30 June 2023 Queensland Land Tax changes to affect owners with interstate land (updated)

August 15, 2022

From 30 June 2023, the Queensland Government will calculate your Queensland land tax liability with reference to both:
(a)        land owned in Queensland; and
(b)        land owned elsewhere in Australia

Owners will not be directly taxed for interstate land-holdings, however interstate land holdings will cause the Qld tax-free-thresholds to be exceeded in more cases.,from%20the%20land%20tax%20calculation. ]

Jane owns:

  1. a Queensland investment property with a $500,000 taxable value (according to Qld Government assessment – note, this is different from market value).
  2. Jane also owns a NSW Queensland investment property with a $1,000,000 taxable value (according to NSW Government assessment).

Previously, Jane would pay no Qld Land Tax because her Qld property has a taxable value lower than the $600,000 threshold for individuals.

From 30 June 2023, Jane’s Qld Land Tax will be calculate as follows:
(a)        the total taxable value of Qld and NSW property is combined ($500,000 + $1M = $1,500,000 total);
(b)        Land Tax of $12,750 is calculated at the Qld rate on this $1,500,000 figure;
(c)        An apportionment between Qld and total property is conducted ($500,000/$1.5M = 0.333);
(d)        the apportionment is applied to the $12,750 nominal total land tax to produce a $4,250 Qld land tax bill for Jane ($12,750 x .333 = $4,250 Qld land tax bill)

Notifying the Commissioner
The Commissioner will issue pre-assessment notices to owners they identify as owning land in Queensland and interstate. Owners are required to notify the Commissioner of their interstate land holdings by either:
(i)         confirming the Qld pre-assessment notice; or
(ii)        amending it to include any land they own interstate and its taxable value (according to interstate government valuation).

Owners must notify the Commissioner:
(a)        if the assessment notice is issued before 30 September 2023, within 30 days of the assessment notice date; or
(b)        if the assessment notice is issued after 30 September 2023, by 31 October 2023.

Exemptions/Exclusions (interstate land)
Some exclusions will/may be accepted for interstate land. The following is from the Qld government link:

Exclusions available for interstate land Exemptions available for Queensland land only
  • Home (principal place of residence)
  • Primary production
  • Supported accommodation
  • Moveable dwelling (caravan) park
  • Retirement village
  • Transitional home
  • Charitable institutions
  • Aged care
  • Government land
  • Port authority land
  • Societies, clubs and associations

“More information on exclusions and how to apply will be available after 30 June 2023” according to the Queensland Government weblink above.

Features not changing
Tax-free thresholds (individual and company), the absentee/foreign surcharge and Qld exemptions (in relation to Qld land) will continue to apply.

As far as we can tell, owning different properties via different entities remains an effective method of reducing land tax, however any single entity owning Qld and interstate property is likely to be affected.

As usual, transferring properties between entities will typically incur a transfer duty liability (Qld or interstate as applicable), however any investor who is “on the fence” about selling a property may be prompted to do so before 30 June 2023 in light of the expected changes.

Written By: Julian Creagh – Associate, Wilson Lawyers

Addendum: on 30 September 2022 the Queensland Government announced that these proposed changes would be scrapped. Lack of cooperation from other States in sharing their land ownership data appears to have been a factor. As such the normal/previous methods of calculating Queensland Land Tax liability will apply. I.e. only the land a person or entity owns in Queensland will be relevant to the land tax liability for that person/entity.