As public submissions closed on 2 October on the state government’s controversial land tax bill, SACOSS called on the government to stand firm in tightening aggregation provisions to prevent land tax avoidance.
SACOSS CEO, Ross Womersley said, “The proposed changes to the legislation to stop tax avoidance are good, sensible policy – both for fairness and to limit existing incentives that encourage investors to ‘crowd out’ low income and first-home buyers in the housing market.”
“The government’s own figures show that there are around 6,000 South Australians currently homeless, 56,000 households can’t get affordable housing and there has been a decline of around 20,000 social housing tenements over the last 25 years.”
SACOSS further called for the government to halve the tax cuts designed to appease property owners and instead use these funds to invest in a genuine property boom – in much-needed public and community housing.
“The government’s bill goes way too far in reducing the top tax rate by a third and essentially gives away revenue that is desperately needed for other housing uses. Investors with multiple holdings don’t need to be compensated for taxes they have simply been able to avoid in the past.”
By halving the tax cut to those with property holdings of over $5m, and increasing the surcharge designed to ensure tax is not avoided, SACOSS believes that at least $20-30m dollars per annum could be directed into rebuilding our public housing system.
The formal recommendation of the SACOSS submission is that the land tax bill be amended so that:
A version of the tax bracket proposed in the 2018-19 budget is retained, with the marginal tax rate on holdings over $5m set at 2.9% (down from the current 3.7%, but above the proposed 2.4%)
The land tax surcharge on trusts is doubled to 1%; and
The extra revenue garnered from these changes be invested so we can reverse the enormous decline in public and community housing.
“Our submission shows that we can reform the legislation to provide a significant investment in public and community housing. This reform will help to put a roof over the heads of people who have been striving for one, while still reducing the top rates of land tax and making the system fairer.
“Changes to the land tax aggregation will be good for the housing industry, good for the economy and good for South Australia – we just need the political good will.”
The full submission is available here.