed trust.

The land tax trust surcharge was introduced to discourage people from disaggregating their landholdings by using trust structures to reduce land tax. However, the land tax surcharge rate does not apply where a trustee's landholdings exceed $3 million. Therefore, a trustee can currently minimise the amount of land tax paid by withdrawing a notification when landholdings exceed $3 million, and then lodging a fresh notification when the trustees' landholdings fall below $3 million, thereby avoiding the application of the land tax surcharge. The capacity to opt in and out of the land tax surcharge through the notification process, is inconsistent with the intent of the land tax surcharge regime, and provides an unfair advantage to trustees with high value landholdings. To address this issue, clause 16 inserts a new section 46B(3A), which provides that if a trustee withdraws a notification of beneficial interests, they cannot lodge another notice in respect of that fixed trust.

Clause 17 substitutes section 46C(2) and (3) of the Land Tax Act 2005 with new section 46C(2), (3) and (3A). Under section 46C of the Land Tax Act 2005, a trustee of a unit trust scheme may avoid the land tax surcharge by notifying the Commissioner of State Revenue of the unitholdings in the scheme. When a written notice is lodged, the unitholder is then deemed to be the owner and assessed for land tax at the general rate on their proportional interest in the trust land, together with any taxable land that they own.

Clause 17 amends section 46C of the Land Tax Act 2005 to provide—

a notice must be in the form, and contain the information determined by the Commissioner;

a notice takes effect for the tax year following the year in which the notice is lodged and remains in force until it is withdrawn by the trustee;

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if a trustee withdraws a notice that is in force in respect of a unit trust scheme, the trustee cannot lodge another notice in respect of that unit trust scheme.

These changes mirror the amendments to section 46B of the Land Tax Act 2005 in relation to the notification of beneficial interests in the land by a fixed trust made by clause 16 of the Bill.

Clause 18 amends section 46E of the Land Tax Act 2005 to provide that a trustee of an administration trust is to be assessed for land tax separately from any other land held by the trustee for a different trust or in a different capacity. This ensures that land held under an administration trust is not aggregated with the trustee's other landholdings, which may otherwise increase the amount of land tax payable on that land.

This provision was inadvertently omitted when the administration trust provisions were enacted on 12 December 2007. As it has always been the administrative practice of the Commissioner of State Revenue to assess land held under an administration trust separately from land held by the trustee for a different trust or in a different capacity, the operation of this amendment is made retrospective from 12 December 2007 by clause 2 of the Bill.

Clause 19 amends section 46F(8)(b) of the Land Tax Act 2005. Under section 46F a trustee of discretionary trust of which the trust property includes pre-2006 land may nominate a person to be the nominated beneficiary. Section 46F(6) and (7) allows a new nomination to be lodged in specific circumstances. Section 46F(8)(b) provides that a nomination lodged under section 46F(6) or (7) takes effect for the tax year in respect of which the nomination is lodged. To specify the time from which a new nomination takes effect, clause 19 amends section 46F(8)(b) to expressly provide that a nomination takes effect for the tax year following the tax year in which the nomination is lodged.

For example, if a new nomination is lodged in 2014 under section 46F(6) or (7), it will take effect from the 2015 tax year.

Clause 20 amends section 46H(4) and (6) of the Land Tax Act 2005. Under section 46H a trustee of a unit trust scheme or a discretionary trust may nominate a person to be the nominated Principle Place of Residence (PPR) beneficiary of the scheme or

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trust. Where a nomination is lodged, the trustee will be assessed for land tax at the general rate rather than at the surcharge rate.

Currently section 46H(4)(a) provides that a nomination takes effect for the tax year in respect of which the nomination is lodged. To specify the time from which a nomination takes effect, clause 20 amends section 46H(4)(a) to expressly provide that a nomination takes effect for the tax year in which the nomination is lodged.

For example, if a PPR nomination is lodged in 2014, it will take effect in the 2014 tax year. The land is assessed for land tax in 2014 at the general rate on a single holding basis provided that the nominated PPR beneficiary used and occupied the land as their PPR in 2013.

Clause 21 amends section 46K(1) and inserts new section 46K(5B) in the Land Tax Act 2005. Section 46K requires trustees to notify the Commissioner of State Revenue of all Victorian land they hold on trust.

Subclause (1) amends section 46K(1) to specify that the notification requirements apply both when the trustee first acquires land in Victoria as a trustee, and when a person who is a trustee of land in Victoria acquires further land as a trustee.

Subclause (2) inserts a new section 46K(5B), which provides that the trustee of a discretionary trust or unit trust scheme must lodge a written notice to the Commissioner of State Revenue within one month of a PPR beneficiary that has been nominated under section 46H of the Land Tax Act 2005 ceasing to use and occupy the land as their PPR. This new requirement will help to ensure that the Commissioner of State Revenue has the information required to assess discretionary trusts and unit trust schemes at the correct land tax rate.

Division 3—Primary production land

Clause 22 amends section 64 of the Land Tax Act 2005. The Land Tax Act 2005 provides an exemption from land tax for land used for primary production. There are different eligibility requirements for the primary production land (PPL) exemption depending on whether the land is located inside or outside greater Melbourne. The current definition of greater Melbourne is defined by reference to the metropolitan area within the Melbourne and

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Metropolitan Board of Works Act 1958. This definition is difficult to apply because it refers to administrative boundaries that are no longer in use, such as old council boundaries.

This clause also inserts definitions of the terms planning scheme and urban growth boundary, and substitutes the definition of greater Melbourne in section 64 of the Land Tax Act 2005. These definitions will align the definition of greater Melbourne for the purposes of the PPL exemption with the urban growth boundary. The urban growth boundary is defined in the Planning and Environment Act 1987, which will make the PPL exemption easier to apply and bring the land tax definition of greater Melbourne into line with the current long term limits of urban development that are set out in Victoria's planning laws.

This clause also repeals section 64(3), (4) and (5), in relation to the power of the Governor in Council to make an Order declaring an area to be the metropolitan area within the meaning of section 201 of the Melbourne and Metropolitan Board of Works Act 1958, for the purposes of the definition of greater Melbourne in section 64(1). As the definition of greater Melbourne is amended by clause 22 to align with the urban growth boundary, the power to make an Order for that purpose is now redundant.

Clause 23 amends section 65(2) of the Land Tax Act 2005. Section 65 of the Land Tax Act 2005 provides that land outside greater Melbourne that is used primarily for primary production is exempt from land tax. Where part of the land is used primarily for primary production purposes, section 65(2) of the Land Tax Act 2005 treats that part of the land as exempt even if a business other than the business of primary production is carried on on any other part of the land.

Clause 23 makes a technical amendment to section 65(2) to remove the reference to "a business other than the business of" to provide that the PPL exemption can be apportioned, to the extent of the primary production and non-primary production activities that are carried on on that land.

Clause 24 substitutes section 70 of the Land Tax Act 2005. The existing section 70 allows a part of a parcel of land to be regarded as a separate parcel of land for the purposes of applying the PPL exemption to land in greater Melbourne under sections 66 and 67 of the Land Tax Act 2005. To qualify as a separate parcel of

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land, the part must be occupied separately from or be obviously adapted to being occupied separately from other land in the parcel, and the owner of that parcel must be carrying on the business of primary production on that land.

Under section 66 of the Land Tax Act 2005 land that is in greater Melbourne and not in an urban zone is eligible for the PPL exemption if the land is used primarily for primary production. Under section 67 of the Land Tax Act 2005 land that is in greater Melbourne and in an urban zone is eligible for the PPL exemption if the land is used primarily for the business of primary production and the owner of the land is substantially involved in the business of primary production of the type carried on on the land. Therefore, the PPL exemption requirements under section 67 of the Land Tax Act 2005 are more stringent because they also require the owner of the land to be carrying on the business of primary production. This stricter requirement is only intended to apply to land that is in greater Melbourne and zoned urban.

Clause 24 amends section 70 of the Land Tax Act 2005 to ensure that the eligibility requirements for treating the land as a separate parcel are consistent with the respective eligibility requirements for PPL exemption under section 66 or section 67. Accordingly, for the purposes of section 66, part of a parcel of land will be regarded as a separate parcel if it is occupied separately or obviously adapted to being occupied separately and is used primarily for primary production. In contrast, for the purposes of section 67, part of a parcel of land will be regarded as a separate parcel if it is occupied separately or obviously adapted to being occupied separately and the owner of the parcel of land is the owner of the land within the meaning of section 67(2) of the Land Tax Act 2005.

Clause 25 inserts new Schedule 2 to the Land Tax Act 2005. The amended definition of greater Melbourne inserted by clause 22 of the Bill provides that greater Melbourne means the aggregate area consisting of—

the area within the municipal district of each Council listed in Part 1 of Schedule 2; and

the area within an urban growth boundary specified in a planning scheme that is in force in the municipal district of each Council listed in Part 2 of Schedule 2.

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New Schedule 2 to the Land Tax Act 2005 lists the Councils referred to in the amended definition of greater Melbourne.

Clause 26 inserts a new clause 15 in Schedule 3 to the Land Tax Act 2005, which provides transitional arrangements required as a result of the amended definition of greater Melbourne inserted by clause 22 of the Bill. Land inside greater Melbourne and in an urban zone qualifies for the PPL exemption if the land is used by the owner for the business of primary production. In contrast, land outside greater Melbourne qualifies for the PPL exemption if it is used primarily for primary production. As a result of the amended definition of greater Melbourne, some lands that were outside greater Melbourne under the previous definition will come within greater Melbourne under the amended definition.

These transitional arrangements are intended to grandfather the operation of the PPL exemption by ensuring that land that was outside greater Melbourne and will fall within greater Melbourne as amended, continues to be eligible for the exemption based on the less stringent eligibility criteria, until particular trigger events occur.

New clause 15(1) provides that grandfathered land that is exempt under section 65 and 68 (that is, land that is outside greater Melbourne that is used, or being prepared for use, primarily for primary production) does not cease to be exempt only because it is no longer outside greater Melbourne. For these purposes, grandfathered land is land or part of land that was outside greater Melbourne on the day the Bill was second read in the Legislative Assembly, but which is brought into the greater Melbourne on the enactment of the amended definition of greater Melbourne inserted by clause 22 of the Bill. The term grandfathered land is defined in new clause 15(4).

New clause 15(2) provides that the grandfathered operation of the PPL exemption will not apply, or will cease to apply, if any one of the following trigger events occurs—

the grandfathered land is subdivided;

the grandfathered land is disposed of;

the owner of the grandfathered land acquires other land located wholly or partly within the new greater Melbourne area, which is contiguous with the grandfathered land or separated from the grandfathered

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land only by a road, railway or other similar area across or around which movement is reasonably possible.

To limit the potential for grandfathering to be taken advantage of, any trigger event that occurs after the day after the Bill became public on its second reading will result in grandfathering ceasing and the land becoming subject to the more stringent PPL eligibility requirements that apply within greater Melbourne and in an urban zone.

New clause 15(3) provides that, for the purposes of new clause 15(2), land is not disposed of or acquired if ownership of it vests in a joint tenant on the death of another joint tenant. In these circumstances, the land will continue to benefit from grandfathering, until such time as one of the other trigger events occurs.

New clause 15(4) inserts definitions of acquire, amending Act, commencement day, dispose of, grandfathered land, and relevant day. These definitions support the operation of the transitional arrangements.

Division 4—Notice of acquisition of land

Clause 27 inserts definitions of electronic instrument, ELN, land titles legislation, and registry instrument in section 3(1) of the Land Tax Act 2005. These definitions support amendments to section 103 of the Land Tax Act 2005 made by clause 28 of the Bill. These amendments are required as a result of the introduction of a national electronic lodgement network, which is scheduled to commence for land transfers in Victoria in late 2014.

Clause 28 inserts new subsection (4) in section 103 of the Land Tax Act 2005. Section 103 of the Land Tax Act 2005 requires a person who acquires land to lodge a notice of acquisition in writing with the Registrar of Titles. The Registrar provides this information to the Commissioner of State Revenue who uses it to maintain a database in order to administer land tax.

When the electronic lodgement network for land transfers becomes operational in Victoria, the Commissioner of State Revenue will have access to this information electronically via the electronic lodgement network. Therefore, clause 28 inserts a new section 103(4) to remove the requirement to lodge a notice

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of acquisition in writing with the Registrar of titles where a person acquires land in a manner which was effected by an electronic instrument lodged by means of an electronic lodgement network. The requirement to lodge a notice of acquisition in writing to the Registrar has been retained to accommodate transfers, which are not lodged through the electronic network.

PART 5—PAYROLL TAX ACT 2007

Part 5 of the Bill amends the rate of payroll tax under the Payroll Tax Act 2007. This measure is included in the 2014–15 Budget.

Clause 29 amends Schedules 1 and 2 to the Payroll Tax Act 2007. Subclause (1) amends clause 1 of Schedule 1, which sets out the definitions used for the purposes of calculating payroll tax, to reflect the new rate of payroll tax of 4·85% from 1 July 2014.

Subclause (2) amends clause 2 of Schedule 2 to reflect a reduction in the rate of payroll tax rate from 1 July 2014 from 4·90% to 4·85%.

PART 6—PLANNING AND ENVIRONMENT ACT 1987

Part 6 of the Bill amends the Planning and Environment Act 1987 to impose a levy for the privilege of making certain planning permit applications.

Clause 30 inserts definitions of Commissioner, consumer price index, leviable planning permit application, levy certificate and metropolitan Melbourne in section 3(1) of the Planning and Environment Act 1987. The definitions of Commissioner and consumer price index replace the definitions in section 201R of the Planning and Environment Act 1987 which are repealed by clause 36 of the Bill.

Clause 31 amends section 47 of the Planning and Environment Act 1987. Subclause (1) inserts new paragraph (ab) in section 47(1) of the Planning and Environment Act 1987 to provide that an application for a permit made under section 47, must state the estimated cost of the development for which the permit is required, if the permit is required to undertake development. This requirement is currently found in regulation 15(e) of the Planning and Environment Regulations 2005.

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Subclause (2) inserts new subsections (1A) and (1B) in section 47 of the Planning and Environment Act 1987. New subsection (1A) provides that if an application made under section 47 of the Planning and Environment Act 1987 is a leviable planning permit application, the applicant must, at the same time as making the application, give the responsible authority a current levy certificate in respect of the development for which the permit is required that states an estimated cost of the development that is equal to or greater than the estimated cost of the development stated in the application. New subsection (1B) provides that if the applicant fails to comply with subsection (1A), the application is void. The provisions that provide for the issuing of a levy certificate are inserted by clause 35 of the Bill.

Clause 32 inserts new subsection (1A) in section 73 of the Planning and Environment Act 1987 to provide that section 47(1)(ab), (1A) and (1B) do not apply to an application to the responsible authority to amend a permit.

Clause 33 amends section 96(4) of the Planning and Environment Act 1987 to provide that the new Division 5A (inserted by clause 35 of the Bill) applies to an application for a permit under section 96.

Clause 34 amends section 96A of the Planning and Environment Act 1987. Subclause (1) inserts new paragraph (aa) in section 96A(4) of the Planning and Environment Act 1987 to provide that an application for a permit made under section 96A must state the estimated cost of the development for which the permit is required, if the permit is required to undertake development.

Subclause (2) inserts new subsections (4A) and (4B) in section 96A of the Planning and Environment Act 1987. New subsection (4A) provides that if the application for the permit made under section 96A of the Planning and Environment Act 1987 is a leviable planning permit application, the applicant must, at the same time as making the application, give the planning authority a current levy certificate in respect of the development for which the permit is required that states an estimated cost of the development that is equal to or greater than the estimated cost of the development stated in the application. New subsection (4B) provides that if the applicant fails to

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comply with new subsection (4A), the application for the permit is void.

Clause 35 inserts a new Division 5A—Metropolitan Planning Levy—in Part 4 of the Planning and Environment Act 1987. New Division 5A provides for the imposition and administration of a new levy, known as the Metropolitan Planning Levy, and includes new sections 96O to 96Z.

New section 96O provides that—

the new Division 5A imposes a levy, known as the Metropolitan Planning Levy, for the privilege of making a leviable planning permit application; and

the levy is payable by the person who intends to make the application.

New section 96P defines a leviable planning permit application as an application under section 47 or 96A of the Planning and Environment Act 1987 for a permit required for the development of land in metropolitan Melbourne if the estimated cost of the development for which the permit is required exceeds $1 million.

New section 96Q provides the method for calculating the amount of the levy. New section 96Q(1) provides that the amount of levy is—

in the financial year beginning on 1 July 2015, $1.30 for every $1000 of the estimated cost of the development for which the permit is required; and

in the financial year beginning on 1 July 2016 and each subsequent financial year, the CPI adjusted amount for that financial year for every $1000 of the estimated cost of the development for which the permit is required.

New section 96Q(2) provides that, for the purposes of subsection (1), if the estimated cost of the development for which the permit is required is not a multiple of $1000, the estimated cost is to be rounded up or down to the nearest $1000 (and, if the amount by which it is to be rounded is $500, is to be rounded up).

New section 96R provides for the determination and publishing of the CPI adjusted amount. New section 96R(1) provides that the CPI adjusted amount for a financial year is to be determined

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in accordance with the formula set out in that subsection. New section 96R(2) provides that the Commissioner must publish the CPI adjusted amount for a financial year on an appropriate website on or before 31 May in the previous financial year. New section 96R(3) provides that a failure to comply with new section 96R(2) in respect of a financial year does not affect the operation of section 96Q and section 96R in respect of a levy payable in that year.

New section 96S provides for the notification and payment of the levy. New section 96S(1) provides that a person who intends to make a leviable planning permit application must, before making it—

give notice to the Commissioner; and

pay the amount of the levy for the application to the Commissioner.

New section 96S(2) provides that the notice under new section 96S(1) must—

be in the form approved by the Commissioner; and

state the estimated cost of the development; and

contain the information required by the Commissioner.

New section 96T provides for the issuing of a levy certificate by the Commissioner. New section 96T(1) provides that if a person pays the levy and the Commissioner is satisfied that the whole of the amount of the levy has been paid in respect of the estimated cost of the development, the Commissioner must issue a certificate to that person. New section 96T(2) provides that a levy certificate must include the following information—

the estimated cost of the development;

the amount of the levy paid;

a statement that the whole of the amount of the levy has been paid in respect of the estimated cost of the development;

the date on which the certificate was issued;

the date on which the certificate will expire;

the name and address of the person who paid the levy;

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any other information the Commissioner considers appropriate.

New section 96T(3) provides that a levy certificate expires 90 days after the day on which it is issued.

New section 96U provides that the Commissioner must issue a revised levy certificate in specified circumstances. New section 96U(1) provides that subsection (2) applies if—

the Commissioner has issued a certificate under section 96T in respect of a leviable planning permit application; and

the estimated cost of the development increases before the application is made; and

the certificate has not expired.

New section 96U(2) provides that if a person pays any additional levy and the Commissioner is satisfied that the whole of the amount of the levy has been paid in respect of the increased estimated cost of the development, the Commissioner must issue a revised certificate to that person. New section 96U(3) provides that the Commissioner may also issue a revised certificate—

to correct any error in the information included in the certificate under section 96T(2)(b), (d), (e), (f) or (g); or

if the estimated cost of the development stated in the certificate is different from the estimated cost of the development stated in the notice given under section 96S(1)(a).

New section 96U(4) provides that a revised certificate expires 90 days after the day on which it is issued.

New section 96V provides that the levy will not be refunded except in the case of a mathematical error. New section 96V(1) provides that a person who has paid a levy under the new Division 5A is not entitled to a refund of the whole or any part of the levy except where there has been a mathematical error in calculating the amount of the levy by reference to the estimated cost of the development stated in the notice given to the Commissioner under section 96S(1)(a). New section 96V(2) provides that, without limiting subsection (1), a person who has paid a levy under Division 5A is not entitled to a refund of the whole or any part of the levy—

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if the estimated cost of the development decreases after the levy is paid; or

if the permit application to which the levy relates is not subsequently made, lapses or is refused or withdrawn; or

if the permit application to which the levy relates is granted and the permit is subsequently cancelled.

New section 96V(3) provides that any refund under new section 96V(1) is to be paid from the Consolidated Fund which is appropriated by this section to the necessary extent.

New section 96W sets out the Commissioner's powers and functions in respect of the administration of the new Division 5A. New section 96W(1) provides that the Commissioner has the general administration of, and may do all things that are necessary or convenient to give effect to, the new Division 5A. New section 96W(2) provides that for the purpose of performing a function under the new Division 5A, the Commissioner may request in writing a responsible authority or planning authority to provide the Commissioner with any information relating to an application made to the authority for a permit under section 47 or 96A of the Planning and Environment Act 1987 (as the case requires) or relating to any permit granted on such an application. New section 96W(3) provides that a responsible authority or planning authority must as soon as practicable provide the Commissioner with the information requested under new section 96W(2).

New section 96X prohibits certain disclosures of information by Commissioner and other specified persons. New section 96X(1) provides that it is an offence for a person who is or was the Commissioner or another person engaged in the administration of the new Division 5A to disclose any information obtained under, or in relation to the administration of, that Division, except as permitted by that Division. A maximum penalty of 60 penalty units is provided for. New section 96X(2) provides that, for the purposes of the Freedom of Information Act 1982, information referred to in new section 96X(1) is information of a kind to which section 38 of that Act applies.

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New section 96Y provides that a person who is or was the Commissioner or another person engaged in the administration of the new Division 5A may disclose information obtained under, or in relation to the administration of, that Division—

with the consent of the person to whom the information relates or at the request of a person acting on behalf of that person; or

in connection with the administration of that Division; or

in accordance with a requirement imposed under an Act; or

to an authorised recipient, being—

the Secretary to the Department of Treasury and Finance; or

the Secretary to the Department of Transport, Planning and Local Infrastructure; or

a relevant responsible authority; or

a relevant planning authority; or

a person prescribed to be an authorised recipient for the purposes of that section; or

if the information will not, or is not likely to, identify a particular person.

New section 96Z provides that a responsible authority or a planning authority must keep each levy certificate given to it under section 47 or 96A of the Planning and Environment Act 1987 for not less than 5 years after the levy certificate is given to it.

Clause 36 repeals the definitions of consumer price index and Commissioner in section 201R of the Planning and Environment Act 1987. Definitions for consumer price index and Commissioner are inserted in section 3(1) of the Planning and Environment Act 1987 by clause 30 of the Bill.

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Clause 37 inserts new Schedule 2 in the Planning and Environment Act 1987 that lists the municipal districts for the purpose of the new definition of metropolitan Melbourne inserted in section 3(1) of that Act by clause 30 of the Bill. Subclause (1) inserts a new heading, "Schedules", before Schedule 1. Subclause (2) inserts the new Schedule 2 with the heading "Metropolitan Melbourne". The new Schedule 2 lists 31 municipal councils.

PART 7—ROAD SAFETY ACT 1986

Part 7 amends the Road Safety Act 1986 to increase the fee payable for registration or renewal of registration of a motor vehicle or trailer. This measure is included in the 2014–15 Budget.

Clause 38 amends section 9(2) of the Road Safety Act 1986. Section 9(2) provides the fee payable for registration or renewal of registration of a motor vehicle or trailer. The effect of the amendment made by clause 38 will be to increase this fee from 18·54 fee units to 20·42 fee units. This increase will take effect from 1 July 2014, when the value of a fee unit will rise to $13.24.

PART 8—TAXATION ADMINISTRATION ACT 1997

Part 8 of the Bill amends the Taxation Administration Act 1997 to permit the disclosure of information obtained under or in relation to the administration of a taxation law in connection with administration of the First Home Owner Grant in another Australian jurisdiction and to certain additional persons for specified purposes.

Clause 39 amends section 92 of the Taxation Administration Act 1997. Subclause (1)(a) amends section 92(1)(b) to allow a tax officer to disclose information obtained under or in relation to the administration of a taxation law in connection with the administration or execution of first home owner grant legislation in another Australian State or Territory. This includes permitting disclosure for the purposes of any legal proceedings arising under a corresponding first home owner grant law, or a report of those proceedings.

This amendment will ensure that Victorian tax officers can disclose taxation information to the State and Territory Revenue Offices, which may assist with the conduct of compliance activities to verify an applicant's eligibility for the first home owner grant.

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Subclause (1)(b) inserts new subparagraphs (ix) to (xiv) in section 92(1)(c) of the Taxation Administration Act 1997, which will permit tax officers to disclose information obtained under or in relation to the administration of a taxation law to the following additional authorised recipients—

the Chief Executive Centrelink for the purposes of administering the social security law within the meaning of the Social Security Act 1991 of the Commonwealth or any regulations made under that law;

the Child Support Registrar for the purposes of administering the Child Support (Registration and Collection) Act 1988 of the Commonwealth or the Child Support (Assessment) Act 1989 of the Commonwealth or any regulations made under those Acts;

the Commonwealth Treasurer in relation to a decision that the Commonwealth Treasurer may make under the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth or any regulations made under that Act or in accordance with Australia's Foreign Investment Policy;

a member of the Foreign Investment Review Board or the Secretary of the Department of the Treasury of the Commonwealth for the purposes of briefing the Commonwealth Treasurer in relation to a decision that the Commonwealth Treasurer may make under the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth or any regulations made under that Act or in accordance with Australia's Foreign Investment Policy;

the IBAC Commissioner for the purposes of administering the Independent Broad-based Anti-corruption Commission Act 2011 or any regulations made under that Act.

Each of the additional authorised recipients has regulatory and enforcement functions, which have been established to protect the public interest. This amendment is intended to ensure that the Commissioner of State Revenue can lawfully disclose information obtained under or in relation to the administration of the taxation laws to support these functions.

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Subclause (2) inserts definitions of Australia's Foreign Investment Policy, Chief Executive Centrelink, Child Support Registrar and the IBAC Commissioner for the purposes of the new subparagraphs (ix) to (xiv) of section 92(1)(c) of the Taxation Administration Act 1997.

PART 9—REPEAL OF AMENDING ACT

Clause 40 provides for the automatic repeal of this amending Act on 1 January 2016. The repeal of this Act does not affect in any way the operation of the amendments and repeals made by this Act (see section 15(1) of the Interpretation of Legislation Act 1984).

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