Oct 20, 2020 / News

COVID-19 / Land Tax

RevenueSA COVID-19 Land Tax Relief

Do you own and lease properties in South Australia, or are you an owner-occupier business and pay land tax? If so, you may be eligible for COVID-19 land tax relief.

The following relief is currently available:

1. Land tax relief for residential, non-residential landlords and owner-occupier businesses

• Period 1 relief – (applications now closed)
• Period 2 relief – (applications due by 30 April 2021)

2. Land tax reform transition fund

How can Nexia Edwards Marshall help you?

If you have any questions or require assistance with applying for land tax relief, please contact our South Australian Taxes expert George Papanicolaou or your Nexia Edwards Marshall advisor.

Below is a summary of the availability and benefits for relief:

1. Land tax relief for landlords

Period 1 relief

Availability

• Residential and non-residential landlords who provide rent relief to tenants impacted by COVID-19, or
• Residential and non-residential landowners who are unable to secure a tenant because of COVID-19, (i.e. land was leased to 30 March 2020 but has since been vacant due to impact of COVID-19).

Benefit

• Up to 25% reduction on the land tax payable on a parcel of land in the 2019/20 land tax (financial year)

Applications

• A separate application was required for EACH property
• Applications closed midnight 30 September 2020

Period 2 relief

Availability

• Residential and non-residential landlords who provide rent relief to tenants impacted by COVID-19, or
• Residential and non-residential landowners who are unable to secure a tenant because of COVID-19, (i.e. land was leased to 30 March 2020 but has since been vacant due to impact of COVID-19), or
• Commercial owner-occupier businesses who are eligible for JobKeeper payments from 31 October 2020 (either extension period 1 or extension period 2)

Benefit

• Up to an additional 25% reduction on the land tax payable on a parcel of land in the 2019/20 land tax (financial year)
• Residential and non-residential landowners – to be eligible for the full amount of land tax relief, the level of rent relief provided (or rent forgone from a vacant tenancy) between 31 October 2020 and 30 April 2021 (inclusive) must be equal to or greater than 25% of the land tax liability for the relevant property
• There is a lower level of land tax relief available which is equal to the value of the rent relief provided, if this is less than 25% of the land tax liability
• Relief is provided as either a credit to offset against a future land tax liability or refunded by cheque

Applications

• A separate application is required for EACH property, and in addition to any period 1 applications made
• Applications close midnight 30 April 2021

2. Land tax reform transition fund – 2020/21

Availability

• Relief is available to eligible taxpayers whose land tax bill will increase by more than $2,500 due to the changes in aggregation of land commencing 1 July 2020. The relief has increased from 50% to 100% of the increase in an eligible taxpayer’s 2020/21 land tax assessment
• If a taxpayer has an increase in land tax assessment above $102,500, they will not be eligible for any relief
• The relief will not be provided to trusts, (i.e. on higher trust rates that may be payable by trusts). And the taxpayer will need to be up to date with their land tax payments to be eligible to apply for this relief
• Relief is also available in future years, being 30% in 2021/22 and 15% in 2022/23

Benefit

The value of the relief will be calculated on the difference in land tax payable less $2,500, where the difference is the total land tax payable on all your aggregated SA properties owned in the current 2020/21 land tax year compared to the land tax that would have been payable on the same relevant properties1 under the previous land tax provisions and thresholds that applied in the 2019/20 land tax year

Example – assuming you meet all eligibility criteria, if the 2020/21 land tax assessment is $10k more than the previous 2019/20 assessment, the ‘transition fund’ benefit available for 2020/21 is $7,500.

Applications

• A separate application is required each year and available for three years
• Applications are due by 31 March following receipt of the annual land tax assessments

1: only includes properties owned by the taxpayer at the time the Land Tax (Miscellaneous) Amendment Bill 2019 was introduced to the Parliament on 16 October 2019 and are still owned.

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.