The South Australian State Budget for FY2022 is coming off the back of landmark spending as part of the COVID recovery. However, with the improved budget position compared to initial forecasts, we have been spared any new tax increases as we saw in the Victorian State Budget.
The SA Government has also maintained its existing infrastructure commitments with significant spending committed to projects such as:
- The North/South corridor
- New Women and Children Hospital, and
- The new Riverbank Arena.
This conveys a very positive message for the growth of the state over the next budget period.
We have seen increased spending over the past year including in the form of payroll tax and land tax exemptions and deferrals and direct payments.
These significant reliefs have now ended (with the exception of the Land Tax transitional fund, which was increased during the COVID period) and there are no major new initiatives in this budget. Therefore, many businesses will now effectively face increased taxes now we are coming out of the COVID period and things return to normal.
There are some minor further announcements:
- Film production payroll tax concession: The current exemption for wages on film production will end from 1 July 2021
- Payroll tax exemption for trainees: The current payroll tax exemption for eligible apprentices and trainees will continue for an extra 12 months to 30 June 2022, and
- Land tax ‘build to rent’ reduction: There is a new land tax concession for new eligible (affordable) ‘build to rent’ projects commenced from 1 July 2021. This concession will offer a 50 per cent reduction in the land valuation for the purposes of calculating land tax from 2022-23 until 2039-40 financial years. We will need to wait to see details of which projects might be eligible.
There are also some important dates coming up in relation to existing tax rules:
28 July 2021:
- Last date to lodge the 2020-21 annual payroll tax reconciliation.
31 December 2021:
- Last date to apply for the land tax transitional fund. This fund provides the following reduction in land taxes:
- 2020/21 land tax: 100 per cent reduction in increase in land tax from the new aggregation provisions. (Does not apply to trust holdings. There are caps on the concession.)
- 2021/22 land tax: 70 per cent reduction in increase.
- Last day to make a beneficiary nomination for a transitional discretionary trust under the new land tax measures. This may lower the future land tax on a transitional discretionary trust.
The budget papers list out in detail the other spending measures.
Among these measures is:
- A $200 million extension over four years to the ‘Jobs and Economic Growth Fund’, and
- Around $30 million in extra funding over five years to support the film industry.
If, at any time, you have any questions as to how this budget impacts you and your business, please contact your local Bentleys advisor.
SA budget papers can be found at: https://www.statebudget.sa.gov.au/ (external website).
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.