Over the last 12 months there have been significant changes to South Australia’s land tax regime. Below we provide an update to the changes and highlight some key deadlines.
Land held in discretionary trusts – Beneficiary Nominations – Due date extended to 30 June 2022
Under the new land tax rules, where land is held by a discretionary trust on or before 16 October 2019, the trustee has the option to nominate a designated beneficiary. This option was only available up until 30 June 2021, however Treasurer Rob Lucas recently announced that the due date would be extended to 30 June 2022.
Trustees of discretionary trusts will now have up until 30 June 2022 to nominate a designated beneficiary for land held by a discretionary trust on or before 16 October 2019, and that nomination can apply to their 2020/2021 land tax assessment and future years.
The land tax implications of nominating or not nominating a beneficiary may vary across groups and there are a number of requirements which must be considered before a nomination is made. Determining whether a nomination should be made may take time and as such we urge you to contact us if you believe a nomination could or should be made.
Once this deadline passes, there will be no further opportunity to make a nomination and if the trustee does not make a nomination by this date, any taxable land will be assessed at the trust surcharge rates. Where a beneficiary is nominated, the land held by the trust will be assessed at the general land tax rates (aggregated with any other land they hold).
We suggest contacting your Holman Hodge adviser before making any nominations.
For more information on nominations and land held on trust, please visit the RevenueSA website: https://www.revenuesa.sa.gov.au/landtax/lt_trusts
Land Tax Assessments 2020/2021
You may have already received your 2020/2021 Land Tax Assessment from RevenueSA. If not, you should expect to receive your assessment in the near future. RevenueSA has said they hope to have all 2020/2021 assessments issued by 30 June 2021.
We suggest you review your Land Tax Assessment to ensure that it is correct. Examples of items to look out for include:
- Checking that the land included on the assessment is actually owned by the entity receiving the assessment – Comparing the assessment with the Land Holding Declaration submitted to RevenueSA may assist with this
- Ensuring your principal place of residence is exempt and that the site value is not included in the Land Tax calculation
- For companies, ensuring that any aggregation is correct – Comparing the assessment with the Land Holding Declarations and Corporate Group Declaration submitted to RevenueSA may assist with this
Following the changes in the aggregation of land, transitional relief will be available to taxpayers who have an increase in their Land Tax Assessment for 2020/21, 2021/22 and 2022/23 because of the changes. The transitional fund for year 1 has been extended to 31 December 2021 given not all assessments have yet been issued.
For more information on the transitional funds, including eligibility criteria, please visit the RevenueSA website: https://www.revenuesa.sa.gov.au/landtax/lt_transitionfund/guidelines
Can we give you a hand?
If you have any questions or require any assistance in relation to Land Tax matters, please contact your Holman Hodge adviser.