South Australian Budget
The South Australia (SA) 2016-17 Budget was delivered on 7 July 2016 by the SA Treasurer. The following significant tax changes were announced, including:
- An extension of the small business payroll tax concession for a further four years
- An extension and expansion of the off-the-plan stamp duty concession for a further year
- Confirmation of the previously announced intention to cut Non-Residential Property stamp duty by a further third from 1 July 2017 and abolish it on 1 July 2018, and
An introduction of a wagering tax (15 per cent on net wagering revenue) from 1 July 2017. The key taxation measures and/or incentives announced in the Budget are as follows.
Extend and expand Off-the-Plan stamp duty concession
- The Off-the-Plan (OTP) concession is a full stamp duty concession on the transfer of a new apartment or substantially refurbished apartment for a contract entered into from 31 March 2012 to 30 June 2014 (capped at stamp duty payable on a $500,000 apartment) and a partial concession from 1 July 2014 to 30 June 2017.
- The OTP stamp duty concession will be extended and expanded for one year at a cost of $8 million.
- The concession of up to $15,500 will now be available to all new apartments across the State.
- This measure aims to support the building and construction sector. An estimated 800 apartment purchasers will benefit from the stamp duty concession.
Reduce and then cut Non-Residential Property stamp duty
- The Non-Residential Property stamp duty was cut by a third on 7 December 2015, and will be cut by a further third on 1 July 2017. It will be abolished on 1 July 2018.
- Up to 6,000 non-residential property transactions are expected to benefit each year.
Introduction of wagering tax
- A tax of 15 per cent will be introduced on net wagering revenue from bets placed in SA irrespective of the location of the wagering operators from 1 July 2017.
- The tax will apply to all bet types including horses, harness and greyhound racing, bets on sports, and bets on other contingencies.
- A tax-free threshold of $150,000 net wagering revenue per year will apply for all operators.
- These reforms are estimated to generate around $10 million per annum.
$500,000 per annum of this revenue will be used to help fund programs to address problem gambling.
- To try to promote economic growth and address the State’s high unemployment rate, a range of grants and concessions have been established. In particular, this includes grants for certain medium-sized businesses liable for payroll tax of up to $10,000 over two years, per new job created. This grant will operate from 2016 to 2018.
- Against the backdrop of a significant Budget surplus, there are significant proposals to commit spending to infrastructure projects. The SA Government has announced a $500 million upgrade for SA schools, which are forecast to commence by the end of 2016. A $527 million healthcare spend has also been announced.
- The Government also intends to privatise part of the Land Services group, which is responsible for processing land titles transactions. Options are also being considered to obtain some form of private sector involvement in other State-owned entities such as HomeStart.