State Budget Updates

The following taxation measures were announced by the Government as part of the 2019-20 State Budget handed down today, 18 June 2019.


Land Tax

Amendments to the Land Tax Act 1936 to:

  • introduce improved land tax aggregation provisions and a surcharge on certain trusts; and
  • reduce the top marginal land tax rate.

The Government has announced that the changes will apply from the 2020-21 financial year (land tax calculated on 30 June 2020). The final details of the arrangements are subject to consultation prior to implementation, and the approval of legislative amendments by Parliament.

Aggregation and trust surcharge measures

The Government will introduce improved land tax aggregation provisions and a surcharge on certain trusts to ensure that there is equity between taxpayers.

In South Australia, land tax ownerships are aggregated together to ensure owners of land pay equivalent land tax rates on the total value of land regardless of the composition of land held.

An improved approach to the aggregation of land for land tax purposes will be introduced in South Australia to look through separate legal structures to determine the true owner of land and include:

  • a shift to aggregation based on an owner’s interest in every piece of land, rather than only aggregating properties held in the same ownership structure;
  • introducing provisions to allow two or more related companies to be grouped for land tax purposes; and
  • introducing a surcharge on land owned in trusts in cases where the interests in land of trust beneficiaries are not disclosed by taxpayers or cannot be identified. Exceptions will be provided from the surcharge for certain trusts.

Reduction in top marginal tax rate

The Government will progressively reduce the top land tax rate from 1 July 2020 to increase the competiveness of the land tax system in South Australia.

This measure will extend the existing reforms to land tax introduced in the Statutes Amendment and Repeal (Budget Measures) Act 2018, which increased the tax-free threshold for land tax to $450 000 and introduced a new lower marginal land tax rate of 2.9% for the value of ownerships between the existing top land tax threshold ($1.3 million) and $5 million from 1 July 2020.

The existing top land tax rate for the value of ownerships above $5 million will now be progressively reduced by 0.1 percentage point each year from 3.7% in 2019-20 to 2.9% from 1 July 2027, as outlined in the table below.

Rate Reduction Schedule

Year Top marginal tax rate
2019-20 3.7%
2020-21 3.6%
2021-22 3.5%
2022-23 3.4%
2023-24 3.3%
2024-25 3.2%
2025-26 3.1%
2026-27 3.0%
2027-28 2.9%

Payroll Tax

Compliance

In addition to the above land tax measures, the Government is providing additional funding for RevenueSA to undertake additional payroll tax compliance work.

RevenueSA will expand existing and develop additional compliance programs focusing on businesses who have failed to register for payroll tax, the grouping of businesses, the use of contractors and other high risk areas.


Previous Budgets