Land Tax Reform Packages for South Australia
What does this mean for you?
There have certainly been some hot debates over the recent land tax overhaul which has been given the green light in South Australia. Many property owners, including myself, have received a letter from Treasurer Rob Lucas in their mailbox which is several pages long explaining the changes.
I have written this article to help property owners decipher the changes ahead.
What is land tax?
- Land tax is a tax you pay based on the site value of your land and does not include buildings or other improvements to the land
- Land tax revenue assists in the provision of public services such as education, health and public safety
- The site value of all land owned by the same taxpayer is combined to calculate land tax
In a nutshell; the State Government is trying to make our land tax system more competitive to create more jobs and to add greater appeal to property investment in South Australia.
Land Tax exemptions
There is land currently exempt from land tax including your principal place of residence and land used for primary production.
What are the changes?
- The revamp of land tax on July 1, 2020, reduces the land tax rates and increases the thresholds, which means that 92% of individuals and 75% of company groups will pay less land tax
- The top land tax rate of 3.7 percent is being reduced immediately to 2.4 percent, the equal of the average of the mainland states
- The reform includes changes on how land is aggregated
- If you own two or more taxable properties that do not currently appear on the same tax bill, they may be aggregated together and appear on the same bill from 2020-2021 due to the changes
As many people who own multiple properties in South Australia have a total site value below the tax-free threshold, an estimated 9,300 taxpayers will no longer pay any land tax
Will all property owners be affected?
Treasurer Rob Lucas’ letter states that you will not be affected by the changes to aggregation in these circumstances:
- You do not own taxable land (eg. you own your principal place of residence only)
- You own your principal place of residence and one taxable property
- Family members (eg. husband and wife) each own a taxable property in their own names
- You own property in a self-managed super fund – you will not be liable to pay a trust surcharge and there will be no aggregation (unless they are already aggregated)
- Land owned in different discretionary (ie family) trusts if the trustees opt to pay the surcharge
- The total site value of all taxable land you own is below the tax-free threshold
Land held in a Trust
- Land held in certain trusts may be subject to higher surcharge rates of land tax unless trustees nominate the beneficiaries or unitholders of the trust
- This may result in land tax being calculated at the general rates as the beneficiaries or unitholders interest will be aggregated with any other interests in land own
- It may be beneficial for you to nominate the beneficiaries or unitholders of the Trust
Have a question or require more info Land Tax Reform for South Australia..?
If you are concerned about whether the changes will affect you, the team at Tuckfield Conveyancing strongly suggest you contact your accountant to seek taxation advice. If you do not have an accountant, our team can assist in recommending one to you.
Finally, the team at Tuckfield Conveyancing can assist you with property searches reflecting the current site value of your land holdings at a small cost. We welcome you to contact our friendly team for assistance.
Contact Tuckfield Conveyancing on (08) 8344 3448 Adelaide’s property search and land experts.
Article written by Tammy Edwards
Please note that the information contained in this article is of a general nature only and does not constitute legal advice. Tuckfield Agent Solutions does not take responsibility for any errors or omissions obtained from the use of this information.