❓ Question regarding the financial impact and details of land tax reforms benefiting farmers, particularly concerning revenue forgone and amendments to the Duties Act family farm exemption. The answer clarifies the limited financial impact and provides details on upcoming legislative changes to facilitate farm transfers within families.
AnsweredQoN 1413Legislative Council
QuestionView source ↗
I refer to the Treasurer's media statement on 14 June 2018, entitled Land tax win for farmers under McGowan Government reforms , and I ask: (a) how many tax payers will be relieved of their land tax obligation from 2018-2019 under the proposed reforms; (b) what is the total revenue forgone in 2018-2019 and each year of the forward estimates arising from the proposed reform; (c) is this revenue loss reflected in the 2018-2019 budget papers as tabled by the Treasurer or is it a decision subsequent to the 2018-2019 State Budget; and (d) with reference to comments on amendments that will be made to the 'Duties Act family farm exemption', to what extent will the transfer of farms between family members receive relief from transfer duty costs?
AnswerView source ↗
Answered
22 August 2018
Responded by
Minister for Environment representing the Treasurer
Response time
8 days
The Department of Finance advises:
(a) The contract farming issue was identified by the Department of Finance’s State Revenue investigators conducting a targeted land tax primary production audit program. The audit program was suspended pending finalisation of the regulation. Consequently, the number of taxpayers who would have had their exemption removed is not known.
(b) The revenue foregone for 2018-19 and for each year of the forward estimates, whilst significant for the individual farmers affected, is estimated to be less than $1 million.
(c) A loss of less than $1 million in revenue would not significant enough to impact the Budget figures. That said, there is no revenue ‘loss’ to reflect in the Budget papers as no land tax assessments were raised for affected farmers following the abovementioned audit program. A loss would only be incurred where tax assessments were raised and a subsequent decision to retrospectively alter those assessments was taken by government.
(d) Full details of the Duties Act amendments will be available when the Bill is introduced into the Parliament later this year. An exemption from transfer duty will apply in circumstances where a farmer transfers a partial interest in a farming business to a family member. Under the current arrangements, the farmer must divest their entire interest in the business for the exemption to apply. The amendments will encourage the progressive transition of family farms to the next generation.
(a) The contract farming issue was identified by the Department of Finance’s State Revenue investigators conducting a targeted land tax primary production audit program. The audit program was suspended pending finalisation of the regulation. Consequently, the number of taxpayers who would have had their exemption removed is not known.
(b) The revenue foregone for 2018-19 and for each year of the forward estimates, whilst significant for the individual farmers affected, is estimated to be less than $1 million.
(c) A loss of less than $1 million in revenue would not significant enough to impact the Budget figures. That said, there is no revenue ‘loss’ to reflect in the Budget papers as no land tax assessments were raised for affected farmers following the abovementioned audit program. A loss would only be incurred where tax assessments were raised and a subsequent decision to retrospectively alter those assessments was taken by government.
(d) Full details of the Duties Act amendments will be available when the Bill is introduced into the Parliament later this year. An exemption from transfer duty will apply in circumstances where a farmer transfers a partial interest in a farming business to a family member. Under the current arrangements, the farmer must divest their entire interest in the business for the exemption to apply. The amendments will encourage the progressive transition of family farms to the next generation.
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