Industry push for South Australian land tax system to replace property stamp duty
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THE drive for residential stamp duty to be replaced with an annual land tax is gathering pace, as key industry figures are convinced the current system will drive businesses out of the state.
Real Estate Institute South Australia president Greg Troughton said that “we need to have some really hard discussions about how best to relieve the tax burden on property”.
“Property is absolutely being bled dry and we need to do something radical and the best outcome is a broad based land tax,” he said.
But changes to the system that raised more than $350 million through land tax in 2016/17 could only come through political will.
“Just the words — broad based land tax — in one sentence will strike fear into politicians,” he said, as an annual levy on the family home had been long seen as a no-go area.
Treasurer Rob Lucas is refusing to budge.
“There are no plans to review stamp duty arrangements for residential property,” he said.
“The Government accepts our current land tax regime is unfair and uncompetitive. It has been a significant disincentive to investment in SA and that is why we will start reducing land tax in 2020.
“From July 2020 the State Government will increase the land tax, tax-free threshold to $450,000 from $369,000.
“We will also cut the land tax rate from 3.7 per cent to 2.9 per cent for properties valued between $1.231 million and $5 million, which will ensure SA is more competitive nationally.”
The calls for a tax debate in SA — backed by the Property Council Australia SA — follow the abolition of stamp duty on all commercial property in SA this month, a move sales agents believe will further open up SA as an attractive destination for east coast buyers faced with a congested local market.
PCA (SA) acting executive director Torie Brown says a discussion between government, building owners and the community on broader land tax reform must be had.
“We want to be known as a low-cost jurisdiction with innovative tax policies that drives investment,” she said.
A 20-year phase out of stamp duty began in the ACT in 2012, but duty revenues there have increased since due to rising property prices.