Changes to land tax rate in South Australia will now go forward on July 1, 2020, says Treasurer Rob Lucas.
The overhaul aims to change aggregation rules and bring SA’s land tax much consistent with other states‘. The overhaul will reduce SA’s land tax rate from 3.7 per cent to only 2.4 per cent, which is about the same as the average rate of mainland states.
Mr. Lucas pointed out that the revamped tax will attract property investors. He said Western Sydney or Melbourne might be less of an option now with SA as an additional available alternative for property investors looking to invest in the country.
Aside from the lowered rate being an investment attractor, Mr. Lucas also believes the change would create jobs.
Investors looking to invest in commercial, industrial and residential property would find the new rule more attractive.
He said, “People in other states will have a look down the end of the road and also see some of the big spending under way in defence, space, shipbuilding and cybersecurity.”
SA Land Tax Rate
The rate of SA at 2.4 per cent will be higher than NSW at 2 per cent and Victoria at 2.25 per cent. However, it will be lower than WA at 2.67 per cent and Queensland commercial property land tax rate of 2. 75 per cent.
The overhaul was first announced in the June state budget. It has since then been revamped five times in compromise to the concerns of both independent and minor parties in SA’s upper house.
The core element of the overhaul, where high-end investors will not be able to use trust or company structures in order to avoid paying land tax, will remain.
Executive Director of SA Property Council said South Australia being a commercial stamp duty-free state, the new rate will only encourage more investors, in the same way that the anti-competitive rates of before and the low thresholds have long discouraged them from investing in the state.
The new revamped tax will also benefit the residential sector. SA has a more affordable entry point for investors and combined with lowered rates and thresholds, the revamped land tax rate would serve these investors well.
The new land tax rate of SA will come into effect on July 1, 2020.
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