REDUCING LAND TAX A STRONG PLAN FOR REAL CHANGE 1

REDUCING LAND TAX A STRONG PLAN FOR REAL CHANGE 1

We re ready. Over the last four years, we ve been working hard developing our vision for the future of South Australia. Not just policies, but a series of achievable milestones that have been crafted for the long-term benefit of our state. Our focus will be MORE JOBS. LOWER COSTS. BETTER SERVICES. We ve got a strong plan for real change. A STRONG PLAN FOR REAL CHANGE 2

WHAT WE LL DO We will commence a comprehensive series of reforms to the land tax regime in South Australia. From 1 July 2020, we will increase the tax-free threshold to $450,000 from the current $353,000. This will benefit thousands of South Australians who have invested in property as part of their superannuation, as well providing some benefit for larger investors. We will also cut the top marginal tax rate from 3.7% to 2.9% for holdings valued from just over $1 million up to $5 million, benefiting approximately 3,200 land tax payers. This 3.7% rate is currently levied on all holdings valued from $1.176 million, and will be indexed to 2020-21 values. The beneficiaries of our land tax cut will include many hardworking people who have invested in two or three modest houses to support themselves in retirement, who now have to pay huge amounts of land tax on the same portfolio which has passed the top threshold through value appreciation. These beneficiaries will also include small to medium businesses that own their premises and employ thousands of South Australians in industries outside the property sector. Together, these measures are estimated to save property owners approximately $32.3 million per annum.1 Over the long term as budgetary circumstances permit, a Marshall Liberal Government will aim to have a nationally competitive land tax regime. We will also investigate and pursue other improvements to the State s property tax regime to support investment and job creation by enhancing efficiency and competitiveness. Within the first term of a Marshall Liberal Government, we will investigate options for smoothing the impact of revaluations of properties on land tax liabilities, while ensuring property owners pay a rate of tax reflecting the fair (current) value of properties.

MORE JOBS. LOWER COSTS. BETTER SERVICES. WHY WE RE DOING IT South Australia is home to many great businesses and opportunities, all capable of creating more jobs, and prosperity. But the policy settings under the Weatherill Labor Government are stifling business investment and discouraging businesses from investing their capital and creating jobs here in South Australia. Too many businesses are choosing to invest in other parts of Australia because of Labor s uncompetitive tax regime. These would-be employers are compelled to move their investment dollars out of South Australia because our land tax regime remains the most uncompetitive in the nation under Labor. Jurisdiction Top marginal rate (%) Since forming government in 2002, Labor has increased land tax revenues by almost 150%. The Government now collects $370 million each and every year in land tax. People who want to invest in property locally are having to look for projects in Western Sydney and other parts of the east coast, leading to jobs that could be created in South Australia being lost to other states. This is adding to the brain drain from South Australia which has already seen tens of thousands of talented young people leave our State because of a lack of jobs and opportunities. More than 181,000 people aged 15 to 34 have left South Australia since Labor was elected in 2002, with more than 51,000 having left the state, in net terms, over the same period. SA 3.70 WA 2.67 VIC 2.25 NSW 2.00 QLD 2.00 TAS 1.50 ACT 1.10 NT NIL National average 2.17 1. Based on property data, including current valuations obtained under FOI and historical averages of index values incorporated into threshold adjustments under Section 8A of the Land Tax Act 1936. A STRONG PLAN FOR REAL CHANGE 4

STEVEN MARSHALL MP State Liberal Leader www.strongplan.com.au Phone: 08 8363 9111 Email: steven@stevenmarshall.com.au A STRONG PLAN FOR REAL CHANGE 5