The affordable housing land tax concession provides eligible property developers with an ex gratia concession where land being used to develop affordable housing has been aggregated for land tax with other land they own.
The ex gratia relief is limited to one financial year for each property.
How much is the ex gratia concession?
The ex gratia concession equals the difference between the actual land tax liability and the tax the developer would be liable for on each affordable housing parcel if they were assessed individually and not aggregated with other land they own.
Developer Pty Ltd owned a single block of land. At midnight 30 June, the developer has subdivided the block into three allotments: A, B and C. They intend to build a single dwelling on each allotment.
The house on allotment C will be affordable and meets all criteria for the concession as detailed below.
The concession will be calculated as follows:
Land tax assessed on A, B and C jointly
Subtract land tax assessed on A and B jointly
Subtract land tax assessed on C only
Equals value of concession
Is my land development eligible for the concession?
For a developer to be eligible for the concession, the following must apply:
- Subdivision has already occurred; and
- The home is advertised to buyers in line with the “eligible buyer” criteria outlined in the developer responsibilities for affordable housing managed by the SA Housing Authority, and where selling to homebuyers, advertised at a specified price.
What does a developer need to do to meet the criteria for this concession?
The developer must:
- enter into a Land Management Agreement (LMA), or similar arrangement, with the SA Housing Authority which includes the proposed affordable housing outcomes;
- own the land at midnight 30 June. The concession will only be available for a single tax year. If the development is not completed in that tax year, the developer will not be eligible to reapply for the concession for that parcel of land;
- report on the delivery of the affordable home(s) to the Authority as per their LMA.
What does “affordable housing” mean?
For this concession, the home must meet the criteria for affordable housing under the South Australian Housing Trust Regulations 2010 and published in the SA Government Gazette. The criteria include:
- There is a legally binding agreement in place for the purposes of development authorisation
- Advertised for sale to an eligible home buyer at a price point equal or below those published annually in the SA Government Gazette. The current price points (from February 2020) are:
- $365,000 for Greater Adelaide
- $296,000 for the rest of the state
- A 15% price increase on the above is permissible where other criteria, such as energy efficiency or proximity to public transport, are met.
The price point is updated from time to time and the eligibility for this concession will be adjusted accordingly
- Sold to a community housing provider, the SA Housing Trust or an approved affordable rental provider.
What is an “eligible home buyer”?
An eligible buyer is defined at affordablehomes.sa.gov.au.
Specifically, it includes:
- buyers subject to defined income and asset limits, including
- who don’t currently own a property,
- are a resident of South Australia; and
- plan to live in their new home.
The property must be advertised to eligible buyer for the prescribed exclusionary listing period. After this period the property can be advertised more widely and will not impact eligibility.
What do I need to provide?
To claim the ex gratia concession, developers need to provide the following as part of their online application:
- the Certificate of Title of the subdivided parcel of land on which the affordable home is/will be built; and
- a copy of the LMA or similar arrangement, between you and SA Housing Authority.
The property developer’s LMA will include the requirement for the developer to report to SA Housing Authority once the home is completed. The information the developer provides to SA Housing Authority will be provided to RevenueSA for verification before the concession is applied.
How do I apply?
From 1 July each financial year, eligible developers can apply to RevenueSA for the concession.
Applications can be made up to 31 March of the applicable/relevant financial year.
A developer owns a parcel of land at midnight 30 June which is liable for land tax for the 2020-21 tax year. To receive the concession in the 2020-21 year, the developer has until 31 March 2021 to apply.
Please use the online form to apply for this concession.