From 30th June 2023, land tax payable for Queensland landholders will be based on the Queensland portion of the total value of Australian land. The value of Australian land will be used to determine;
(a) whether the tax-free threshold has been exceeded and
(b) the rate of land tax that will be applied to the Queensland portion of total Australian landholdings
Queensland Revenue Office are not starting to tax interstate land holdings, they are using the total Australian land holdings to determine what rate of tax to pay. These change however, may lead to Queensland landholders with interstate land being pushed into higher land tax brackets and therefore higher land tax assessments.
For example, a Trust has the following land holdings:
– Queensland Property: $850,000
– Victorian Property: $1,800,000
Under current rules, where Queensland Land Tax is calculated on the value of Queensland land holdings, the Land Tax payable would be $9,950.
Calculated as:
Tax on Queensland holdings $9,950 ($1,450 + $8,500 (1.7% of excess over $350,000))
Under the new rules, where Queensland Land Tax is calculated on the Queensland portion of total Australian land, the Queensland Land Tax payable would be $12,750.
Calculated as:
Tax on total holdings $39,750 ($33,750 + $6,000 (1.5% of excess over $2,250,000))
Apply tax to Queensland portion of total land $39,750 * ($850,000/$2,650,000)
In this example, the Queensland land tax assessment will be $2,800 higher under the new rules which start on 30th June 2023.
Queensland thresholds, rates and exemptions are not affected by these changes. Queensland landholders also have additional notification obligations to advise Queensland Revenue Office of their interstate holdings by 31st October each year.
Contributed by Nathan Batty.
