South Australian Land Tax

Importantly for land owned in trusts, Trustees will be subject to surcharge rates of land tax unless a Nomination of Designated Beneficiary is lodged. There are critical dates to be aware of should a Trustee wish to nominate which are outlined below

With respect to land owned by companies, the regime will seek to group related corporations and assess the group as if the land were held by a single corporation.

We expect that Revenue SA is now corresponding with property owners to provide further information on the soon to be launched Land Tax Portal as well as outline key cut off dates for notifications and nominations.

The key dates to be aware of are as follows:

The Valuer-General announced on 1 April 2020 that she is revising her approach to the Revaluation Initiative.  While the annual General Valuation mass appraisal and revisit program will proceed as usual, she is delaying implementation of Cycle 2 of the Revaluation Initiative this year. In addition, she expects that there will be some changes in property values this year – however their analysis suggests that the majority are modest in nature and are reflective of the circumstances in place as at 1 January 2020.

From 1 July 2020 there will be an immediate reduction in the top marginal rate of land tax from 3.7% to 2.4%, an increase in the tax-free threshold to $450,000 and the top threshold to $1,350,000, the introduction of a new tax bracket at 2.0% for total site values between $1,098,000 and $1,350,000 and a reduction in the rate of land tax on land valued between $755,000 and $1,098,000.

There is a relief for significant land tax increases faced by taxpayers in the first 3 years of aggregation, with the first year increased as part of the coronavirus relief package announced on 26 March 2020.  The following principles will be used:

Taxpayers must be up to date with their land tax payments to be eligible for relief.

The SA Government has a comprehensive program promoting the development of affordable housing, which is set out in notices in the Government Gazette under the South Australian Housing Trust Regulations 2010.  Relief will be provided such that the amount of land tax is payable by reference to each parcel of affordable housing land as if it was assessed separately.  Relief is limited to a 12 month period and is conditional upon the developer entering into a Land Management Agreement or similar.

The SA Government has a public and community housing program.  Ex gratia relief to reduce land tax to nil, which is limited to 100 SA properties as an initial pilot program for 5 years, will be available to landowners which meet the following conditions:

• Agreement with a registered community housing provider for the purposes of affordable community housing.
• Rent is less than 75% of current market rent
• Tenant has low to moderate-income (currently approx. $51k for single or $67k couple, with increases for dependent children)
• No rented to a related party
• Is continuously rented as such, with no gap in rental period exceeding 3 months