Dec 03, 2019 / News

Taxation

SA Land Tax Update

On 28 November 2019, the Land Tax (Miscellaneous) Amendment Bill 2019 was passed.

The legislation will take effect from 1 July 2020 (i.e. land held at midnight on 30 June 2020).

Measures that mean less tax

• Reduction in the top marginal land tax rate from 3.7% to 2.4%
• Increase in the top marginal threshold from $1.3M to $2M by 2023
• Increase in the tax-free threshold to $450k in 2020/21, $464k in 2021/22 and $477k in 2022/23
• New threshold introduced between $1.1M - $2M taxed at 2%, rather than 2.4%
• A $25M transition fund will assist provide partial relief to eligible individual taxpayers and company groups (who qualify) for three years

Measures that could mean more tax

• New aggregation measures to include the taxable value of all land ownerships held by an owner based on their interest in every piece of land, rather than only aggregating properties held in the same ownership structure
• Provisions introduced to allow two or more related companies to be grouped for land tax
• Trust surcharge rates will be imposed on certain trusts unless the trust is exempt &/ or can nominate a designated beneficiary

What do these amendments mean for you?

If you only own a single parcel of taxable land or multiple parcels which are already aggregated, you could potentially benefit from the new lower rates and higher thresholds, particularly if the aggregated value of your land holding(s) is significant.

If you own multiple parcels of taxable land through different ownership structures and entities, then you will need to review your current land holding position as you could potentially have an increased annual land tax liability.

How can Nexia Edwards Marshall help you?

Nexia Edwards Marshall has been maintaining a close watch on the soon to be legislated changes and can assist review your position. We recommend you contact Grantley Stevens or your trusted Nexia Edwards Marshall adviser to discuss the potential impact on your circumstances and strategies to implement moving forward.

Rates and Thresholds

Current rates to 30 June 2020

New General Rates

New Trust Surcharge Rates

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.  

Sources: 
https://www.adelaidenow.com.au/news/south-australia/state-government-on-verge-of-finally-clinching-land-tax-changes/news-story/4f9926d878aa032c702026971f03ec39
https://www.legislation.sa.gov.au/LZ/B/CURRENT/LAND%20TAX%20(MISCELLANEOUS)%20AMENDMENT%20BILL%202019/UNOFFICIAL%20ROYAL%20ARMS/LAND%20MISCELLANEOUS%20AMENDMENT%20BILL%202019.UN.PDF