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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2008-11-13 Daily Xml
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LAND TAX

The Hon. J.A. DARLEY (14:44): I seek leave to make a brief explanation before asking the Minister for Mineral Resources Development, representing the Treasurer, questions about land tax.

Leave granted.

The Hon. J.A. DARLEY: Land tax accounts are progressively being sent to owners based on revised valuations made by the Valuer-General. I understand from the budget papers that total land tax receipts are to increase by 37½ per cent this year.

Recent examples of increases reported to my office are as follows: $90 last year compared to $66,000 this year; $164,000 last year rising to $740,000 this year; $6,000 last year rising to $26,000 this year; and $1,000 last year rising to $15,000 this year. Most property owners are shocked by the steep land tax increases and advise that they have not been able to budget for them. I have been advised that, even for a modest, one-bedroom flat rented to low-income tenants, the rent will need to increase by about $30 a week due to increases in rates and charges.

I have also been advised by a number of large and small businesses and property owners that they are now seriously considering selling their properties and relocating their investments and businesses to Victoria due to the draconian land tax regime in South Australia. My questions are:

1. Will the Treasurer give an assurance that the Commissioner of State Taxation will give sympathetic hearings to owners struggling with huge land tax bills?

2. Will the Treasurer give an assurance that the 25 per cent penalty for late payment will not be applied where owners make reasonable arrangements to pay their land tax?

3. Will the Treasurer give these assurances before the expiration of the due date for the first quarter's payment?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:46): I thank the honourable member for his questions and I will refer them to the Treasurer for his response. The honourable member, in his question, did not indicate whether the increases he was talking about were for a single property or whether they were as a result of some changes made to land tax legislation to deal with avoidance schemes centred around a conglomeration of properties because, clearly, that would have some impact.

We are well aware that there have been significant increases in the value of land over the past 12 months. Indeed, I think South Australia is one of the few states where in recent months, compared to other states, the value of residential properties has grown. Of course, we also know that, in recent months, due to problems in the world financial sector, property prices are likely to fall. Given that the land tax rates and thresholds have not been altered, it means that, if property falls (as it may well do in the future), the land tax would also fall. Of course, there is a bit of a lag but, certainly, the owners of land for which land tax is applicable do get a benefit. When land tax is rising it takes some time before that rise catches up and, similarly, when the price of property falls obviously the tax that is paid will eventually catch up and those falls will catch up with property values.

There are some details in relation to those raw figures that need to be explored before one draws any conclusions. However, I will refer those important questions to the Treasurer and bring back a reply.

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