THE state government has made further amendments to its Land Tax Reform Bill, touting it will deliver an extra $20 million in savings for SA investors over the next three years.
The amendments to the Bill - which is now supported by the Property Council of SA - increase the top threshold to $1.6m and require an independent review of the impact of its changes.
These amendments will:
- Increase the maximum threshold at which the top tax rate of 2.4 per cent will apply by $250,000 in 2020 and a further $250,000 in 2022, so that the top threshold will then be $1.6m;
- Introduce a new tax rate of 2pc to apply from 2020 for site values between about $1.1m and $1.35m and then in 2022 from about $1.1m (indexed) to $1.6m;
- Require an independent review in 2023 of the impact of the government's land tax reform package.
The further reduction in land tax of these amendments will be $5.7m in 2020-21 increasing to $8.8m in 2022-23.
"This will now mean the total reduction in land tax collections over 3 years will be $90m," Treasurer Rob Lucas said.
"It will also mean that even more individuals and company groups than originallly estimated will benefit and pay lower land tax bills as a result of the positive land tax reform package.
"In particular, these amendments will benefit many 'mum and dad' investors with property holdings between $1.1m and $1.6m whose top rate of tax will drop even further from 2.4pc to 2pc.
SA needs to be creating more jobs, not imposing sudden tax hikes which will hurt local jobs.
"We welcome the fact that, despite its initial opposition to the changes announced in the June Budget, the Property Council has now indicated its support for the amended package.
"We promised to consult on the final form of the Bill and have now agreed to make significant changes to the reform package."
But the Labor Party say the "unfair" land tax hikes will still "hurt local jobs, hurt small businesses and drive up rents".
The Labor Party formulated its position after holding a series of community forums and consultation with key stakeholders.
Its primary opposition is that the land tax hikes would have a negative impact on jobs, "compounding" SA's unemployment problem.
"SA needs to be creating more jobs, not imposing sudden tax hikes which will hurt local jobs," shadow treasurer Stephen Mullighan said.
"Since the election, the unemployment rate has increased from 5.6pc to 6.3pc - at times we've had the highest unemployment rate in Australia.
"We need a strong economy, but Steven Marshall's land tax hikes will hurt our economy."
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SA-Best has also reiterated its opposition to the land tax reforms in their current form, expecting it to then be defeated in Parliament with the support of Advance SA's John Darley.
SA-Best treasury spokesperson Frank Pangallo said the government had once again failed to fully appreciate or respect the financial imposts that would be experienced by those who would be hardest hit - "mum and dad" investors - under its reforms package.
"The government's handling of this entire process has been appalling," he said.
"It has refused to release any of its modelling, has refused to genuinely consult - despite its protestations that it has - with the key stakeholders, and throughout, has arrogantly refused to compromise in one of the key areas that needed the most attention.
"Aggregation has been the sticking point from the very start - including the Treasurer's refusal to even consider compromising his position on it.
"The very fact the Treasurer was forced to amend his reforms so many times - many of those at the behest of his own MPs - is indicative of how badly constructed and executed this policy has been from day one.
"While the Treasurer may have convinced the Property Council to support his new changes, there are many members within that association who are very angry at the stance it has taken.
"Other prominent industry groups - like Business SA, the Master Builders of SA, the Motor Trades Association and the Urban Development Institute - share the same view as SA-Best and remain totally opposed to the reforms in their current form.
"While we welcome the Treasurer's latest move, it simply doesn't go far enough."
The Land Tax (Miscellaneous) Amendment Bill, to be debated in State Parliament this week.
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