InDaily

Adelaide's independent news

Support

Govt floats land tax for all, no stamp duty

News

123 Comments
123 Comments Print article

Abolishing or reducing conveyance duty, to be replaced by a broad-based land tax, headlines “radical” options for tax reform the State Government will consider in coming months.

Premier Jay Weatherill and Treasurer Tom Koutsantonis this morning released a “discussion paper”, fleshing out a vague commitment to reform outlined yesterday in the Governor’s speech to parliament.

And they insist all taxes and levies — including their controversial Emergency Services Levy — will be under consideration.

“Everything’s on the table,” Koutsantonis told InDaily.

But he intimated if there were to be any reintroduction of remissions removed from the ESL in his last budget, they would likely be structured in a different way, to eliminate “inequities” whereby more expensive land attracted more generous remissions.

The discussion document does not advocate solutions, but floats options and invites community feedback between now and April. It’s unlikely to yield any policy prescriptions until after the Federal Budget is handed down.

Conveyance duty (primarily stamp duty) is chiefly in Labor’s sights; the paper points out it is “generally considered to be one of the least efficient taxes levied by the state, as it is a tax on transactions rather than value”.

“Replacing conveyance duty with another tax on property is generally considered most equitable as it would balance any impacts on asset prices associated with tax reform,” it says.

The impact of the broad-based land tax would mean “all owners of property pay an annual tax, not just when they purchase”, with a median value home to attract a tax of around $1200 a year.

Other options include levying land tax based on the “per square metre” value of land, which would increase efficiency but produce some inequitable outcomes with, for example, a small city property attracting a far higher per metre rate than a similarly-priced hills acreage.

Payroll tax is also up for discussion, with the Government inviting submissions on lowering or removing the tax-free threshold or replacing it with a “cash-flow tax”.

“While payroll tax is often seen by business as a tax on employment, studies … generally suggest the burden is unlikely to be borne by business in the long-run,” the paper states.

Instead the long-run effect is likely to involve “lower wages for employees and higher prices” for consumers.

houses

One idea for reforming land tax would see an average $1200 charge to all property owners.

The abolition of insurance tax is also on the table, as is gambling tax reform including uniform gaming machine tax rates.

Labor has not posited its own preferences, but stipulates social equity must be a priority.

“This system must be fair,” said Weatherill.

“Those who can least afford to pay should not be targeted…but we need to grow our economy.”

The paper also stipulates revenue neutrality: “Where (reform) would involve a significant loss of revenue we will also need to consider generating more revenue from taxes that are less damaging to economic growth.”

The Treasurer believes the tax reform process won’t be straightforward.

“This is going to be difficult,” Koutsantonis said. “It isn’t going to be easy … the Premier’s call us to be radical.

Weatherill said the tax system reforms were about unlocking the talent and energy to make sure South Australia succeeded.

Read the tax review paper here.

We value local independent journalism. We hope you do too.

InDaily provides valuable, local independent journalism in South Australia. As a news organisation it offers an alternative to The Advertiser, a different voice and a closer look at what is happening in our city and state for free. Any contribution to help fund our work is appreciated. Please click below to become an InDaily supporter.

Powered by PressPatron

Comments

123 Show comments Hide comments
Will my comment be published? Read the guidelines.

More News stories

Loading next article

Subscribe to InDaily – it’s free!

South Australia’s locally owned, independent source of digital news.

Subscribe now and go in the monthly draw* for your chance to WIN a $100 voucher!

Subscribe free here

*Terms and conditions apply

Welcome back!

Did you know it’s FREE to subscribe?

Subscribe now and go in the monthly draw* for your chance to WIN a $100 voucher!

Subscribe

*Terms and conditions apply