Yes, yes, it’s as inevitable as death and taxes, it’s the annual reminder about end of financial year planning.
However, this year in South Australia, there are more quirks and changes to consider, which is why we’re in the process of working with clients to adapt to this new environment.
Of particular note are:
- Further Stamp Duty reductions on commercial property purchases from 1 July 2017
- A reminder of the removal of Stamp Duty on business purchases and transfers
- The end of Stamp Duty concessions for off-the-plan apartments
- The need for developers to consider when to lodge Land Division documentation
Let’s do a quick summary of each.
Stamp Duty reductions- Commercial and Industrial property
On July 1, 2017, a further one third reduction in Stamp Duty will be applied to Qualifying Land, making this date worth noting if you are planning to enter into a purchase Contract.
By delaying until that date, you will benefit from a two-thirds reduction in Stamp Duty, compared to the one-third reduction currently in place.
Of course, Qualifying Land has a specific meaning, primarily this is land NOT being used for residential purposes or primary production.
Qualifying land is decided by the Land Use Code and the full list of LUCs is available in this PDF.
Please make sure you talk to us or your conveyancer as soon as possible because much rides on the date that is entered into the Contract, and not the date of the Memorandum of Transfer or the date that settlement takes place.
Goodbye to Stamp Duty- Business transactions
Some transfers are already free of Stamp Duty, namely business purchase or transfer transactions with “non-dutiable property”.
This means when purchasing or transferring a business, there will be no Stamp Duty payable on “non-dutiable property” which includes: items of plant and equipment that are not Fixed Items, goodwill, intellectual property, receivables, and transfers of statutory leases and licences.
However, duty remains payable on any transfer of Land (as defined) that occurs as part of a sale of a business transaction. This would include land, interest in land, and fixtures and items fixed to land, even if these items are not considered “fixtures at law”.
As you can see, there is still some complexity involved, hence our encouragement of making contact with us sooner, rather than later, so we can guide you with advice in a timely manner.
This PDF document contains more details about Stamp Duty and business transaction.
Stamp Duty concessions go off the plan
Time is running out, if you wanted to take advantage of Stamp Duty concesssions relating to buying apartments off-the-plan.
As it stands, the current set of stamp duty concessions for these purchases are scheduled to finish 30 June 2017 unless extended further in the 2018 state budget.
There is still a question mark on this issue in relation to the 2018 State Budget as there is a chance the concessions might be extended.
Developers- care to be taken
Developers need to be aware that with June 30 fast approaching they need to carefully consider when to lodge Land Division documentation. If they lodge documentation in the next few weeks and the plan is “deposited” at the Lands Titles Office the new allotments will attract rates and taxes from July 1 which could be a substantial extra expense that the Developer wasn’t budgeting on. “Deposited” essentially means the new allotments have been officially created at the Lands Titles Office as a separate legal piece of land.
If the allotments have already been legally created the Developer should make sure that any sale contracts that are in place for these allotments are settled prior to 30 June so any rates will be payable by the new owner and not the Developer.
As you can see, there are some changes in play but there are also all the usual disciplines and considerations required to see off another financial year.
Our team is ready to work with all clients including their Accountants and other advisors to help us all transition soundly into Financial Year 2018.