Debate rages on mum, dad SA land tax impact as figures show millionaire investors benefit most from cut
Treasurer Rob Lucas has released figures showing $96 million a year from the new land tax cut will go to millionaire property investors — people with portfolios valued at $1.1 million or more.
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Millionaire property investors will pocket the overwhelming benefits from a new State Government land-tax plan as debate rages about the impact for “mum and dad” investors, it can be revealed.
Premier Steven Marshall’s controversial reform includes cutting the top rate of land tax, and increasing the point at which the charge kicks in for the first time.
It will also stop people and businesses ducking tax by splitting ownership between legal structures.
On request from The Advertiser, Treasurer Rob Lucas has released figures showing $96 million a year from the tax cut will go to people with property portfolios valued at $1.1 million or more as the top rate falls from 3.7 per cent to 2.4 per cent next year.
That compares with $9 million in benefits as the Government exempts land portfolios valued at $450,000 and under from the charge at all, compared with the current threshold of $391,000.
Those tax cuts, which total $105 million annually from next year, are in part paid for by $86 million in new cash to the State Budget as the property splitting “loophole” closes.
Scrollable table of land tax changes: Click here if not displaying properly
Mr Lucas rejected suggestions the tax cut was unfairly flowing to “the top end of town”, saying a family with a modest investment property portfolio could easily be paying the top rate over $1.1 million.
“The $96 million isn’t going to the top end of town, well, not only to the top end of town,” he said. “It’s going to those with big property developments but also those with three properties at Newton that average out at $500,000 each. We’ve reduced the rate for them.”
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The Government is preparing for an effective take-it-or-leave-it showdown with Labor and the crossbench over the reform package, which it says must be passed by Christmas so relief can flow next July.
Labor plans to hold public forums and consider fine detail of the complex package before showing its hand, but Opposition treasury spokesman Stephen Mullighan said the lopsided nature of the tax cuts raised new fairness concerns.
“It’s clear that Premier Steven Marshall is focused on tax relief to those people who own the most land, while punishing families and self-funded retirees with higher bills,” he said.
“They are punishing people at the lower end of the scale while rewarding people at the higher end of the scale.”
SA Council of Social Services SA chief executive Ross Womersley lauded the Government for closing the land tax-splitting loophole. However, he said community services and support should be a much higher priority than a “giveaway” to the wealthy.
“The concessions to industry are very generous at this point,” he said. “The property industry is really making a grab for its own interest.
“In this instance, the larger investors will probably be the major beneficiaries. The more we gut this package of revenue, the more that other vital services are going to be gutted.”