Queensland’s new land tax

If you own land in Queensland (or are contemplating making a purchase) and also own other land interstate (or you are contemplating making a purchase) you may soon have an increased land tax liability.

As of 30 June 2023, Queensland landholders’ land tax liability will be based on the Queensland proportion of the total value of the Australian land owned by the landholder. Consequently, landholders with interstate land could be pushed into a higher land tax bracket due to the value of these interstate holdings.

For background, land tax liability in Queensland was, up until the above change, calculated on the value of all non-exempt landholdings (i.e. it did 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.

Under the new changes, 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. All told, these changes mean that landholders may be pushed into a higher land tax bracket due to the value of interstate landholdings.

Queensland Government Example
On 30 June 2022, Lena owns land in Queensland with a taxable value of $745,000. Her land tax is calculated using the rates for individuals.
• Taxable value of land: $745,000
• Calculation
= $500 + (1 cent × $145,000)
= $500 + $1,450
= $1,950

We will issue an assessment notice for $1,950 for the 2022–23 financial year.

On 30 June 2023, the value of Lena’s land in Queensland has not changed. But Lena now also owns land in Victoria valued at $1,565,000. The total value of Australian land owned by Lena is $2,310,000, which means the land tax is calculated using a higher rate for individuals.

This is how Lena’s land tax will be calculated:
• Taxable value of Australian land: $2,310,000
• Calculation
= $4,500 + (1.65 cents × $1,310,000)
= $4,500 + $21,615
= $26,115
This amount is applied to the Queensland portion of Lena’s land (i.e. ($745,000 ÷ $2,310,000) × $26,115).
We will issue an assessment notice for $8,422.37

Note that if you only own land in Queensland, you will not be affected by this change. You will continue to be able to access all available exemptions, such as the home (principal place of residence) and primary production exemptions. If your principal place of residence is located interstate, it will also be exempt.

It’s important for Queensland landholders to understand the changes in order to assess whether they will be affected on and from June 2023.
Contact your Forsyths accountant if you have any questions .