Controversial Land Tax scrapped for Queensland property owners

Great news for Queensland landholders, on 30th of September 2022, Queensland Premier Annastacia Palaszczuk announced she will no longer approve the controversial land tax after weeks of negative publicity.

The proposed tax changes, which were due to start next year, would calculate an owner’s liability for land tax based on the total value of their Australia-wide holdings that are not exempt, not just those in Queensland.

The changes to the calculation of Queensland land tax liability were initially given the tick of approval on 30 June 2022. Which meant that Queensland landholders who owned interstate properties may have been hit with higher tax rates.

What were the proposed changes?

The Revenue Legislation Amendment Act 2022 (Qld) changed the way land tax was going to be calculated under the Land Tax Act 2010 (Qld) (Act).
From 30 June 2023, the statutory value of interstate landholdings (i.e. the value determined under the relevant State or Territory legislation) would have been accounted for in the assessment of Queensland land tax liability. In that regard, the landholder’s Australian land would have been used to calculate the applicable land tax rate for their Queensland property.

Under the current system, land tax will continue to be assessed solely on the value of Queensland landholdings. Set out below are two examples that illustrate the way the current land tax is and will remain to be calculated for Queensland properties (unless they decide to change it in future).

The current system for Individuals

As at 30 June 2022, John owns a property in Queensland with a taxable value of $700,000.00. In this instance, the applicable rate for John’s Queensland property under Schedule 1 of the Act is $500.00 plus 1 cent for every $1.00 over $600,000.00 up to $999,999.99. John’s liability is calculated as follows:
$500.00 + (0.01 x $100,000.00)
= $500.00 + $1,000.00
= $1,500.00
John’s land tax liability for the 2022-23 financial year is $1,500.00.


The current system for Companies and Trusts

ABC Pty Ltd owns a Queensland property with a taxable value of $700,000.00. The applicable tax rate under Schedule 2 of the Act is $1,450 plus 1.7 cents for every $1.00 over $350,000 up to $2,249,999.99. The company’s land tax liability is calculated as follows:

$1,450 + (0.017 x $350,000)
= $1,450 + $5,950
= $7,400

The company’s land tax liability for the 2022-23 financial year is $7,400.

How can Morrows help

If you own property in Queensland and other Australian states and want to understand your land tax contributions, please reach out to your Morrows Tax and Business advisor.

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