Key Takeaways

From 30 June 2023, the Queensland Revenue Office (QRO) will take into account the total value of your landholdings across Australia when calculating your land tax liability for the land you own in Queensland.

New Legislation

Amendment

The Revenue Legislation Amendment Act 2022 (Qld) (the Amendment Act), which received Royal Assent on 30 June 2022, amends the Land Tax Act 2010 (Qld) (the Act) and other Queensland revenue legislation.

The amendments come into force on 30 June 2023.

The Amendment Act amends s6(2) of the Act so that the amount of land tax imposed is based on the Queensland proportion of the total value of the Australian land owned by the taxpayer.

’Australian land’ is defined under s8A of the amended Act to include both:

1. 'taxable land' in Queensland; and
2. ’relevant interstate land’.

'Relevant interstate land' includes land in another Australian state or territory that is also valued for land tax purposes under the legislation of that particular state or territory, but does not include 'excluded interstate land’.

'Excluded interstate land' includes:

1. principal places of residence;
2. retirement villages;
3. aged care;
4. primary production;
5. supported accommodation;
6. moveable dwelling (caravan) parks;
7. transitional homes; and
8. charitable institutions.

Calculation of land tax liability from 30 June 2023

In practice, the QRO will assess land tax liability in Queensland by:

1. determining the total value of a taxpayer’s taxable land in Queensland and relevant interstate land;
2. assessing land tax liability as if the relevant interstate land were also in Queensland; and
3. calculating land tax liability by apportioning the total land tax amount to the taxable land in Queensland as a relative value.

Change in eligibility for tax-free threshold

From 30 June 2023, both the value of taxable land in Queensland and relevant interstate land will be used to determine whether you have exceeded the tax-free threshold.

The current tax-free thresholds are:

1. $600,000.00 for individuals (other than absentees); and
2. $350,000.00 for companies, trustees and absentees.

Policy justification

Some of the key policy justifications for this new land tax rule are to:

1. deter interstate property investors;
2. assist first-home buyers living in Queensland; and
3. manage housing affordability.

Queensland is the first and only State to take into account the value of interstate land in calculating land tax liability.

It will be interesting to see if the other States follow.

Implications

1. Interstate landlords in Queensland may see a significant rise in their land tax liabilities. Landlords are likely to pass on the increases to tenants by way of increased rental payments.
2. If you own land in both Queensland and other States or Territories, it is more than likely you will now exceed the tax-free threshold, and see an increase in your land tax liability.
3. All landholders in Queensland will be required to declare all their interstate properties and their values (which will be taken from the local state or territory’s valuation regime).