Welcome to RevenueSA’s educational video series.
In this video we will outline what is land tax and how it is calculated. We will also highlight some of the exemptions that are available and where to go for further information.
Land tax revenue collected is used by the Government to fund the provision of essential services including, public health, education, and law and order for South Australian citizens.
Who is liable for land tax?
Land tax is levied each financial year and is determined based on the ownership and usage of land as at midnight, the 30th June immediately prior to the financial year commencing.
The owner as at midnight, the 30th June is liable for payment of land tax for that financial year.
If the property is sold after the 30th June, generally an adjustment will be made by your conveyancers and you may be required to pay a proportion of land tax at settlement.
Where there is more than one owner, each owner is jointly and severally liable. This means that each owner is liable for the full land tax liability, regardless of their share in the land.
How is land tax calculated?
Land tax is calculated on the site value of the land.
The site value is obtained from the Valuer General’s Department and is the value of the land excluding any added buildings or other improvements.
Basically, it is the value of the land as if it were vacant.
The site values of all taxable land owned in the same land tax ownership will be aggregated, or added together, to determine the land tax payable.
If you only own one taxable property, the site value of this land will be used to calculate the land tax payable.
If you own two taxable properties, the site value of both of these properties will be added together and land tax will be calculated on the sum of the site values.
If you own multiple properties, the site values of all the properties in the ownership will be added together and land tax will be calculated on the sum of the site values.
A tax-free threshold applies to each land tax ownership. This means if the aggregated site value of all taxable properties in an ownership is below the threshold, land tax will not be applied.
The current tax-free threshold is shown.
Land tax is calculated using a progressive rate structure which takes into account the tax-free threshold. The current land tax rates are shown.
These are subject to change each financial year and will increase if there has been an overall increase in land values in South Australia.
So let’s now have a look at a few examples.
In scenario one, only one taxable property is owned which has a site value of $300,000. As this is below the tax-free threshold, no land tax will be applied.
In scenario two, two taxable properties are owned, each with a site value of $250,000. The total site value is $500,000, which falls within the first rate level of land tax.
In this scenario land tax will be calculated on the additional amount above the tax-free threshold. Resulting in a land tax liability as shown in green on the screen.
In scenario three, four taxable properties are owned, each with a site value of $450,000. The total site value is $1.8 million which falls within the fourth and highest level of land tax. Land tax is calculated by: RevenueSA
- identifying the pre-determined tax liability for that level;
- applying the rate to the additional amount above the commencement value of the tax level; and then
- adding these two sums together; resulting in a land tax liability as shown in green on the screen.
What exemptions are available?
A number of exemptions from land tax are available, for example:
- principal place of residence;
- primary production;
- charitable, educational, benevolent, religious or philanthropic;
- native fauna and flora;
- associations; and
While some exemptions will automatically be raised based on the land use of the property as determined by the Valuer-General, others require an application.
Further information regarding land tax exemptions is available on revenuesa.sa.gov.au.
Want to know more?
For more Information go to revenuesa.sa.gov.au and select Land Tax from the Taxes, Duties and Levies menu. Online calculators are available, which will calculate land tax for you.
That brings us to the end of this educational video. If you require any additional assistance, please contact us.