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Land Tax

16 March 2021


The Hon. J.A. DARLEY (15:18): I seek leave to make a brief explanation before asking the Treasurer a question about land tax.


Leave granted.


The Hon. J.A. DARLEY: I have recently been contacted by owners of land who in the past have received land tax accounts, but to date have not received their latest account. On examination of the circumstances, I have found that many of these people are no longer liable for land tax as a result of the most recent changes. Can the Treasurer advise how many previous land tax payers are not liable for land tax during 2020-21?


The Hon. R.I. LUCAS (Treasurer) (15:19): I am delighted the honourable member is getting that sort of feedback as a result of the government's comprehensive, groundbreaking and competition-busting reforms of land tax just over 12 months ago. Indeed, many of the people who spoke to both the honourable member and myself leading the charge against the land tax reforms—not all of them, because a number of them continue to protest the government's changes, but a number of them—have gone silent.


The reason they have gone silent is that they have actually taken stock of exactly what they are going to be paying under the land tax changes and have realised that they are either better off or nowhere near as badly impacted as they believed they would be, and the government's compensation or transition fund assists them in the first year. So I think the feedback to the honourable member's office has been similar to the feedback I have received.


However, the frank answer to the question is at this stage RevenueSA has indicated to me we are not in a position to be able to give the precise answer to the honourable member's question, other than what we indicated at the time; that is, our assessment at the time was that 92 per cent of individuals would be better off and 8 per cent would be paying more, and 75 per cent of companies or related corporations would be better off and 25 per cent would be paying more.


The honourable member asked a question a week or two ago about people who were still waiting for their land tax bills from the current round of land tax. That is still the case. RevenueSA has advised me that because of the complicated nature of many of the tax arrangements, particularly those that relate to trusts and related corporations, in a significant number of cases RevenueSA has had to go back to the individual taxpayer and ask for further details in relation to the structure of their companies.


I think I have shared with members that in one particular case I think there were more than 400 related companies, with minor differences, structured in a way, under the pre-existing rules, to assist that particular taxpayer. So unravelling those and fitting them into the new tax arrangements that have been approved has required, in many cases, going back and asking individuals for further details.


In all of those cases—and there are a significant number of those cases; it is not just a handful, there are some thousands of those cases—where people are being requested for further information, we are still not in a position to be able to finally say whether they are paying less or more or no change at all.


Bearing in mind that a significant number for the first year—because the government's 100 per cent compensation arrangement means that for anyone with an increase in total tax payable between $2,500 and $102,500 in the first year—it was a zero sum game for them because there was going to be 100 per cent compensation, eventually.


We added to the arrangements that went through the house with some extra COVID relief, which we announced during COVID relief, to increase the percentage from 50 per cent to 100 per cent. So in the first year anyone who was impacted by the aggregation changes, not as a result of increases in valuations of their properties—some people have come to me as Treasurer and said, 'We are paying more. This is terrible.' We go back to them and say, 'Yes, but your property was previously valued at $600,000. It is now valued at $750,000. Therefore, it's an impact of the increased valuation, not the fact of the government's land tax reform changes.'


The answer to the question is I can't give a specific response. If there is anything further I can add other than the general detail I have provided to the honourable member by way of expression, I will, but I am sure, given I raised this question two weeks ago with RevenueSA, I am just not going to be in a position at this stage to provide further clarity to the honourable member's question.