It Depends – Queensland land tax changes (Part 1)

Update: Land Tax Changes Have Been Scrapped

The planned changes to the Queensland land tax regime highlighted in the article below have been scrapped by the Queensland Premier in an announcement made on 30 September 2022. We will provide further updates as they become available.

Queensland’s land tax changes are so significant that we are going to cover them in two ‘It depends’ videos. In part one, senior associate Tom Walrut covers what the changes are and how they will affect current landholders.

Video Transcript

Hi, my name’s Tom Walrut. Welcome to this week’s edition of It Depends where we’ll be looking at our first part of a two part series on the new Queensland land tax changes. So, in this part one we’ll be looking at what the changes are and how they’re going to be affecting current landholders. And in part two, we’re going to be looking at what landholders can do for their current landholdings and what they can do for any future acquisitions to manage these land tax changes.

What are the land tax changes?

So from 30 June 2023, land tax in Queensland is going to be assessed by reference to an entity’s Australia wide landholdings. Practically what that means is they’re going to determine the entirety of the value of all the Australian landholdings of that entity. They’re then going to apply Queensland rates and land tax threshold to determine the amount of tax payable. And then there’s going to be an apportionment by reference to the proportion which the Queensland value plays against the total Australian value.

How will the changes affect landholders going forward?

So, how are these new land tax changes to affect landholders going forward? Well, it depends. For Queensland based landholders with solely Queensland land assets there’s not going to be much of a change. So, good news for them. The bad news is for the multi-jurisdictional landholders that is anyone with a Queensland landholding and interstate landholdings in the same entity. Practically what this means is that if you as an entity have Australia wide landholdings in excess of $600,000 for individuals or $350,000 for trusts, companies or absentees, you can expect an increase in your land tax bill. Luckily, there are some exemptions which will still apply for land tax purposes on this Australia wide land valuation problem. Those exemptions however are limited solely to the Queensland based exemptions and as they apply to all Australian land. So, for example, if you have an exemption from land tax or land used as a boarding house in New South Wales, Queensland doesn’t have a similar exemption for that. So, the entirety of that land value is still included in your land tax threshold. Notably as well surcharge in Queensland for foreigners will still apply on the basis of the land tax assessments as a result of these changes. So, that’s not particularly fun. And finally, all entities with multi-jurisdictional landholdings, that is in Queensland and outside Queensland will need to notify the Commissioner by 31 October 2023 of those landholdings and it is an offense not to do so. As always, we’re more than happy to have a chat about your current situation and landholding or land tax problems you might have, so do feel free to give us a call and look out for part two, where we’re going to be discussing what you can do about these new land tax changes.