Liberal Party vows to decrease land tax for investors if elected in South Australia
New plans to lower land tax rates for property investors across South Australia have been welcomed by the Urban Development Institute of Australia (SA), with the potential threshold for land tax to be payable to be increased from $316,000 to $400,000.
The top land tax rate for land up to $5 million has also been suggested to see a decrease, from 3.7% to 3%, making holding property cheaper.
If elected to government, the Liberal Party has said that proposed changes would come into play from 2016/2017, which UDIA (SA) executive director Terry Walsh has called a “good start” in reform.
“While we’re disappointed the Liberals’ proposed land tax relief will not be introduced until 2016-17, we do applaud their willingness to proceed with land tax reform,” said Walsh. The land tax rates will be kept at this level over 2017/2018 as well, at a total of $106 million across the two years.
“This is a positive step in overall land tax reform. Buyers of land in residential development projects across the state will benefit from the plan, with the higher land tax threshold likely to result in price reductions for house and land packages.”
He said that this could lower the median price for buyers of land within larger residential projects by several hundred dollars, as well as reduce the operating costs of rental houses owned by mum and dad investors.
“Land tax is a slug on all property used for investment, including land being prepared for housing construction, and adds to the costs borne by property buyers, particularly first homebuyers,” said Walsh.
“The UDIA encourages all parties to relieve the impost that land tax has on individuals and enterprises using property. We all pay for this government revenue-raising and our industry looks forward to working with the next elected Government to consider the effects of land tax and other taxes and charges on the success of enterprises and jobs in South Australia.”
The Liberal party has also pledged to repeal the transport development levy.
Premier Jay Weatherill has slammed the proposal, saying that it is completely unfair to the majority of South Australians.
“Land tax is only paid by people who own multiple properties,” said Weatherill.
“This comes on top of promises on payroll tax and the transport development levy.
“Most South Australians only own one house, most businesses don’t pay payroll tax and most people don’t own a car park.”
He said the proposals will only help the “big end of town”.
FURTHER READING:
How property investors can avoid the traps and pitfalls of land tax
Swapping stamp duty for land tax would improve affordability: Institute