The 2017-18 South Australian State Budget, handed down on 22 June 2017, contained a number of measures relevant to taxes and grants administered by RevenueSA.
The legislative changes to implement these measures were originally included in the Budget Measures Bill 2017. However, the Budget Measures Bill 2017 was withdrawn and replaced by a new Bill, the Stamp Duties (Foreign Ownership Surcharge) Amendment Bill 2017, which introduced the foreign ownership surcharge which was previously included in the Budget Measures Bill 2017, and increased the rate of the foreign ownership surcharge from 4% to 7%.
The Stamp Duties (Foreign Ownership Surcharge) Amendment Bill 2017 received Royal Assent on 12 December 2017.
General information in relation to the foreign owner surcharge can be found on the foreign ownership surcharge page.
In regard to the other measures originally included in the Budget Measures Bill 2017, the Government has announced that it will grant payroll tax ex gratia relief that covers the amount that would be payable if the statutory rate of 4.95% cent was applied instead of the Government’s intended rate of 2.5% (or a rate in the phase out zone for payrolls between $1 million and $1.5 million). As per previous advice, RevNet will continue to calculate payroll tax at the lower rate (where applicable) with any required adjustments being made as part of the annual reconciliation process. Should you have questions in relation to this please contact our payroll tax team on 8204 9880 or firstname.lastname@example.org.
The Government has also committed to the provision of ex gratia relief in relation to all the off-the-plan measures previously announced as part of the 2017-18 State Budget (this includes stamp duty concessions, the $10,000 housing construction grant for eligible purchases and the five year land tax exemption for eligible apartments bought off-the-plan where the contract is entered into between 22 June 2017 and 30 June 2018). Should you have questions in relation to this please contact housing grants team on 8226 3750 or email@example.com.
The other amendments to tax and grant legislation announced as part of the 2017-18 State Budget, and previously included in the Budget Measures Bill 2017, will not proceed at this stage.
2017 State Budget - 22 June 2017
The 2017-18 South Australian State Budget, handed down on 22 June 2017 contains a number of measures relevant to taxes and grants administered by RevenueSA.
The legislative changes to implement these measures (except for the changes to the Job Accelerator Grant which is an administrative scheme) are included in the Budget Measures Bill 2017 (the "Bill") which was introduced into Parliament today. The operation of these measures is subject to the Bill coming into force as an Act.
Measures included in the 2017-18 State Budget are summarised in the table below.
Job Accelerator Grant payments increased by up to $5,000 for businesses that hire apprentices or trainees
Scheme start date
The off-the-plan stamp duty concession will be extended until 30 June 2018 but will be retargeted so that it no longer applies to foreign purchasers
Stamp Duties Act 1923
22 June 2017
A $10,000 grant will be provided to eligible off-the-plan apartment purchasers where the contract is entered into between 22 June 2017 and 30 September 2017
First Home and Housing Construction Grants Act 2000
22 June 2017
A five year land tax exemption will apply to eligible apartments bought off-the-plan where the contract is entered into between 22 June 2017 and 30 June 2018
Land Tax Act 1936
Midnight 30 June 2017
Payroll tax rate for small businesses lowered to 2.5%
Payroll Tax Act 2009
1 July 2017
A major bank levy for major banks offering services in South Australia will be introduced
1 July 2017
A stamp duty surcharge of 7% will apply to foreign purchasers of South Australia residential property
Stamp Duties Act 1923
1 January 2018
Job Accelerator Grant (JAG) payments increased by up to $5,000 for apprentices or trainees
Businesses that register a new employee for a JAG will receive up to an additional $5,000 ($2,500 per year) if that employee is an eligible apprentice or trainee where the position is also deemed to be eligible for the JAG.
The additional amounts will be paid in two equal instalments of $2,500 on the first and second year anniversary of employment.
An apprentice or trainee will be eligible for the additional grant as long as they are being trained under an approved training contract in an occupation that is declared to be a ‘trade’ or ‘vocation’ under Section 6 of the Training and Skills Development Act 2008. A list of declared trades and vocations is available here.
The additional $5,000 grant for apprentices and trainees will be backdated to 1 July 2016 so businesses that have already hired a new apprentice or trainee are eligible for the additional grant.
RevenueSA will be updating the JAG system to allow payment of the additional $5,000 grant by 1 July 2017 or shortly thereafter. In the meantime, businesses can contact RevenueSA on 8226 2210 or firstname.lastname@example.org to discuss the eligibility of their business for the additional grant.
Please visit the Job Accelerator Grant page for more information on JAG.
Off-the-plan stamp duty concession
The off-the-plan stamp duty concession will be extended for a further 12 months to 30 June 2018.
The concession will no longer be available to foreign purchasers that enter into an off-the-plan contract on or after 22 June 2017.
The Stamp Duties Act 1923 will be amended to reflect these changes.
Please visit the stamp duty off-the-plan concession page for more information on this concession.
$10,000 grant to eligible off-the-plan apartment purchasers
Purchasers that enter into an eligible off-the-plan apartment contract between 22 June 2017 and 30 September 2017 may be eligible to receive a $10,000 grant. The grant will be paid after settlement (generally around the time the stamp duty is paid by the purchaser).
To be eligible for the grant the contract must be entered into before construction of the apartment complex commences (this equates to stage 1 of the off-the-plan stamp duty concession included in the Stamp Duties Act 1923).
All other eligibility criteria applying to the off-the-plan stamp duty concession included in the Stamp Duties Act 1923 will also apply to the grant, including that the grant will not be available to foreign purchasers.
The First Home and Housing Construction Grants Act 2000 will be amended to provide for the grant.
How do I claim the grant?
RevenueSA is developing an application form in order to claim the grant. This form will be available in advance of the grant becoming payable.
Please visit the pre-construction grant for off-the-plan apartment page for more information on this grant.
Five year land tax exemption for eligible apartments bought off-the-plan
Apartments that are purchased off-the-plan will be exempt from any land tax that may be payable on the apartment for the first five financial years after purchase.
The exemption applies to eligible contracts entered into between 22 June 2017 and 30 June 2018.
The exemption will no longer apply if the apartment is sold before the end of the five year exemption period.
The eligibility criteria for the exemption are the same as those that apply to the off-the-plan stamp duty concession included in the Stamp Duties Act 1923, including that the land tax exemption will not be available to foreign purchasers.
The Land Tax Act 1936 will be amended to provide for the exemption.
Please visit the land tax exemption page for more information on this exemption.
Payroll tax rate for small businesses lowered to 2.5%
The current small business payroll tax rebate will be replaced by a new tiered payroll tax rate structure from 1 July 2017.
The payroll tax rate for businesses with Australian taxable payrolls between $600,000 and $1.0 million will be lowered from the current rate of 4.95% to 2.50%. The payroll tax rate will then phase up to the rate of 4.95% for businesses with Australian taxable payrolls above $1.5 million.
The revised payroll tax rate structure is provided in the following table.
Annual Australian Taxable Payroll
Does not exceed $600,000
Exceeds $600,000 but not $1 million
Exceeds $1 million but not $1.5 million
variable from 2.50% to 4.95%
Exceeds $1.5 million
The revised payroll tax rate structure will apply to wages paid or payable on and after 1 July 2017.
The Payroll Tax Act 2009 will be amended to reflect this revised rate structure.
How will the payroll tax rate be determined for employers that lodge payroll tax returns on a monthly basis?
The actual payroll tax rate that will apply for an employer cannot be finalised until the annual reconciliation process is completed in July each year.
However, to ensure that eligible employers that lodge monthly payroll tax returns can pay payroll tax at the lower rates, an indicative payroll tax rate for the employer will be determined based on the employer’s estimated annual taxable Australian wages declared at the start of the financial year.
Differences between the indicative payroll tax rate and actual payroll tax rate will be determined as part of the annual reconciliation process, with any over or under payment of payroll tax being resolved at that time. This will mean that:
- businesses will be entitled to a refund where the indicative rate is higher than the actual rate for the financial year; but
- for businesses where the indicative rate is lower than the actual rate for the financial year the business will be required to pay any shortfall as part of the annual reconciliation process.
In light of the above, businesses are encouraged to review their estimates both at the start of the year and throughout the year to ensure that the appropriate rate is being applied.
Are there any changes to the South Australian small business payroll tax rebate?
In addition to receiving the benefit of the lower payroll tax rate from 1 July 2017, eligible small businesses will also receive a small business payroll tax rebate payment in the 2017-18 financial year (which is based on the 2016-17 wages paid), but rebates will no longer be paid in the 2018 19 and 2019 20 financial years.
South Australian major bank levy
Authorised-deposit-taking institutions that offer services in South Australia and are liable for the Commonwealth Government major bank levy will also be liable for a South Australian major bank levy from 1 July 2017.
The State levy will apply at a rate of 0.015% of South Australia’s share of the total value of bank liabilities subject to the Commonwealth Government levy at the end of each quarter.
South Australia’s share of relevant bank liabilities will be determined based on South Australia’s share of the national economy – this will be calculated by expressing the value of South Australia’s gross state product (GSP) as a percentage of the value of Australia’s gross domestic product (GDP) as published by the Australian Bureau of Statistics for the most recent year available.
For the 2017-18 financial year, South Australia’s share of relevant bank liabilities will be set at 6.06% (based on the South Australia’s share of the national economy in 2015-16).
Banks liable for the State levy will be required to provide a return and make levy payments to RevenueSA. Payment timeframes for the State levy are consistent with those that will apply to the Commonwealth levy and are summarised in the table below.
State levy due and payable
21 March 2018
21 March 2018
21 June 2018
21 September 2018
Stamp duty surcharge for foreign purchasers of South Australian residential property
Foreign purchasers that acquire residential property in South Australia will be required to pay a surcharge of 7% of the dutiable value of the property. This surcharge amount is in addition to the duty that is otherwise payable.
The surcharge will apply where a property, part of a property or a part interest in a property is acquired. It will also apply to acquisitions that are captured by the land holder duty provisions.
If the property acquired by a foreign purchaser is exempt from duty, the acquisition will also be exempt from the surcharge.
The surcharge will apply to dutiable instruments (including a statement under Section 71E of the Stamp Duties Act 1923) entered into on or after 1 January 2018.
The Stamp Duties Act 1923 will be amended to provide for the surcharge.
Change of status
A refund of the surcharge will be available where a person who is a foreign purchaser for the purposes of the surcharge at the time of entering into a dutiable instrument, but then ceases to be a foreign person as defined, not more than 12 months after the interest in the residential property was acquired.
The surcharge will be retrospectively imposed where a person, corporation or trust becomes a foreign purchaser within three years of the acquisition of the residential property.
A number of changes announced in the 2017-18 State Budget have implications for foreign purchasers of South Australian property.
Under the amendments proposed in the Budget Measures Bill 2017 a foreign purchaser will include natural persons, corporations and trusts.
Foreign natural person
A foreign natural person is any individual who is not an Australian citizen, Australian permanent resident or New Zealand citizen who holds a special category visa.
A corporation will be foreign where it is incorporated outside Australia or where at least 50% of its shareholding is held by foreign persons, companies or trusts.
A trust will be foreign where the trustee, a person who has the power to appoint under the trust, an identified object under the trust or a person who takes capital of the trust property in default is foreign.
Other minor tax and grant legislative amendments
The Bill also contains a number of other minor amendments to taxation and grant legislation. These include:
- amendments to the Payroll Tax Act 2009 to:
- remedy deficiencies in the owner-driver exemption within the contractor provisions. This amendment operates from 1 July 2017; and
- reflect changes to income tax legislation relating to motor vehicle allowances for the purpose of determining the exempt component of a motor vehicle allowance paid to an employee in respect of the 2016-17 financial year onwards. The new exempt rate is aligned with the rate at which employers can claim a deduction for work related motor vehicle expenses under the Income Tax Assessment Act 1997 of the Commonwealth. This amendment operates retrospectively from 1 July 2016, to coincide with the change at the federal level.
- amendments to the First Home and Housing Construction Grants Act 2000 to:
- enable grant recipients to object to any penalties imposed by the Commissioner of State Taxation where it is determined that the grant recipient did not meet the eligibility criteria and is required to repay the grant. This amendment operates from 22 June 2017; and
- extend the Commissioner’s grant recovery powers to include instances where the relevant land parcel is not a home (for example where the land remains vacant land). This amendment operates from the date of assent of the Bill.
- amendments to the Taxation Administration Act 1996 and Stamp Duties Act 1923 to facilitate the collection and disclosure of additional information relating to real property transfers. These amendments are necessary for the State to meet Commonwealth Government reporting requirements and operate from 1 July 2017.
RevenueSA will update its website with additional supporting information on 2017-18 State Budget measures over coming months.