What is Land Tax? 2019-20 Financial Year


Welcome to RevenueSA’s educational video
series. In this video we will outline what is land
tax and how it is calculated. We will also highlight some of the exemptions that are
available and where to go for further information. Land tax revenue collected is used by the
Government to fund the provision of essential services including, public health, education,
and law and order for South Australian citizens. Land tax is levied each financial year and
is determined based on the ownership and usage of land as at midnight, the 30th June immediately
prior to the financial year commencing. The owner as at midnight, the 30th June is
liable for payment of land tax for that financial year. If the property is sold after the 30th June,
generally an adjustment will be made by your conveyancers and you may be required to pay
a proportion of land tax at settlement. Where there is more than one owner, each owner
is jointly and severally liable. This means that each owner is liable for the full land
tax liability, regardless of their share in the land. Land tax is calculated on the site value of
the land. The site value is obtained from the Valuer
General’s Department and is the value of the land excluding any added buildings or
other improvements. Basically, it is the value of the land as if it were vacant. The site values of all taxable land owned
in the same land tax ownership will be aggregated, or added together, to determine the land tax
payable. If you only own one taxable property, the
site value of this land will be used to calculate the land tax payable. If you own two taxable properties, the site
value of both of these properties will be added together and land tax will be calculated
on the sum of the site values. If you own multiple properties, the site values
of all the properties in the ownership will be added together and land tax will be calculated
on the sum of the site values. A tax-free threshold applies to each land
tax ownership. This means if the aggregated site value of all taxable properties in an
ownership is below the threshold, land tax will not be applied. The current tax-free threshold is shown. Land tax is calculated using a progressive
rate structure which takes into account the tax-free threshold. The current land tax rates are shown. These are subject to change each financial
year and will increase if there has been an overall increase in land values in South Australia. So let’s now have a look at a few examples. In scenario one, only one taxable property
is owned which has a site value of $300 000. As this is below the tax-free threshold, no
land tax will be applied. In scenario two, two taxable properties are
owned, each with a site value of $250 000. The total site value is $500 000, which falls
within the first rate level of land tax. In this scenario land tax will be calculated
on the additional amount above the tax-free threshold. Resulting in a land tax liability as shown
in green on the screen. In scenario three, four taxable properties
are owned, each with a site value of $450 000. The total site value is $1.8 million which
falls within the fourth and highest level of land tax. Land tax is calculated by: identifying the pre-determined tax liability
for that level; applying the rate to the additional amount
above the commencement value of the tax level; and then
adding these two sums together; resulting in a land tax liability as shown
in green on the screen. A number of exemptions from land tax are available,
for example, principal place of residence, primary production, hospitals, charitable,
educational, benevolent, religious or philanthropic, native fauna and flora, associations and libraries.
While some exemptions will automatically be raised based on the land use of the property
as determined by the Valuer-General, others require an application. Further information regarding land tax exemptions
is available on revenuesa.sa.gov.au. For more Information go to revenuesa.sa.gov.au
and select Land Tax from the Taxes, Duties and Levies menu. Online calculators are available, which will
calculate land tax for you. That brings us to the end of this educational
video. If you require any additional assistance,
please contact us.

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