If You Own Property in QLD – You MUST Read This !

Under the Land Tax Act, owners are liable for land tax if the total value of the non-exempt Queensland land they own as at 30 June exceeds the tax-free threshold.

Land tax is calculated by applying the relevant general rate to the total taxable value of an owner’s non-exempt Queensland land.

The general rates of land tax progressively increase in line with the value of non-exempt Queensland land. In addition to land tax at the general rates, absentees, foreign companies and trustees of foreign trusts are subject to a surcharge rate (currently 2 per cent).

Where an individual also owns land in another jurisdiction, the land was not previously relevant for Queensland land tax purposes.

THIS HAS ALL CHANGED !!

Under the new framework, in addition to taxable land, relevant interstate land will also be relevant for determining whether the tax-free threshold has been exceeded and the applicable rate.

Generally, relevant interstate land is interstate land that is valued under corresponding interstate valuation legislation and is not excluded. Interstate land is freehold land in other states and land under Crown lease in the Australian Capital Territory (ACT).

ACT Crown leasehold land is the only type of leasehold land that is relevant for land tax purposes as the ACT generally operates under a leasehold system as opposed to a freehold system.

A person is currently liable for land tax when the total value of their taxable land exceeds the tax-free threshold, being $600,000 for individuals other than absentees and $350,000 for companies, trustees and absentees.

Under the new framework, the total value of an owner’s taxable land and relevant interstate land (Australian land) will be used to determine whether the tax-free threshold has been exceeded, as opposed to solely being based on the value of their taxable land.

EXAMPLE

Bob owns taxable land with a taxable value of $745,000.

Under the old system Bob is liable for land tax of $1,950.00

Bob also owns relevant interstate land in NSW with a total value of $1,565,000.

Adding this to the taxable value of Bob’s land in QLD the total value of Australian land owned by Bob is $2,310,000.

Under the new framework Bob would be liable for land tax of $26,115 on his total Australian taxable land value.

This is then applied to the taxable value of the QLD land as a proportion of the total value of the Australian land ($745,000/$2,310,000).

The outcome is that Bob will now pay land tax of $8,422.37

This is a significant change and if you have land in QLD you MUST ACT NOW.

The penalties for not reporting your total land values to QLD Revenue Office are SIGNIFICANT.

Also discuss with us your current structures and structuring is NOW CRITICAL for all acquisitions moving forward. Anywhere in Australia !!

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Frequently Asked Questions

What changes have been made to the Land Tax Act in Queensland?

Previously, the Land Tax Act in Queensland only considered the value of non-exempt land within the state for tax calculations. However, under the new framework, the value of relevant interstate land will also be considered for determining if the tax-free threshold has been exceeded and the applicable rate.

How is land tax calculated in Queensland?

Land tax is calculated by applying the relevant general rate to the total taxable value of an owner’s non-exempt Queensland land. The general rates progressively increase with the value of the non-exempt land. In addition, absentees, foreign companies, and trustees of foreign trusts are subject to a surcharge rate, currently at 2%.

What is considered "relevant interstate land"?

Relevant interstate land typically refers to land located in other states that are valued under corresponding interstate valuation legislation. This includes freehold land in other states and land under Crown lease in the Australian Capital Territory (ACT), as the ACT primarily operates under a leasehold system rather than a freehold one.

What are the penalties for not reporting your total land values to the QLD Revenue Office?

The blog post does not specify the exact penalties for failing to report total land values to the QLD Revenue Office, but emphasizes that they are significant. It's strongly recommended for property owners to report their total land values accurately and on time to avoid any potential penalties.

5. How is the tax-free threshold determined under the new framework?

Under the new framework, the tax-free threshold is determined based on the total value of an owner’s taxable land and relevant interstate land (Australian land). This differs from the old system, which based the tax-free threshold solely on the value of their taxable land within Queensland. The thresholds are currently $600,000 for individuals (excluding absentees) and $350,000 for companies, trustees, and absentees.