Adjourned debate on second reading
(Continued from 26 September 2017)
The Hon. J.A. DARLEY (16:52): The government is extending the grants from previous years for off-the-plan apartments. A $10,000 grant is available to certain eligible transactions for off-the-plan apartments. A stamp duty concession is also available to these transactions.
From the information provided by the Valuer-General's office, 22 per cent of apartments that have been bought and resold in the past five years have sold at a loss. The data provided showed that those who made money did not make a large profit from the resale of their property. However, those who did suffer a loss tended to incur a significant loss. The banks are generally reluctant to loan on single-bedroom apartments that are less than 60 square metres in area, and any apartment that does not have a car park allocated is difficult to sell.
This indicates that apartments are not the best choice for a property purchase when accounting for resale value and equity. As such, Advance SA believes it would be beneficial to extend the stamp duty concession and the $10,000 grant to all new house and land packages in the state to help stimulate the building and retail sectors associated with this area. I understand that with each new house and land package there is a significant multiplier effect with regard to associated industries.
Further to stamp duty concessions, as part of the 2015-16 budget the government progressively abolished stamp duty on the transfer of business premises. I recently encountered an issue with a constituent who purchased a property zoned commercial; however, it was being used as a residential property by the previous owner. I understand that, prior to historical rezoning, the entire area was residential, and that the previous owner had lived in the property prior to the commercial evolution of the area. That is to say that the previous owner had been there for many years, and over an extended period of time the use of neighbouring properties changed from residential to commercial to a point where the entire area was rezoned.
My constituent intended and, indeed, now has converted the property for commercial use, however is ineligible for the stamp duty concession as the use at the time of the settlement transfer was residential. The government should give consideration to providing a stamp duty concession in these circumstances by way of application if the property owner can demonstrate within a specified time frame that they are using the property for business purposes.
For those who have purchased an off-the-plan apartment, and have been eligible for the stamp duty concession, the government will also give them an exemption for land tax for the first five years. Whilst on paper this looks positive, it should be noted that most of the apartments purchased would be exempt in any case because the site value would be under the threshold where land tax is payable. Further to this, apartments that are purchased and used as a person's principal place of residence would also be exempt. The government advised during my briefing that they expect to forfeit $100,000 per year by providing this exemption—this really is an insignificant amount when compared to the government's total budget.
The government intends to introduce a surcharge on residential properties that are purchased by foreigners. I understand that most other states have already introduced similar measures; however, I find it curious that this surcharge is limited only to residential properties. I understand there is concern in the general public about foreigners purchasing land in Australia, and this may lead to an increase in housing prices. However, I understand there is concern about foreign ownership of Australian companies and particularly farming land. It will be interesting to see if the government will react to these community concerns in the future.
Finally, the government's bank tax. I believe that introducing this tax will impact on the cost of doing business or housing, as bank loans will be affected. Retirees, pensioners and others who rely on bank profits will also be affected. It will put South Australia into reverse gear, and that is the last thing we want. By introducing this tax, the government has sent a clear message to businesses that they may wake up one day and be faced with an additional arbitrary tax at the whim of the government.
Just because a business is successful does not mean that they should be the government's cash cow. While it is only the banks that the government currently have in their sights, we do not know who could be next. It might be Coopers, Vilis, Rossi Boots or even the Shahins. I have never supported the bank tax, and I want to put on the record that Advance SA does not support it either, even though my former colleague, Senator Nick Xenophon, did support it until I convinced him to do otherwise. As it stands, I will not be supporting this bill.