2018-19 South Australian State Budget 

The 2018-19 South Australian Budget was delivered on 4 September 2018 by Treasurer Rob Lucas. A number of tax related budget measures were announced, including (amongst other things): 

  • Abolition of payroll tax from 1 January 2019 for businesses with annual taxable payrolls below AUD 1.5 million. For those businesses with annual taxable payrolls between AUD 1.5 million and AUD 1.7 million, payroll tax will be reduced.  
  • From 1 July 2020, land tax thresholds will increase from AUD 369,000 to AUD 450,000. A new marginal tax rate of 2.9 per cent for land tax ownerships valued between AUD 1.2 million and AUD 5 million will also be introduced. 
  • Expansion of the current stamp duty exemption for family farm transfers to include companies in addition to individuals and trusts.  It was also announced in the Budget there will be a reduction to the Emergency Services Levy (representing AUD 90 million per annum, or around AUD 145 per South Australian household), as well as capping council rate increases and capping Natural Resources Management Levy increases at a rate set by an independent body, or according to the consumer price index. 

State tax legislative developments 

The following State tax legislative developments occurred since our last update: 

  • The Revenue and Other Legislation Amendment Bill 2018 (QLD) was introduced into Queensland Parliament, which among other things, amends: 

– the Duties Act to give retrospective legislative effect to a number of beneficial administrative arrangements including extending the transfer duty concession for family businesses of primary production to all types of dutiable property used to conduct a primary production business, and to ensure that certain deregistered managed investment schemes can be treated as exempt managed investment schemes in particular circumstances 

– the Land Tax Act 2010 to give retrospective legislative effect to ensure that deceased estate land is assessed for land tax as intended, and 

– the Payroll Tax Act 1971 to update the rate used to calculate the exempt component of a motor vehicle allowance.  

  •  The Duties Amendment (Additional Duty for Foreign Persons) Bill 2018 (WA), which seeks to amend the Duties Act 2008 to implement a 7 per cent foreign buyers surcharge on residential property acquired by foreign persons from 1 January 2019, was passed by the WA Legislative Assembly and is now before the Legislative Council. 

Stamp duty decisions  The following stamp duty decisions were handed down since our last update: 

  • The Queensland Civil and Administrative Tribunal in Beach Energy Limited v Commissioner of State Revenue [2018] QCAT 270 has affirmed the decision of the Commissioner of State Revenue in relation to the assessment of transfer duty for the grant of a farm out agreement where the taxpayer sought  reassessment of the duty paid on the basis the farmout agreement was a cancelled agreement under s115 of the Duties Act 2001 (Qld). 
  • The Victorian Civil and Administrative Tribunal in Nikoiee v Commissioner of State Revenue [2018] VCAT 1425 has confirmed the decision of the Commissioner of State Revenue, finding that the taxpayer was liable for duty on the transfer on a property as the requirements of s34(1)(b) of the Duties Act 2000 (VIC) were not met. This provision provides an exemption for transfer of dutiable property from an apparent purchaser to a real purchaser where the property is vested in the apparent purchaser upon trust for the real purchaser who provided the money for the purchase of the property.  
  • The Victorian Civil and Administrative Tribunal in Astakhov v Commissioner of State Revenue [2018] VCAT 1363 has held that the taxpayer, a trustee of a discretionary trust, was not exempt from duty in relation to the transfer of beneficial interest in a property to themselves as a beneficiary of the trust, as the Tribunal was not ‘satisfied that the transfer is not part of a sale or other arrangement under which there exists any consideration for the transfer’ as required under s36A(1)(e) of the Duties Act 2000 (VIC). Consideration was found to exist in the form of the waiver of loans. 

Land tax decisions  The following land tax decisions were handed down since our last update: 

  • The majority of the Supreme Court of Victoria – Court of Appeal in Living and Leisure Australia Ltd v Commissioner of State Revenue [2018] VSCA 237 has dismissed the taxpayer’s appeal against a decision of the Supreme Court of Victoria in relation to whether the applicant was the “owner” of the land assessed to land tax in respect of land held under lease from the Crown. The Supreme Court had held that the taxpayer was subject to Victorian land tax as it was entitled to land under a lease of Crown land. The majority of the Supreme Court found that the taxpayer had a conferral of exclusive possession of the applicable property, and was the lessee of Crown land.  
  • The ACT Civil and Administrative Tribunal in Marks & Anor v Commissioner for ACT Revenue [2018] ACAT 84 has varied the Commissioner of Revenue’s penalty decision by imposing a 25 per cent (rather than 50 per cent) penalty tax for the taxpayer’s failure to pay land tax and their failure to comply with s14 of the Land Tax Act 2004 (ACT). The Tribunal was satisfied that the circumstances that resulted in the liability to pay land tax were ‘exceptional’, and that it would be fair and reasonable to remit the penalty tax.