South Australian State Tax Changes – Budget 2017/2018
Market Insights
The South Australian Budget was handed down late last week. The table below summarises the key changes that you should be aware of.
| Measure | Legislation | Commencement Date |
| A levy of 0.015% on South Australia’s share of the total value of bank liabilities subject to the Commonwealth Government levy on major banks offering services in South Australia | TBA | 1 July 2017 |
| A stamp duty surcharge of 4% will apply to foreign purchasers of South Australia residential property | Stamp Duties Act 1923 | 1 January 2018 |
| The off-the-plan stamp duty concession will be extended until 30 June 2018 but will be retargeted so that it no longer applies to foreign purchasers | Stamp Duties Act 1923 | 22 June 2017 |
| A $10,000 grant will be provided to eligible off-the-plan apartment purchasers where the contract is entered into between 22 June 2017 and 30 September 2017 | First Home and Housing Construction Grants Act 2000 | 22 June 2017 |
| A five year land tax exemption will apply to eligible apartments bought off-the-plan where the contract is entered into between 22 June 2017 and 30 June 2018. The exemption will not be available to off the plan foreign purchasers | Land Tax Act 1936 | Midnight 30 June 2017 |
| Payroll tax rate for small businesses lowered to 2.5% | Payroll Tax Act 2009 | 1 July 2017 |
| Job Accelerator Grant payments increased by up to $5,000 for businesses that hire apprentices or trainees | Scheme start date 1 July 2016 |
Stamp duty
The 4% stamp duty surcharge on foreign purchasers and the removal of the off the plan concession for them, generally brings South Australia in line with the Eastern States. The 4% surcharge will come in on 1 January 2018. New definitions of who is a foreign purchaser will be included in the Act. It will naturally include individuals who are not Australian citizens or permanent residents as well as foreign registered or foreign controlled corporations. A trust will be foreign where the trustee; a person who has the power to appoint under the trust; an identified object under the trust; or a person who takes capital of the trust property in default is foreign.
A refund of the surcharge will be available where a person who is a foreign purchaser for the purposes of the surcharge at the time of entering into a contract, then ceases to be a foreign person not more than 12 months after the interest in the residential property was acquired.
The surcharge will be retrospectively imposed where a person, corporation or trust becomes a foreign purchaser within three years of the acquisition of the residential property.
Major Bank Levy
The more controversial measure is the Major Bank Levy which is in addition to the levy to be charged on the major banks by the Commonwealth Government. The Major Bank Levy will apply at a rate of 0.015% of South Australia’s share of the total value of bank liabilities subject to the Commonwealth Government levy at the end of each quarter.
South Australia’s share of relevant bank liabilities will be determined based on the value of South Australia’s gross state product (GSP) as a percentage of the value of Australia’s gross domestic product (GDP) as published by the Australian Bureau of Statistics for the most recent year available.
For the 2017-18 financial year, South Australia’s share of relevant bank liabilities will be set at 6.06%.
Payroll tax
The revised payroll Tax Structure as of 1 July 2017 will be:
| Annual Australian Taxable Payroll | Rate |
| Does not exceed $600 000 | nil |
| Exceeds $600 000 but not $1 million | 2.50% |
| Exceeds $1 million but not $1.5 million | variable from 2.50% to 4.95% |
| Exceeds $1.5 million | 4.95% |
This article was written by John Caravousanos, Special Counsel.
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