Government delivers millions in extra savings in amended Land Tax Reform Bill

28.10.2019
Lower Costs

The Marshall Government has made further amendments to its Land Tax Reform Bill, which will deliver an extra $20 million in savings for SA investors over the next three years.

The amendments to the Bill – which is now supported by the Property Council of South Australia - increase the top threshold to $1.6 million and require an independent review of the impact of its changes.

These amendments will:

  • Increase the maximum threshold at which the top tax rate of 2.4% will apply by $250,000 in 2020 and a further $250,000 in 2022, so that the top threshold will then be $1.6 million.
  • Introduce a new tax rate of 2.0% to apply from 2020 for site values between about $1.1m and $1.35m and then in 2022 from about $1.1m (indexed) to $1.6m.
  • Require an independent review in 2023 of the impact of the Government’s land tax reform package

The further reduction in land tax of these amendments will be $5.7m in 2020-21 increasing to $8.8m in 2022-23.

“This will now mean the total reduction in land tax collections over 3 years will be $90 million,” said Mr Lucas.

“It will also mean that even more individuals and company groups than originallly estimated will benefit and pay lower land tax bills as a result of the positive land tax reform package.

“In particular, these amendments will benefit many ‘mum and dad’ investors with property holdings between $1.1m and $1.6m whose top rate of tax will drop even further from 2.4% to 2.0%.

“We welcome the fact that, despite its initial opposition to the changes announced in the June Budget, the Property Council has now indicated its support for the amended package.

“We promised to consult on the final form of the Bill and have now agreed to make significant changes to the reform package.”

The Government’s Land Tax (Miscellaneous) Amendment Bill now includes:

  • Slashing the top land tax rate from a national high 3.7% to 2.4%, which is equal to the average of all mainland states
  • Increasing the tax-free threshold to $450,000
  • Changes to aggregation rules similar to other states
  • Increasing the top threshold rate to $1.6 million
  • $90 million reduction in land tax collected over 3 years

“This reform will not only introduce a fairer system but will also drive investment and jobs growth as investors consider the slashing of the top rate to 2.4% together with no stamp duty on commercial property transactions in SA,” said Mr Lucas.

“Given the most vocal critic of the land tax reform is now supporting the amended Bill, it is time for the Labor Party and cross benchers to now support what would be the most significant land tax reform package in the state’s history.”

Legislated

2020-21           $1.1m - $1.35m          2.0%                $250k increase in top threshold

                        over $1.35m                2.4%

 

2021-22           $1.1m - $1.35m          2.0%                No change

                        over $1.35m                2.4%

 

2022-23           $1.16m - $1.6m          2.0%                $250k increase in top threshold

                        over $1.6m                  2.4%                $1.1m increased by indexation

 

2023-24           $1.2m - $1.65m          2.0%                Indexation applies to all thresholds

                        over $1.65m                2.4%

 

2023               Independent review of impact of land tax reform package including changes in 18-19, 19-20 budgets

The Land Tax (Miscellaneous) Amendment Bill will be debated in State Parliament this week.  

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