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Increased taxes on properties are making South Australia even less attractive to investors according to the Property Council of Australia, amid the collapse of several home building companies in the past year.
Key points:
- The SA Valuer-General is doing its first big property revaluation in 20 years
- The Property Council says changes to land tax calculations make the state less attractive to investors
- Eight home builders have collapsed in the past year
A review of property valuations by the Valuer-General is expected to increase SA Water and Emergency Services Levy bills as well as land tax on individuals properties.
They are all calculated based on property values.
Many councils throughout the state are also putting up their rates above previous expectations to cover a 40 per cent increase in the solid waste levy announced in last week’s State Budget.
Local Government Minister Stephan Knoll confirmed this morning that some people would see a 40 per cent increase to the valuation of their property under the Valuer-General’s first big push to revalue properties in 20 years.
The Valuer-General is conducting a trial in the Unley, Walkerville and Adelaide Plains councils to re-evaluate all properties rather than incrementally increasing them in line with sales.
“There are a small number of people that will see a significant change,” Mr Knoll told ABC Radio Adelaide.
“That is the consequence of this revaluation initiative and that does flow through to the cost of living.
“Certainly it is an issue and one we’re very cognisant on, but given the Valuer-General is independent and has to undertake this initiative because of a contract signed by the former government we’re in this invidious position.”
Labor denied the revaluations were connected to the privatisation of the Lands Titles Office in 2017.
“This can be stopped today — it doesn’t need to continue,” Shadow Treasurer Stephen Mullighan said.
Property Council SA executive director Daniel Gannon said people should appeal valuations if they objected to them.
“Owners of property across South Australia should absolutely double-check the value,” he said.
“They should object if they believe it’s warranted because what we can see moving forward is a big sting in the tail of property owners when it comes to property valuation.”
Land tax changes ‘a hit’ on investment
The State Government also announced last week that it would be cracking down on property owners splitting their properties between trusts and family members to lower their total bill.
Mr Gannon said the change would increase some land tax bills by 2,000 per cent.
He said South Australia’s maximum 3.7 per cent land tax was the highest in the country.
“We’ve taken a hit the last 10 days in terms of our attractiveness when we should be going out of the way to make our state the most attractive to investment,” he said.
Treasurer Rob Lucas said he hoped the crackdown would generate $40 million in extra revenue.
“This measure is aimed squarely at closing a loophole that may encourage some landowners to form complex ownership structures designed purely to avoid paying land tax,” he said last week.
Council rates going up
Over the past week, at least nine councils have put up their rates higher than they had planned to cover the increase in taxes on rubbish going to landfill.
Adelaide’s second-largest council the City of Salisbury, will increase its rates by 2.9 per cent instead of its planned 2.5 per cent.
“We’re being very aware that we didn’t want it to go up, but we didn’t want any of our residents to lose any services,” Salisbury Mayor Gillian Aldridge said.
Holdfast Bay and Campbelltown councils will not increase their rates above what was planned before the State Budget was handed down.
Treasurer Lucas said there were “very good environmental reasons for increasing the levy”.
“We can’t afford to continue to just dump more and more waste into landfill,” he said.
Another builder hits the wall
The price hike came as news broke that another builder had collapsed in South Australia.
D&C Homes yesterday became the eighth South Australian building company to go under in the past year.
The home builder went into liquidation, leaving dozens of creditors owed money and homes unfinished.
Master Builders Association chief executive Ian Markos said a five-point plan it presented to stimulate the industry that was presented to the State Government before the budget was ignored.
It included lowering costs of new houses, such as getting rid of the requirement for a rainwater tank.
“They’ve been given the solutions by the experts and they should be coming to the table and looking at how they can implement this and that would include hurrying along to finalise the planning reforms in this state — they’ve been going on for a couple of years now,” Mr Markos said.
Mr Gannon said the failures were related to the companies growing too quickly and “not having enough business acumen” rather than a general problem in the sector.
“The problem with the State Government revaluation exercise and the land tax aggregation proposal is together these policies will make a bad problem worse,” he said.
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