Commenting on the opinion piece: Closing the land tax loophole makes perfect sense
The author of this article equates the taxation of an income earner who has several jobs, with land tax payable by the owner of several properties.
This is unfortunately an incomplete portrayal of the system for several reasons.
Firstly, the holder of multiple properties does in fact pay income tax on the aggregation of returns from all the properties.
However, unlike the income earner, the property owner in addition pays land tax.
In terms of equity, a better comparison would be the owner of a principal place of residence on land worth millions of dollars who pays no land tax, with the owner of several rental properties who may well be paying tens of thousands of dollars in land tax.
Or similarly, the owner of a substantial share portfolio who pays no equivalent to land tax. The system is really quite inequitable.
The author also dismisses arguments by opponents to the change that investors will leave SA and invest in Victoria or NSW, pointing out that those states already have aggregation regimes.
It is correct to say that they have aggregation regimes; however the top rates of land tax and the thresholds at which they cut in are radically different to those that apply in SA.
South Australia’s top rate of land tax is 3.7% and applies to land values above $1.2 million. Victoria’s top rate of land tax is 2.25% and cuts in at $3 million. NSW’s top rate is 2% and cuts in at values above $4.2 million.
Looking a little further afield, Queensland’s top rate is 2.25% at a threshold of $10 million and the NT has no land tax at all.
The point being that South Australia’s land tax rates are unsustainably high, and the thresholds are unsustainably low.
Over the last 30 years or so SA has, as a place to do business, become quite uncompetitive with its interstate rivals.
If this change gets through we will indeed see an exodus of investment interstate, because it will even further reduce our states’ competitiveness as a destination for investment.
Finally, I find it remarkable that people who pay no land tax would like to see people who already pay tens of thousands of dollars in land tax pay even more. – John Wyk
I think this article is poorly researched, and not much thought given to the arguments provided for the land tax impost.
Here are the points that I believe have been poorly considered.
Property owners do pay tax. It is called stamp duty, which is on average about 4% – 5% of the value of the purchase.
Multiply this for each property purchased and it will add up to a considerable amount for some.
They also pay capital gains tax when the property is sold, and this can be as high as 49% of any profit made.
Therefore the comparison with a salary earner is a furphy.
How is it proposed that the property owner pay the land tax? Especially those that have property as an investment for their retirement.
Sure, they may be reasonably asset rich, but the income may not cover the proposed new land tax to be paid.
And how do they live from day to day if there is no or little positive income. Do they then have to go on the dole or the pension? And who pays for this?
I’m not a property owner affected by the proposed change so I am not speaking from a “hip pocket” reaction, but from a fairness point of view.
Contrary to some, I believe that property owners have had to work hard and take risks to better their lot in life.
I’m not suggesting that there shouldn’t be some sort of scheme like this, but it should be a much fairer way of taxing.
The current rates are astronomical. They were fine when they were devised many years ago, due to the value of properties then.
The rates should have been indexed a long time ago, as the increase in property values over the decades has pushed most into top tiers of land tax.
So, fair go. By all means look at aggregation, but make it fair and reasonable and have some sort of means by which people who don’t have the cash can pay. – Saverio (Sam) Ielasi
Why doesn’t SA follow Queensland’s lead by the changes to their state’s land tax, where a new surcharge for foreign companies or trustees of foreign trusts commenced 2019/20 financial year.
These changes mean that a foreign company or trustee of a foreign trust for land tax purposes at 30 June 2019 will be subject to an additional 2% land tax surcharge.
Makes sense to me. Hit the foreigners in the hip pocket and leave the hard working South Australian citizens alone.- Anastasia Mallios
Commenting on the story: ROBOFLOP: Push for ban after another Lib phone poll gaffe
Does Stephen Marshall think that robo calls between 6-15 and 7-15 pm, disturbing meal times, are more acceptable than those spruiking his party at the crack of dawn?
And if his ire had really been ignited, as stated in the article, I expect language a bit stronger than ‘unacceptable’ and ‘dissatisfaction’.
I’m often subjected to ridiculous and repetitive Captchas to prove I’m not a robot, but it seems the robots on North Terrace have free rein.
Furthermore, why is control of robocalls a federal matter – is this stated in the Constitution?
Not that I think it should be a state matter,as there are already far too many issues that are decided by states at great cost and confusion. – Alan Strickland
I cannot believe that the Government is using this type of communication.
As an older person in the community I get very frustrated by these calls.
I contacted Rebekah Sharkie’s office the other day about these nuisance calls. We have gone on to the Do Not Call Register once again.
We have someone saying “This is Nicolle, your NBN will be cut off.” This will be to our landline.
We hang up and then they call my mobile and then my husband’s mobile. Surely in this day and age this should not happen. – Diana Boyd
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