THE state government has finally released details on its controversial land tax reform package, with uproar over revisions made to initial numbers.
Treasurer Rob Lucas announced the reforms in the state budget in June, which included an 'aggregation model' that based land tax upon the entire value of one's portfolio, rather than on the individual value of each site.
"This measure aims to close a loophole, which we don't think is fair and we will be introducing a model that works well in Vic and NSW," he said.
The government also said it would reduce the existing top land tax rate for the value of ownerships above $5m by 0.1 percentage point each year from 3.7pc in 2019-20 to 2.9pc by 2027.
"We are also increasing the threshold below which no one pays land tax, from $391,000 to $450,000," Mr Lucas said.
This tax-free threshold will remain, but Mr Lucas has since slashed that top rate to 2.4pc - the average of all mainland states - and says it will be immediate.
It is unfair that someone can own $2 million to $3m in properties and yet not pay a single dollar in land tax.
"The proposed reforms - to come into effect from July 1 next year - will mean the overwhelming majority of 'mum and dad' investors (92pc or 47,800 individuals) and company groups (75pc or 7900) will pay less land tax as a result," he said.
"It is unfair that someone can own $2 million to $3m in properties and yet not pay a single dollar in land tax."
Mr Lucas said it was originally estimated that aggregation would generate an additional $40m a year.
But consultation and greater investigations had since provided "clarity" on this estimate, he said.
"Treasury has now estimated that at a top tax rate of 2.4pc, aggregation changes will raise an extra $86m per annum, while if the top tax rate had remained at 3.6pc - revenue would have been $118m," he said.
"We accept the fact that our initial estimates were inaccurate, and significantly underestimated the amount of revenue to be collected through the aggregation model.
"But we always said that if we generated more revenue than intended, we were committed to reducing the top tax rate more quickly, which is exactly what we've done."
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To gauge how these changes will affect the public, the Labor Party has announced it will hold land tax forums across Adelaide, with the first on Monday, September 23.
SA Labor Leader Peter Malinauskas said feedback at these forums will help guide Labor's response to the Liberals' legislation in Parliament.
Labor is also supporting the establishment of a parliamentary inquiry, he said.
SA-Best treasury spokesperson Frank Pangallo, who hosted a land tax forum last month, agreed an "open and transparent inquiry" was needed.
"We are totally opposed to the aggregation of trusts and need to explore all options."