Real Estate Institute of South Australia General Manager Andrew Shields says he aims to meet with the government "in the next week or so" to discuss proposed changes to land tax aggregation in the state, following the release of survey results showing REISA members are overwhelmingly opposed to the reforms.

As part of its 2019/2020 Budget, the South Australian Government pledged to introduce a new ‘aggregation model’ for land tax purposes from July 1, 2020, to ensure a more “level playing field’’ for taxpayers.

Based on similar models in NSW and Victoria, the changes include a shift to aggregating based on an owner’s interest in every piece of land, rather than only aggregating properties held in the same ownership structure, as well as introducing provisions to allow two or more related companies to be grouped for land tax purposes.

REISA Land Tax Survey results - at a glance:

• 93 per cent of all participants did not agree with the proposed land tax aggregation laws.
• 78 per cent of participants owned investments properties (other than their marital home) and 41 per cent owned properties in excess of the $1.3m threshold which imposes significantly higher land tax rates.
• The biggest reason selected for not supporting the new laws was because of concern it would affect the potential investment growth and doing business in South Australia.

The announcement prompted REISA, in conjunction with Commercial and Legal, to issue surveys to REISA members and the broader real estate community, the results of which were released today.

Of the more than 400 respondents, 93 per cent did not agree with the proposed land tax aggregation laws, with 78 per cent owning investment properties (other than their marital home) and 41 per cent owning properties in excess of the $1.3 million threshold which imposes significantly higher land tax rates.

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REISA General Manager Andrew Shields. Source: REISA

Mr Shields told WILLIAMS MEDIA the results were "completely expected".

"We're in a situation where we are one of the most taxed states in Australia and this just serves to increase that," he said. 

"It's a worrying trend in terms of what happens to the investment market.

"I was at a meeting the other day with the Property Council and some substantial landholders, and they were talking about disinvesting, which could lead to a situation where we are completely uncompetitive in the market."

The majority of participants in the survey believed that the introduction of the new laws would result in landlords selling off properties impacted by the additional land tax, and/or will look cease property investment or look to invest outside of South Australia.

A further 97 per cent voted for the REISA to use its position of influence in the South Australian real estate community to strongly advocate for members' industry views to the State Government.

In a statement to its members, the institute said intended to meet with the Premier Steven Marshall, the Hon Rob Lucas (Treasurer) and other relevant Members of Parliament to "convey the position of the real estate industry and the real concerns identified for our property market".

Mr Shields identified grandfathering, a lowering of the rate, and a simplification of the tax as discussion points for the meeting.

"Obviously, there are different levels at which people are taxed, but if you broaden that out and have a lower rate, it would be more reasonable taxation," he said.

"We haven't heard any feedback from the Liberal Government in relation to its proposals, which is half the battle.

"Right now, we have ideas and a proposal we have tabled, but we don't know the details."

Click here for more information on South Australia's proposes changes to Land Tax.

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