- South Australia update
The Planning Development and Infrastructure Act 2016 (SA)
The new Planning Development and Infrastructure Act 2016 (SA) was passed on 12 April 2016 and will gradually come into operation over the next five years.
The legislation is set to significantly reform the state planning system with the following measures:
- A superior framework for long-term planning
- Enhanced ways to engage South Australians
- A greater focus on design quality
- A clearer rulebook
- Better-quality processes leading to quicker decisions
- Restored coordination and infrastructure delivery.
The Act also reinforces shared responsibilities of government, local councils, industry and communities, while greater legislative clarity should drive investment and deliver improvements to planning and development outcomes across South Australia.
New developments and CBD infill initiatives are set to impact property investment returns in the future.
In a bid to infill inner and middle-ring suburbs, the government is exploring policies to counteract low population density. Higher-density living lowers public transport expenses and rejuvenates city retail and commercial life, some results of which can be seen even now.
Despite some decline in value, Adelaide’s outer suburbs are also benefiting from infrastructure development in the form of new shopping facilities and significant road works. Over the longer term these initiatives will help support value in outer metropolitan locations.
Stamp duty concession for off-the-plan sales
The state government has announced it will continue its stamp duty concession for off-the-plan apartment sales and will further apply the concession to all off-the-plan sales across South Australia, not only in the Adelaide CBD. As a result, first home owners could be eligible for a $30,500 saving by utilising stamp duty concessions of up to $15,500 coupled with the $15,000 First Homer Owner Grant for new homes. The $7.6 million announcement is targeted at stimulating growth in the property sector.
Land tax developments
Revenue SA has clarified their interpretation and application of s. 13(3)(b) of the Land Tax Act 1936 (SA), concerning the aggregation of multiple properties in assessing land tax liabilities. Per Revenue Ruling LT004, Revenue SA will now impose land tax on the aggregated site value of all properties held by the same taxpayer on trust for the same beneficiaries.
In other words, the taxpayer’s land holdings will be aggregated regardless of whether the taxpayer holds real property in its capacity as trustee for multiple trusts. While the ruling refers primarily to the application of discretionary trusts, it could also have equal application to fixed trusts, unit trusts and self-managed superannuation funds.
Tax reform continues apace in South Australia. The reforms will take South Australia from the second-highest taxing state in Australia to the second lowest, a move which is hoped will boost the state’s economic performance. Indexed land tax thresholds, including an increase in the tax-free threshold, coupled with stamp duty reductions (and eventual abolishment), are part of the reforms.
South Australian growth trends
The ABS monthly building approvals figures were recently released for April 2016. In SA alone there were 1,153 approvals – an increase of 13.7 per cent from the previous month and a considerable 30 per cent increase on the same time last year – an indication of the level of development currently occurring in South Australia as a result of the government’s policy reform.
Overall, reliable growth, ongoing demand and solid returns are highlighting Adelaide as an investor hot spot.