In addition to income tax, you will be required to pay a Medicare levy of 1.5%. Medicare is the scheme that gives Australian residents access to health care, and as such, resident taxpayers are subject to a Medicare levy, regardless of whether you have private health care insurance. However, it should be noted that having private health insurance may offset the Medicare levy, as the additional cost of obtaining it is eligible for deduction.
For detailed information relating to your own personal circumstances and for online calculators that can estimate how much the Medicare levy will affect the amount of tax you pay, visit the Australian Taxation Office online at http://ato.gov.au/individuals/
Australia has a Goods and Services tax (GST) of 10% built in to most purchased items. Similar to the UK’s VAT, the GST is not applicable to fresh foods like milk (staple food items are exempt) and a smattering of other products. You will not need to calculate GST, as it is Australian law that the advertised or displayed price for any item include GST.
If you are leaving the country within 30 days of entry and are buying consumer goods of $35 or more, keep your receipts. You will be able to get a refund on all GST paid on these items at the airport, if you have spent AU$300 or more in total. In Melbourne Airport the GST counter is after passport control but before the security checkpoint. Just look for the sign that says “GST Refunds and Claims”.
If you are running a business in Australia, all GST that you pay on any goods or services you buy for the operating of your business are eligible for refund upon filing your business tax.
This tax applies to certain products manufactured in Australia (or imported for sale), including alcohol, tobacco, and petrol. The rate at which these goods are taxed vary by product type and as they are often a source of much political debate, change frequently. As a consumer most of these taxes will not be apparent (unless your favourite alcoholic beverages or cigarettes jump rapidly in price) as they are included in the advertised or displayed price for all products they effect.
Property Taxes in Melbourne (and the rest of Australia) are referred to as ‘Rates.’ If you own a home, you will pay these and Water Rates in addition to your normal utility bills. Rates are payable once a year and vary by suburb, the size of your house, and its approximate market value. An owner of an average three bedroom, detached home in Melbourne can expect to pay about $2,000 in property Rates annually, and about $600 in Water Rates.
Stamp Duty (Property Purchase Tax)
Stamp Duty applies to high cost transactions, such as purchase of real estate or businesses, as well as major financing transactions. Victoria has set rates for Stamp Duty based on the overall eventual cost of a transaction. The rates are currently as follows.
|Value of Transaction||Applicable Tax|
|$0 – $25,000||1.4 per cent of the dutiable value|
|$25,001 – $130,000||$350 plus 2.4 per cent of the dutiable value in excess of $25,000|
|$130,001 – $440,000||$2,870 plus 5 per cent of the dutiable value in excess of $130,000|
|$440,001 – $550,000||$18,370 plus 6 per cent of the dutiable value in excess of $440,000|
|$550,001 – $960,000||$28,070 plus 6 per cent of the dutiable value in excess of $550,000|
|More than $960,000||5.5 per cent of the dutiable value|
Luxury Car Tax
Any car dealership that sells cars in Melbourne for more than $57,123 must pay a Luxury Car Tax. This is usually passed on to the buyer by the dealership. The tax is an additional 33% on any amount over the threshold.
Wine Equalisation Tax
The Wine Equalisation Tax (or WET, just for a laugh) was designed to maintain the price relativities between cask wine and full strength packaged beer purchased for consumption away from licensed premises. This tax is paid by wine makers and wholesalers (at a rate of 29%), and passed on to consumers in increased prices. The price for any beer or wine subject to the tax will be included in any advertised or displayed prices.