South Australia has not implemented a foreign resident land tax surcharge at this time. However a purchaser of an off the plan residential property is not exempted from land tax if they are a foreign resident.
Generally the land tax structure in South Australia is as follows:
|Total Taxable Site Value||Amount of Tax|
|$353,000 to $647,000||$0.50 for every $100 or part of $100 above $353,000|
|$647,000 to $941,000||$1,470.00 plus $1.65 for every $100 or part of $100 above $647,000|
|$941,000 to $1,176 000||$6,321.00 plus $2.40 for every $100 or part of $100 above $941,000|
|Above $1,176,000||$11,961.00 plus $3.70 for every $100 or part of $100 above $1,176,000|
Exemptions (Standard) – Principal Place of Residence
- Where the land was the principal place of residence of the owner:
(a) a full exemption is available where:
- the land is owned by a natural person (whether or not he/she is the sole owner of the land);
- the buildings on the land have a predominantly residential character; and
- less than 25% of the total floor area of all buildings on the land are used for any business or commercial purpose (other than the business of primary production).
Only one property can be considered a person’s principal place of residence.
(b) a partial exemption is available where the first two full exemption criteria mentioned above are met and between 25% and 75% of the total floor area of all buildings on the land are used for any business or commercial purpose (other than the business of primary production). A sliding scale of exemption exists in these circumstances, ranging from 25% to 75% reduction in the taxable value of land. In this situation a Notice of Land Tax Assessment will indicate a taxable site value that is correspondingly less than the site value of the land as determined by the Valuer-General.
- Where the land is the intended principal place of residence of the owner, a two year exemption may be available where:
- the land is owned by a natural person (whether or not he/she is the sole owner of the land);
- less than 25% of the total floor area of all buildings on the land are used for any business or commercial purpose (other than the business of primary production);
- the person is, or will be, renovating or constructing a building or buildings on the land (see Note below);
- upon completion, the buildings on the land will have a predominantly residential character;
- the owner intends to occupy the land as their principal place of residence upon completion of the construction / renovation for a period of at least 12 months; and
- no rent was received by the owner in respect of the land for the two year period of exemption or the 12 month period of occupation.
In order to obtain the two year renovation / construction exemption on land, the owner must not be receiving the benefit of a principal place of residence exemption from land tax on any other land they own. In other words, an owner is only entitled to one exemption.
Where an owner does own two parcels of land, one of which is having a residence constructed / renovated, and the other is currently being occupied by the owner as their principal place of residence, the owner may nominate which property is to be exempt for the two year period.
The waiver/refunds discussed below can operate in addition to the exemptions discussed under headings 1 and 2 above. Please see the note under heading 3 below.
Waivers and Refunds with respect to Principal Place of Residences.
- Waivers from, and refunds for, land tax can apply for land which was, is, or is intended to be the owner’s principal place of residence, but only in certain circumstances.
Where an owner owns land at 30 June and the land becomes the principal place of residence of the owner after 30 June (i.e. between 1 July and 30 June in the year of assessment), a waiver of the land tax payable on that land may be available in either of the following two circumstances:
(i) where at 30 June a person owns land on which a home is either to be constructed or is in the process of being constructed for owner occupation during the financial year for which the exemption is sought;
(ii) where a person is in the process of selling and moving home and as a result owns two properties at 30 June:
- one of which is the current principal place of residence (and eligible for exemption) and the other is the intended but not yet occupied principal place of residence (and liable for land tax); or
- one of which was their principal place of residence (and liable for land tax) and the other is now their principal place of residence (and eligible for an exemption);
relief will be made available on both properties provided no rental income is received for either property during the period that the homes are owned concurrently and the former residence is sold prior to the end of the financial year in which the exemption on the new residence is sought.
- Where a person purchases a property, which was taxable in the ownership of the vendor (seller) and is to be occupied as a principal place of residence, the purchaser may be refunded any proportionate land tax paid as part of settlement. Again, the former residence of the person must be sold prior to the end of the financial year in which the refund is sought.
Effective from the 2008-09 financial year, where a minor interest in land has been disregarded under the Land Tax Act 1936, the holder of the disregarded interest is not eligible for an exemption, waiver or refund.
- From 30 June 2015, a full exemption is available where land held in a Special Disability Trust constitutes the principal place of residence of the primary beneficiary.
Exemptions (Standard) – Primary Production
If the land is situated outside the “defined rural area” of the state (i.e. predominately outside the greater metropolitan areas of Adelaide and Mt Gambier) a primary production exemption is available if:
- the land is 0.8 hectare or greater in area; and
- the Commissioner of State Taxation is satisfied that the land is used wholly or mainly for the business of primary production.
If the land is situated inside the “defined rural area”, besides meeting the two conditions mentioned above, further conditions apply depending on how the land is owned.
Exemptions (Standard) – Off the Plan
If you enter into a contract to purchase an apartment between 22 June 2017 and 30 June 2018, that is eligible for a stamp duty off-the-plan concession, you may be eligible for an exemption (in the interim paid by ex gratia) from land tax for up to five years from the date of settlement.
You do not need to apply for this exemption as it will be applied automatically for the first five years based on your stamp duty off-the-plan concession.
This exemption will cease for the following financial year if the apartment is sold before the end of the five year exemption period.
The land tax exemption does not extend to foreign purchasers.
Exemptions (Standard) – Motels, Hotels, Service Apartments and other similar accommodation
An exemption or partial exemption extends to motels, hotels, services apartments and other similar accommodation. The area used for the hotel, motel, set of serviced holiday apartments or other similar accommodation will be taken to be the area used for business or commercial purposes.
Subject to conditions, other exemptions from land tax include:
- land used for religious, hospital or library purposes;
- land owned, let to or occupied by an association whose objects are/include supplying assistance to helpless persons;
- land owned, let to or occupied by an association which receives an annual grant or subsidy from money voted by Parliament;
- land owned by an association whose object(s) is/include the conservation of native fauna or flora;
- land owned or occupied without payment by a person or association carrying on an educational institution not for profit;
- land owned by an association established for a charitable, educational, benevolent, religious, or philanthropic purpose;
- land owned by specific types of sporting or racing associations; an ex-servicemen (or their dependents) association; an employer or employee industrial association; an association for the recreation of the local community; an association for the hosting of agricultural shows or similar exhibitions; or an association for the preserving of buildings or objects of historical value on the land;
- land owned by a prescribed association or an association of a prescribed kind.
- An association is of a prescribed kind if it holds land wholly or mainly for the purpose of providing services or support to the community, or a sector of the community, in relation to literature, science, languages, the arts, the preservation of historical, traditional or cultural heritage, or for a similar purpose; or
- land owned by a prescribed body and used for the benefit of the Aboriginal people.
- land that is a caravan park;
- land that is a supported residential facility and licensed as such under the Supported Residential Facilities Act 1992;
- a retirement village occupied by a natural person as his or her principal place of residence;
- a retired persons’ relocatable home park occupied by a natural person as his or her principal place of residence; or
- land that is used as a residential aged care facility approved under the Aged Care Act 1997 (Cwlth.)
Land held by a trust
Pursuant to Section 13 of the Land Tax Act 1936, where a property is owned by an individual or organisation on behalf of a Trust, the owner(s) (Trustees) can apply to have that property assessed separately from other land owned by the Trustee in another capacity.
In order to have property held on behalf of a Trust assessed separately for a particular year, notice of the Trust must be provided in writing to the Commissioner within that financial year. If the trust is recognised by the Commissioner for that year, recognition will be ongoing, subject to any changes to the trust arrangements that necessitate the matter being reviewed. As qualified and professional tax advisor we work with you to achieve your goals and minimize your tax. Feel free to contact us at anytime.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)