SA Government’s controversial land tax bill wins support at $189m cost to budget

SA Government's controversial land tax bill wins support at $189m cost to budget
Written by The ReReport
As seen in the Source link, written by on 2019-11-29 08:46:02


November 29, 2019 08:46:02

The South Australian Government has finally won support for its contentious land tax changes securing enough votes late yesterday with a fifth revision to the bill.

Key points:

  • The Greens have given their support to a fifth version of the SA Government’s controversial land tax bill
  • The party was won over with promises of a public housing package worth more than $10 million
  • But the Opposition said the reform would make life impossibly difficult for South Australians

After giving early support to the changes when they were announced in June, the Greens wavered this week on the fourth version of the bill.

But the party was won over with promises of a package worth more than $10 million.

It includes more than $7 million a year for maintenance and upgrades to existing public housing, $2 million a year for emergency accommodation and transitional housing for people in need and a five-year trial of land tax exemptions for private houses rented as affordable housing.

The Greens also secured solar panels to be installed on 75 per cent of all existing public housing, and solar panels and batteries to be installed on at least 75 per cent of new public housing.

The final proposal costs the budget $189 million in the first three years, a far cry from the original land tax proposal five months ago, which was supposed to raise money.

Treasurer Rob Lucas said the long term tax reform was worth the cost.

“It’ll ultimately grow our tax base in South Australia,” Mr Lucas said.

“This is the biggest land tax reform in this state’s history.

“We’ve slashed the top rate of land tax from 3.7 per cent to 2.4 per cent, that’s going to attract investment, drive jobs growth and economic growth in South Australia.

“The bottom line in this is what is it going to do for the state’s future, it’s a huge benefit for the state in terms of jobs growth and economic growth.”

Greens leader Mark Parnell said while the law wasn’t perfect, the party was happy to be closing a tax loophole.

“This bill is by no means perfect, but the Greens are proud that we have managed to extract from the Government some important commitments that help those that are most vulnerable in housing,” he said.

“We’ve got money for emergency housing, we’ve got money for social housing, we’ve secured funding to put solar panels on the roofs of low-income households.”

‘Going to have real economic impact’

The proposed changes prompted a backlash from the property sector when they were first proposed in June, but the Government managed to get those groups onside by raising the top threshold for the tax while lowering the top rate from 3.7 per cent to 2.4 per cent.

The Property Council agreed to back the deal, after spending four months campaigning against the changes, which some of the state’s biggest businesses complained could lead to big tax increases for them.

Shadow Treasurer Stephen Mullighan said the land tax increases would “make life impossibly difficult” for thousands of South Australians who would now face a land tax bill “many thousands of dollars higher”.

“These are regressive land tax increases, they’re being applied retrospectively to people’s long-held land ownership,” he said.

“It’s going to have a real economic impact, it’s going to slow investment, it’s will slow housing development and it will slow the state’s economy.

“There is nothing fair about taking tens of millions of dollars from thousands of South Australians and providing that in tax cuts to the very top end of town.”