Tax insights from the South Australian State Budget 2024-25

Key features of the SA Budget include cost of living relief for families and individuals, and a focus on health, housing and jobs. Businesses will benefit from Round 2 of the Economic Recovery Fund with grants for eligible small businesses and not-for-profit organisations. Non-government organisations will be assisted with rising costs.

Looking at tax matters in particular, Bentleys SA Partner Simon How provides expert insights into new measures introduced.

Summary of taxation measures

The 2024 SA State budget includes two new tax measures:

  • The abolition of property value thresholds for eligible first home buyers accessing the stamp duty exemption and the first home-owner grant; and
  • Bulk billing exemption form payroll tax for General Practitioners.

We did not see any further changes to land taxes or stamp duties given the impact of increasing property valuations over the past few years. However, the thresholds for land tax will increase in line with existing provisions from 1 July 2024 as follows (this does not include the 0.05% trust surcharge for property held in trusts):

Threshold rate2023-20242024-2025
Tax-free threshold$668,000$732,000
0.5% threshold$668,000 - $1,073,000$732,000 - $1,176,000
1% threshold$1,073,000 - $1,561,000$1,176,000 - $1,711,000
2% threshold$1,561,000 - $2,500,000$1,711,000 - $2,738,000
2.4% threshold+$2,500,000+$2,738,000

The budget also announced a further $20m to fund grants between $2,000 and $50,000 for small businesses to invest in energy efficient equipment or improvements to manage their energy costs.  Applications are expected to open in August 2024 through https://www.treasury.sa.gov.au/Growing-South-Australia/economic-recovery-fund and will be administered on a first-come-first-served basis.

Abolition of stamp duty for first home buyers and extension of first home owners grant

First home owners were previously able to access stamp duty relief where a new property cost less than $700,000 ($450,000 vacant land) and the first home owner grant for a property costing less than $650,000.

This budget removes these thresholds and makes the stamp duty exemption and first home owners grant available for all acquisitions by eligible first home owners on contracts entered into on or after 6 June 2024.

For example, where an eligible first home owner acquires a new residential property for $800,000 on 7 June 2024 they will receive a benefit of:

  • Stamp duty exemption:             $37,830
  • First home owner’s grant:         $15,000
  • Total benefit under new rule:     $53,830

The requirements to access the first home owner concession are:

  • The owner is a natural person 18 years or older.
  • The owner is an Australian Citizen or permanent resident.
  • The owner and their spouse must not have received stamp duty relief in any State and/ or previously owned an interest in Australian residential property occupied for at least 6 months.
  • The owner must occupy the property as their principal place of residence for a continuous period of at least 6 months within 12 months of when the property can be occupied.

Where the property is vacant land, you must move into the property at the earlier of 12 months from a certificate of occupancy being issued or within 36 months of land settlement.
The property must be a new property acquired as:

  • A new home – being one that has not previously been occupied.
  • An off-the-plan apartment.
  • A house and land package; or
  • Vacant land to build a new home.

The measures also give relief from the foreign ownership surcharge for foreign first home buyers.

Bulk billing payroll tax exemption

The SA government has accepted the outcome of court decisions in NSW which apply payroll tax to payments made to medical practitioners engaged by medical centres to deliver services to patients. The government has previously provided an amnesty for years up to 30 June 2024 for practices that applied for the concession up to 30 November 2023.

The SA government has announced a permanent exemption from payroll tax for the proportion of fees which the medical practitioner bulk bills to its patients. This is to encourage bulk billing of patients and to protect bulk billed patients.

Many medical practices have already considered the impact of the payroll tax decisions to their practices and have sought advice on how to best structure their practices going forward. Please let us know if you would like to discuss the impacts on your medical practice.

Please contact your Bentleys advisor for more details on how the Budget will affect your business. For more information you can also access the RevenueSA information at https://www.revenuesa.sa.gov.au/latest-news/2024-25-state-budget

We are here to partner with you to navigate the challenges the next 12 months presents. Please contact your advisor to discuss your situation or contact us via the general enquiry form.

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.

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