The Real Estate Institute of South Australia says it will still oppose the state government's controversial Land Tax Amendment Bill, despite a lowering of the top land tax rate.

Earlier this month, the government released a draft of the bill that was first revealed in the June state budget, announcing it would reduce the top land tax rate from 3.7 per cent to 2.4 per cent from July 1 next year.

The bill also confirmed related companies will be grouped in order to prevent property owners splitting their portfolios to pay less land tax and outlined the State Taxation Commissioner’s powers as to what he will look into, to determine which companies are grouped together based on having the same controlling interests.

At a glance:

• The South Australian State Government has released the draft Land Tax Amendment Bill 2019, announcing it would reduce the top land tax rate from 3.7 per cent to 2.4 per cent from July 1 next year.
• The bill also confirmed related companies will be grouped in order to prevent property owners splitting their portfolios to pay less land tax
• The Real Estate Institute of South Australia has doubled down on its opposition to the bill in a statement to its members.

In a statement to its members, REISA said while there were "certainly a number of wins" within the bill, they predominantly applied to those persons who own parcels of land that are each valued above $1,098,001.

"We consider it hardly fair that the largest land holders in S.A, like Westfields and the large overseas investment funds buying our most expensive commercial properties, should get such a significant reduction in land tax whilst a regular investor with a handful of residential properties will pay for it," the Institute said.

"But more importantly, it is obvious that the Bill will impact our real estate industry as it concerns residential investment properties (including holiday houses) and small commercial properties (many of which are owner-occupier).  

"It will impact these properties because they are likely valued under $1.1m and if the owner cannot strategise how to structure their holdings and/or cannot afford the additional land tax, then they could be placed for sale and could have much lower demand."

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South Australian Treasurer Rob Lucas. Source: @rob.lucas

Since the bill was introduced on September 9, REISA and Commercial & Legal have met with the Treasurer, Rob Lucas, and the Opposition Leadership, Peter Malinauskas and shadow Treasurer, Stephen Mullighan. 

This followed a survey in which 93 per cent of REISA members said they did not agree with the plans laid out in this year's state budget.

REISA Board Director Robin Matters told WILLIAMS MEDIA they had made their position clear to the government but were not expecting an overhaul of the proposal.

"We went to them and said we think you should be a more innovative government and start with a blank piece of paper," he said.

"The government has opened the consultation period and they might tweak it round the edges, but there won't be wholesale changes.

"However, if it is defeated in parliament, they won't be re-submitting, which is probably the best outcome."

Parliament intend to table the proposed Land Tax Bill as early as October 15, with submissions open until October 2.

Click here for more information about the proposed changes to Land Tax.

By Sean Slatter

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