Controversial South Australian land tax changes were approved and passed by SA Parliament on 28th November 2019. The new bill won the support of both houses after further concessions ensured the backing of the Greens in the upper house.
The reform package delivers $189 million in tax cuts to investors over three years, including tax relief for thousands of smaller family investors. It also slashes the top land tax rate from 3.7 per cent, the highest in the nation to 2.4 per cent. The Government hopes that this will deliver a more competitive, investment-attracting environment for the State, and would drive significant jobs and economic growth.
The government first unveiled the land tax reforms in the June state budget but the initial proposals were heavily criticised by business groups and investors.
Since then it has revamped the legislation several times. In the most recent changes, it agreed to include a $25 million transition fund to help small investors who might be hit by the tax changes. The Government has kept one of the most controversial features, effectively closing a loophole which allowed some large investors with multiple holdings to avoid paying any land tax. The aggregation provisions stop people using complex ownership structures in order to reduce or eliminate their tax bill.
If you have any queries about Land Tax, please talk to your advisor today.