[COM] 231-243 Waymouth Street | 55m | 17lvls | Student Accom

[Llessur2002]

It wasn't really much to do with the building itself, more the tax and stamp duty paid on it when it was bought. Overall it's probably good news in terms of attracting new investments in the future.

Valuer-General loses appeal against Supreme Court decision on Waymouth St student building

It’s the student accommodation building that divided public opinion. Now it’s at the centre of a court case which could see hundreds of millions invested in South Australia.

A landmark court case involving one of Adelaide’s most controversial buildings has cleared the way for hundreds of millions of dollars to be spent on new student accommodation.

Foreign investors have been reluctant to invest in South Australia after a leading student accommodation provider, Scape, was charged $6.85m in state taxes for the purchase of a new building in the CBD.

The company was hit with $3m in stamp duty and $3.85 in foreign ownership tax in 2019 when it spent $55m buying the Waymouth St building – which was the centre of public debate over its “brutalist” architectural design.

Scape successfully challenged the imposition of the taxes in the Supreme Court, arguing the property deal should have been exempt because the building was used for student accommodation – not residential living.

The state government has lost an appeal against the decision, with three Supreme Court judges agreeing the building should not have been taxed by the Valuer-General.

The decision has been welcomed by Scape’s chief executive, Anouk Darling, who told a recent Property Council of SA forum that foreign investors were avoiding Adelaide because of its property tax regime.

Ms Darling said her company had $1bn of foreign investment funds to spend within Australia and was choosing other states ahead of SA.

“We have not been able to get capital investors to support new projects in Adelaide because of its stamp duty and taxes on foreign ownership,” she said.

“They don’t want to invest in South Australia.”

Ms Darling and Property Council of SA accommodation council executive Torie Brown commissioned a research company, Accenture, to investigate the demand for purpose-built student accommodation across Australia, including Adelaide.

Its report released this month found there were 13 overseas students for every bed available in student apartment buildings within the CBD, putting extra pressure on the state’s private rental crisis.

Ms Brown said the Supreme Court judgment clearing Scape of paying taxes on the Waymouth St building was “good, common sense”.

“It sets a precedent that will hopefully see more owners and developers of student accommodation enter the market and add much needed housing supply for students in Adelaide,” she said.

Ms Brown said international investors were interested in the Adelaide market, particularly with three major universities operating within the city.

“But we need to do more to incentivise investment and grow student bed numbers,” she said.

“If an investor is considering Adelaide they are also considering cities like Sydney, Melbourne and Perth, which have much more favourable tax settings.”

Contacted in Sydney for comment, Ms Darling also welcomed the court finding.

“Finally South Australia is once again a viable investment opportunity at a time when more student accommodation is desperately needed,” she said.

Ms Darling declined to comment further while the judgment remained subject to further appeal by the government.

From: https://www.adelaidenow.com.au/news/sou ... 30dd147d91