Significant land tax changes are coming for Queensland landowners with interstate landholdings – and yes, they will be paying more land tax.
From 30 June 2023, Queensland land tax liability will be assessed on the total value of your Australian land and allocated proportionately to the taxable value of your taxable Queensland land. The total value of your Australian land will comprise the taxable value of your Queensland land and the statutory value of your relevant interstate land for the financial year.
Land tax is currently calculated on the taxable value of your Queensland land (excluding your principal place of residence) as at midnight on 30 June each year. Applicable land tax thresholds, land tax rates and exemptions depend on the type of owner you are (for example an individual or company) and your use of the property (for example primary place of residence and primary production).
30 June 2023 - The net widens
The 30 June 2023 land tax changes will expand the land tax liability net in Queensland as the taxable value of your Australian land will be used to determine whether the applicable land tax threshold is exceeded and the applicable land tax rate. The land tax thresholds, rates, and exemptions will remain unchanged.
A comparison of the current land tax regime and the 30 June 2023 regime for an individual with Queensland land with a taxable value of $1,000,000 and interstate land with a statutory value of $1,000,000 illustrates the widening of the land tax net. (Our example only considers land tax in Queensland and does not consider any liability for land tax relating to the interstate land in the state it is situated).
Under the current land tax regime, the individual’s Queensland land tax liability will be $4,500 based on the taxable value of their Queensland land of $1,000,000 on 30 June 2022.
On 30 June 2023, assuming the relevant values have not changed, the individual’s Queensland land tax liability will be $10,500, as calculated below. This is an increase in land tax payable of $6,000.
The individual’s 30 June 2023 land tax liability will be determined by:
calculating the gross land tax payable on the total value of the individual’s Australian land (gross land tax on $2,000,000 is $21,000); and
allocating the gross land tax amount proportionately to the Queensland land ($21,000 x $1,000,000/$2,000,000).
What you need to do
Queensland landholders will be obliged to provide details of interstate and territory landholdings (including statutory values) to the Queensland Revenue Office generally by 31 October each year or, if a Queensland assessment notice is issued before 31 October, within 30 days of receiving the assessment. Failing to comply with notification obligations will be an offence.
Navigating applicable land tax legislation to comply with your legal obligations and prepare for the 30 June 2023 changes may be a complex exercise depending on your circumstances.
Please contact our property team for assistance understanding how the 30 June 2023 changes may affect you and how to best prepare.
Richard Waring, Director
(07) 3307 4545
Matthew Shannon, Director
(07) 3307 4506
Patrick Sherlock, Senior Associate
(07) 3307 4542