Land tax shot in the arm for South Australia
18 February 2005
 A $245 million package has been announced to reduce land tax in South
Australia, a move welcomed by the real estate industry which sees that the
changes will help sustain the property market, particularly for small investors
and families with a holiday home. The announcement is causing ripples in other
states as government elections loom nearer and disquiet grows with property
taxes everywhere.
The South Australian Government, which has been under pressure to ease land tax
rates for more than 18 months, has just raised the tax-free threshold from
$50,000 to $100,000, which effectively means that 44,000 investment property
owners who currently pay land tax will no longer have to do so. The restructured
scheme will be back-dated to January 1, with the state's 121,000 land-tax payers
to receive a rebate over the next few months.
President of the Real Estate Institute of South Australia (REISA), Mr Robin
Turner, said that land tax had been a key issue for the industry in recent times
and that it was really starting to hurt the investment market.
“Land tax is a tax levied on an unrealised gain with no associated income, so
for many people, this annual tax was starting to make them question the value of
their investment,” he said.
“Also, families with a holiday shack were really feeling the financial burden of
land tax so it's particularly encouraging to see that properties valued at less
than $100,000 will now be exempt.”
REISA also welcomed the announcement that Bed and Breakfast operators will be
able to claim relief from land tax, in direct proportion to the area used for
the business, and that caravan and residential parks will be exempt from the
charge. “There is no doubt that this relief will be widely welcomed by property
owners.”
It is a relief homeowners would like to be feeling in Victoria, and NSW, where
the high cost of land taxes are forcing people to dispose of their holiday
homes. In Western Australia, with an election this month, the Real Estate
Institute is lobbying for annual increases in land tax assessments to be
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