Australia: Norman Waterhouse - South Australian tax reforms mean more attractive investment opportunities

South Australia has implemented measures to reduce state transactional taxes, making SA one of the lowest taxing states in Australia for business.

The key reform overhauls the stamp duty regime. Foreign investors looking to purchase businesses or property in SA will benefit from the changes, particularly considering the increase in transactional costs following the recent FIRB reforms.

Stamp duty on the transfer of non-land holding shares and units and on transfers of all non-real property was abolished effective from 18/6/2015.

SA is the first Australian jurisdiction to abolish stamp duty on commercial real property transfers. Importantly, the concession will not apply to primary production land (although that land may be exempt under other provisions).

A one third reduction of duty applied as of 7/12/2015. A second reduction (amounting to two thirds) will apply from 1/7/2017. The total abolition of stamp duty will occur on 1/7/2018.

The following table represents the stamp duty payable across all Australian jurisdictions on the purchase of an $80 million commercial property at current rates: 

SA duty will further reduce to $1,459,038 from 1/7/2017 and be nil from 1/7/2018.

The reforms represent a significant reduction in the cost of investing in commercial real property (or business) in SA, which should be borne in mind when assessing the suitability and location of any substantial investment in Australia.

For further information, please contact Norman Waterhouse Partner Kale Rigano on (08)82101207 or krigano@normans.com.au.