SA Economic Double Whammy
Pressure on cost of living set to increase yet again
Advance SA MLC John Darley today expressed his grave concerns about an economic double whammy due to hit South Australia.
On 18 June the Treasurer, Rob Lucas, announced sweeping changes to land tax. Directors and beneficiaries will have their interests in properties held in companies and trusts combined with other land holdings in their names. Where individuals cannot be identified, they face a penalty surcharge. Minority interests in properties will also be disaggregated and combined with other land holdings in the same name.
Grouping properties together will increase the total holdings in each ownership pushing them up into the next land tax bracket. Whilst these changes will impact landowners directly, it is likely to impact the wider community through raised rents and an increase in the cost of goods and services to cover the increased cost of land tax.
John Darley said: “I have been contacted by many constituents who have said they will be bankrupted due to the government’s changes in land tax. These are not big rich landowners, they are often mums and dads who have bought one or two investment properties to fund their retirement – now they will be forced to sell up and move interstate.”
To add further insult to injury, property valuations that are used to calculate the amount of land tax payable are due to rise in the coming years due to the Valuer-General undertaking a revaluation of every property in the state.
The Valuer-General’s revaluation initiative is a five year project which will see each property’s valuation scrutinised against the market. Historically the Valuer-General’s valuations have been conservative but valuations across the state are expected to increase under the revaluation initiative. These valuations are used to calculate council and sewerage rates, natural resource management and emergency services levies and land tax so an increase in value is likely to result in an increase in costs.
“The increase in property valuations in conjunction with the changes in land tax means households are likely to see their cost of living increase yet again. This is unsustainable; the government can’t keep expecting endless buckets of gold from taxpayers.” John Darley said.
Anyone with questions about their land tax or valuation can contact John Darley’s office on 8237 9114 for more information.