UDIA welcomes Liberal plan to lower land taxes

Plans released by the Liberal Party today to lower land tax rates for property owners across South Australia have been applauded by the Urban Development Institute of Australia (SA).

Under the Liberals’ plan, the threshold at which land tax would become payable by property owners would increase from $316,000 to $400,000, while the top land tax rate for land valued up to $5 million would be reduced from 3.7% to 3.0%.

If elected to Government, the Liberal Party says its proposed changes would apply from 2016-17. UDIA (SA) Executive Director Terry Walsh says the initiative is a “good start” in land tax reform.

“While we’re disappointed the Liberals’ proposed land tax relief will not be introduced until 2016-17, we do applaud their willingness to proceed with land tax reform,” said Mr Walsh.

“This is a positive step in overall land tax reform. Buyers of land in residential development projects across the state will benefit from the plan, with the higher land tax threshold likely to result in price reductions for house and land packages.

“This could lower the median price for buyers of land within a large residential project in SA by several hundred dollars, and reduce the operating costs of a house owned by small investors for rental.”

Currently, the owner of a property as of June 30 each year is liable to pay land tax assessed for the forthcoming financial year. Where a property is then sold after June 30, the vendor is still liable to pay land tax, however with a proportional contribution generally passed onto the new buyer of the land in the forthcoming year.

“Land tax is a slug on all property used for investment, including land being prepared for housing construction, and adds to the costs borne by property buyers, particularly first homebuyers,” said Mr Walsh.

“The UDIA encourages all parties to relieve the impost that land tax has on individuals and enterprises using property. We all pay for this government revenue-raising and our industry looks forward to working with the next elected Government to consider the effects of land tax and other taxes and charges on the success of enterprises and jobs in South Australia.”

Established in 1971, the UDIA (SA) represents the interests of the development industry in South Australia in collaboration with all levels of government. It seeks to represent all sections of the urban development sector, including developers, councils and service providers such as engineers, planners and surveyors. As the fifth largest contributor to output in SA, the property development industry employs 56,000 people or 7% of the state’s total workforce, and accounts for almost $9 billion or 12% of Gross State Product.

FURTHER INFORMATION:  Please contact
UDIA (SA) Executive Director Terry Walsh on 0408 704 790