As we step into 2025, staying informed about financial changes is crucial. Our team of expert tax planners at HJC is here to guide you through the evolving landscape, ensuring your financial success. We appreciate your partnership and look forward to helping you navigate the year’s opportunities and updates.
Don’t Miss the Deadline for Your 2024 Tax Returns Geelong
A reminder to our clients who are yet to lodge their 2024 tax returns: the final deadline is fast approaching. The ATO applies late lodgement penalties and interest charges in addition to any outstanding tax bills. To avoid these unnecessary costs, please book an appointment with your tax accountant in Geelong through our website as soon as possible.
For your convenience, our secure online tax return system remains available via this link: Online Tax System.
Understanding Victorian Land Tax
The Victorian government is set to issue its Land Tax assessments between January and June 2025. These assessments will be based on the total taxable value of all land you owned in Victoria as of midnight on 31 December 2024, excluding your primary residence and other exempt land.
Land Tax applies to a range of properties, including investment properties, holiday homes, commercial properties, and vacant land. The tax is calculated using site values determined by the Valuer-General Victoria. It’s worth noting that Land Tax has seen significant increases over the past two years, a trend that is expected to continue into 2025.
If you believe your property valuation is significantly incorrect, you do have the option to challenge it, although this will incur a cost.
Navigating the New Vacant Residential Land Tax (VRLT)
In addition to the existing Land Tax, the Victorian government has introduced the Vacant Residential Land Tax (VRLT), effective from 1 January 2025. This additional tax may apply to residential properties you hold, such as investment properties or holiday homes, if the property was vacant (not lived in by yourself or a tenant) for more than six months in the preceding calendar year. Our tax planners are happy to help if you need further explanation.
Properties that may be subject to VRLT include residential land with an existing dwelling that was vacant for over six months, properties under construction or renovation for two years or more, and uninhabitable properties that have been in that state for two years or more.
It’s important to note that unimproved land (land without a dwelling) and commercial properties are not subject to VRLT. Furthermore, properties exempt from Land Tax (such as your main residence) are also exempt from VRLT.
The VRLT rate starts at 1% of the property’s value and is set to potentially increase to 2% in 2026 and 3% in 2027.
Please do not hesitate to contact our property accountants in Geelong if you would like to learn more about how VRLT might affect you.
Navigating Capital Gains Tax with HJC Tax Accountants In Geelong
Over the past year, we’ve observed a notable increase in the sale of investment properties, which naturally leads to the declaration of capital gains and associated tax liabilities. If you meet the eligibility criteria, you may be able to reduce this tax by contributing some of the proceeds into your superannuation. This strategy allows you to claim a tax deduction, effectively lowering the taxable profit and, consequently, the amount of tax payable.
The funds contributed to your superannuation are then taxed at a lower rate compared to your standard income tax. Depending on your circumstances, it may even be possible to make a larger, one-off contribution. We encourage you to speak with our tax and consulting team to discuss your specific situation in greater detail.
Important Information on Business & Company Name Renewals
If you have received a business name or company name renewal notice, please exercise caution and ensure it has been sent directly from the Australian Securities and Investments Commission (ASIC), the official government body. As trusted business accountants in Geelong we encourage you to be wary of third-party service providers. If you have any doubts about the legitimacy of a renewal invoice or notice you’ve received, please contact our office for verification and assistance.
In line with our commitment to providing reliable support, our comprehensive business accounting services are designed to make your financial processes easy. Our certified accountants specialise in tax and consulting services, payroll tax for businesses of all sizes, assisting in optimising rental property tax returns, ensuring compliance for fringe benefits tax returns and other complex obligations, and providing our SMSF Client Portal for those managing their own superannuation.
With insightful financial reporting, we keep you informed of your business’s financial health through comprehensive accounting and reporting, including monthly and quarterly Business Activity Statements, and offer clear calculations and expert advice on Capital Gains Tax. As your Geelong business advisor, HJC is committed to providing business lifecycle support by simplifying your financial processes, reducing administrative burdens, and ensuring compliance. We work closely with you to personalise tax planning strategies that minimise liabilities and secure financial stability across all business stages, from startup to ongoing operations and business sales.
Preparing for Upcoming Changes to ATO GIC with HJC Tax Planners
Please be aware of an important upcoming change regarding the ATO’s General Interest Charge (GIC). From 1 July 2025, the way GIC is applied will change. Currently, GIC is a tax-deductible expense for businesses, allowing them to reduce their taxable income by the amount of GIC incurred. However, this deductibility will cease from the 2025-26 financial year onwards. Effective tax planners are already considering the implications of this change for their clients.
This change is likely to have an impact on businesses that incur GIC charges due to late tax payments or underestimation of their tax liabilities. The ATO’s aim is to encourage businesses to meet their tax obligations promptly and accurately assess their liabilities.
It is crucial for businesses to be aware of this impending change and plan accordingly to avoid incurring GIC charges in the future. Consulting with your tax accountant in Geelong is highly recommended for proactive planning.
A Note on Asset Allocation from Our Financial Advisors
Asset allocation, which refers to the distribution of your investment funds across different asset classes such as shares and fixed interest, remains a highly effective strategy for managing investment risk, particularly during uncertain periods. We are currently observing increased investment uncertainty, with market volatility on the rise. The VIX index, often referred to as Wall Street’s “fear gauge,” has recently reached a near three-month high, indicating heightened nervousness in the market. We’ve witnessed the NASDAQ experiencing a technical correction (falling nearly 10% at one point), and the ASX 200 is now down over 8% from its peak. Adding to this complexity are factors such as the US’s apparent lack of urgency towards interest rate cuts, ongoing global conflicts, tariffs, and growing recession concerns.
In volatile markets, a well-diversified investment portfolio can act as a crucial buffer against significant losses. While equities may face challenges during a market correction, bonds and other fixed-income investments tend to exhibit greater stability, providing a cushion for overall portfolio performance. At HJC, our dedicated financial advisers in Geelong are committed to helping clients navigate these unpredictable conditions. We ensure their portfolios are strategically diversified to withstand both short-term market downturns and longer-term market fluctuations. By maintaining a diversified approach, investors can remain focused on their long-term financial objectives and mitigate the risk of substantial losses.
If you’re seeking proactive, personalised strategies for your financial future in light of these changes, our Geelong financial planners are here to help – contact us today.
