What Are the Queensland Land Tax Changes for 2023?

The Revenue Legislation Amendment Act 2022 (QLD) 2022 was assented to on 30 June 2022. This Act makes changes to the Land Tax Act 2010 (QLD), which will impact Queensland landowners on and from 30 June 2023. 

The Current position

Land tax liability in Queensland is currently assessed on the value of all non-exempt landholding (i.e. it does not take into account any landholdings in other States) at midnight on 30 June each year. Different thresholds and rates apply to individuals, corporations, trustees and absentees, and there are exemptions for certain classes of landholdings.

The Changes and new position

On and from the year ending 30 June 2023, a Queensland landholder's land tax liability will be based on the Queensland proportion of the total value of the Australian land owned by the landholder.

The total value of Australian land includes both:

1. The taxable value of Queensland land; and
2. The statutory value of interstate land being the relevant valuations applied under the relevant State and Territory legislation.

The thresholds, rates and exemptions under the current position are not affected by these changes.

Practically, this means that landholders may be pushed into a higher land tax bracket due to the value of interstate landholdings.

The land tax liability under the new position may be calculated by following the steps below:

An example of the land tax changes

Australian company, ABC Pty Ltd, owns:

1. A non-exempt property in Queensland with a taxable value of $750,000; and
2. A non-exempt property in Victoria with a taxable value of $2,000,000. 

Under the Current Position

 ABC Pty Ltd's land tax payable is $8,250.00 as: 

1. Land with a taxable value of $750,000 falls within the bracket for land value between $350,000 to $2,249,999; and
2. The rate of tax for this bracket for a company (effective from and including the 2022- 23 land tax year) is $1,450 plus 1.7 cents for each $1 more than $350,000.

The value of the Victorian property is irrelevant and would be disregarded in calculating the Queensland land tax. 

Under the New Position

Using the steps mentioned above, we can calculate ABC Pty Ltd's land tax as follows:

How Will The Queensland Revenue Office Know of My Interstate Holdings?

To assist the Queensland Revenue Office in determining other Australian landholdings and the statutory value of those landholdings, Queensland landholders will be required to provide further details by way of notice in an approved form (including property description, statutory value and interest).

Notification of this information must be provided to the Commissioner:

• Within 30 days of the assessment notice date if the assessment notice is issued on or before 30 September in the financial year; or
• On or before 31 October in the financial year.

Failure to comply with these notification obligations will be an offence and may result in interest and penalties imposed on the landholder.

other implications

Landlords of commercial properties may seek to pass through their increased liability (where permitted by law) to their tenants and may be a point of contention in negotiations going forward. Landlords should also review their current leases where land tax is being recovered (where permitted) and check the wording of the relevant lease clause to ascertain if it will include interstate land.

Land tax adjustments in the sale/purchase of commercial property should also be examined more closely as Sellers may seek an adjustment of the increased land tax liability.