Many business and property owners will be forced to sell up if controversial changes to South Australia's land taxes go through, the state's peak business group says.
Business SA says a survey has revealed 60 per cent of business operators believe the tax changes will affect their operations, and 76 per cent of them believe they will have to sell.
“In the past, property was considered a safe investment option for our retirement savings and to diversify risk, but business owners across the state are telling us they’re going to sell their assets and many are even considering investing interstate because they can’t afford to absorb the land tax aggregation increases.”
“The results show us that land tax aggregation changes will affect the whole state, from retailers who lease their space to truck drivers who might own their workshop, and mum and dad small business owners who have diversified their risk by buying a rental property,” chief executive Martin Haese said.
The government’s changes, announced in this year’s budget, seek to close a loophole that allows people with multiple properties to pay minimal tax by using complex ownership structures including trusts.
The government expects to bring in an extra $40 million a year with the new measures.
But it says other changes to tax rates will reduce its total land tax take in coming years.
It has also indicated it is willing to consider the concerns of stakeholders before introducing the new arrangements in July next year.
But Mr Haese said the state’s businesses were facing a triple whammy of increased property valuations, the land tax changes and a tax rate that was already too high.
“This trifecta will put pressure on the entire state’s economy, including property owners flooding the market with commercial and residential properties, developments being put on hold and supply chains being disrupted,” he said.
“If the government doesn’t act now to delay the introduction of the tax or introduce a rate competitive with the other states, South Australia’s business community will suffer significant damage at a time when they’re still facing high operational costs.”
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