Land Tax overhaul (SA)

I find it very interesting to say the least.

If it really does come down to ~$1200 per property, this could be a boon for Adelaide prices. Stamp duty makes up a considerable % of deposits, particularly for the FHBer market. Removing this would increase borrowing affordability and would in my opinion lead to a potential surge in corresponding capital values.

If they can 'flatten' the rate and reduce the land tax liabilities being passed onto businesses, this would be better for the economy as a whole by reducing a significant cost on SA businesses.
 
Rogo202 said:
What are everybody's opinion of the proposed changes to the land tax system?

The article states that Stamp duty will be removed but Land tax will be increased and include PPOR (as far as I can tell).

http://www.news.com.au/national/sou...ew-sa-tax-system/story-fnii5yv4-1227215642171
Click to expand...

Good public policy - stamp duties are completely inefficient and distort behaviour/incentives. Increasing land taxes is a smart revenue generator - ACT are doing something similar.

Cheers,
Redom
 
Hey guys, just wondering as I already paid stamp duty on 2 properties will they be exempt from this new tax? Does anyone know how they will treat already owned properties?
Cheers
 
new2this said:
Hey guys, just wondering as I already paid stamp duty on 2 properties will they be exempt from this new tax? Does anyone know how they will treat already owned properties?
Click to expand...
It's just a discussion at this point AFAIK (so there's no definitive answer to your questions), chances are it would be phased in over years, not a flick of the switch and those who've recently purchased may get some sort of credit/temporary exemption.

More detail in the links: http://www.treasury.sa.gov.au/our-d...ms/state-tax-review-discussion-paper-released
 
new2this said:
Hey guys, just wondering as I already paid stamp duty on 2 properties will they be exempt from this new tax? Does anyone know how they will treat already owned properties?
Cheers
Click to expand...

That was my initial thought as well.
I have just moved into a new PPOR and payed around $23k Stamp duty. Would not be happy if I all of a sudden have to pay a yearly tax on top of it without some form of rebate from the tax I have literally just paid.

I agree with the above posts about its effect on house prices. It just increased everybody's affordability by the relevant percentage so I'm guessing the house price just went up with it. Kinda like the first home owners grant.
 
I wouldn't assume Commonwealth Treasury will support this without loss of the CGT discount AND CGT on homes.

People could then flip away and the property market would become a casino. Entry / exist taxes act to curb gearing risks and rapid flipping activities. Stamp duty is the incentive NOT to flip.
 
Paul@PFI said:
People could then flip away and the property market would become a casino. Entry / exist taxes act to curb gearing risks and rapid flipping activities. Stamp duty is the incentive NOT to flip.
Click to expand...

Which is why the Real Estate Institute are fully in favour of the proposal. :)
 
Paul@PFI said:
I wouldn't assume Commonwealth Treasury will support this without loss of the CGT discount AND CGT on homes.

People could then flip away and the property market would become a casino. Entry / exist taxes act to curb gearing risks and rapid flipping activities. Stamp duty is the incentive NOT to flip.
Click to expand...

They also act as a distortion to the free movement of individuals - there's been a lot of research into entry/exit charges stopping the free flow of labour, as the financial costs are incredibly prohibitive and only encourage inequalities in geographic employment opportunities.
 
Hi, I just put a post on the community forum.

This proposal needs to be violently objected to. I personally think that it is to raise money because the revenue from stamp duty has dropped drastically in the last few years. While I do not have the figures, I guess that house sales slumped in the last 5 years.

If I have to pay the new tax, I need to be reimbursed for all the stamp duty that I had paid in the last 10 years.

I can tell you it's a lot. Probably enough to pay the new tax for 40 years.

And yes, I normally do not take any activist role but on this, I am prepared to march on the streets!!

KY
 
Hi KY

We don't even have the details yet. You're assuming that they're not considering existing purchases.

Existing purchases may be exempt from new payment, either forever or for a certain number of years to make up for the payment.

All of us are just guessing based on the info given so far. No point making any decisions in either direction til more information is provided.
 
Redom said:
Good public policy - stamp duties are completely inefficient and distort behaviour/incentives. Increasing land taxes is a smart revenue generator - ACT are doing something similar.
Click to expand...

sorry? :eek:

dafuq planet are you on?

a capitalist government CANNOT tax it's way to prosperity - period. end of discussion. next topic please.
 
Corey Batt said:
They also act as a distortion to the free movement of individuals - there's been a lot of research into entry/exit charges stopping the free flow of labour, as the financial costs are incredibly prohibitive and only encourage inequalities in geographic employment opportunities.
Click to expand...

I doubt if home taxes limit unemployed people seeking work. Where there is work a void will be filled. In time !

Dropping entry taxes could create a problem if renters jumped into property as a rental alternative in regional areas to find the employer later close up...ie SPC Shepparton, Mitsubishi SA, Broadmeadows Vic as examples. Illiquidity would cause a poverty trap in those same areas. Prices would plummet with over supply and no demand. Entry taxes dampen cycles by limiting easy speculation. That a key policy issue the RBA keep raising.
 
Redom said:
Good public policy - stamp duties are completely inefficient and distort behaviour/incentives. Increasing land taxes is a smart revenue generator - ACT are doing something similar.

Cheers,
Redom
Click to expand...

ACT land isn't subject to rates as its not owned it is leased. There is no local government in the ACT. Land tax is a utility charge in the ACT and equates to council rates.
 
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