Major Changes to Queensland Land Tax for Interstate Investors

From the 30th of June 2023, there will be major changes to Queensland Land Tax for Interstate Investors who own property in multiple states. If you own investment properties in Queensland and investment properties elsewhere in Australia, your Queensland Land Tax bracket will be determined by the value of your total Australian Land. Not just your Queensland land.

This policy will see investors who own property elsewhere, paying huge amounts of additional tax for their properties in Queensland. Whilst also being taxed for their investments in other states.

Queensland is the first State or Territory to implement a system like this. This action by the State Government could have a far-reaching impact on property investors and local tenants into the future, and if carried out, may entice other states to follow suit.

The New Queensland Land Tax Explained


What’s happening now:

Currently, investors are only paying tax on the land value they own in Queensland.

Say you own a QLD investment property with a taxable value of $745,000. Your land tax for this investment is calculated based on the $600,000–$999,999 Tax Bracket, which your property value falls in – this is $500 plus 1 cent for each $1 more than $600,000.

Taxable value of land = $745,000

Dollars more than $600,000 = $145,000

= $500 + (1 cent × $145,000)

= $500 + $1,450

= $1,950

For the current financial year, you’ll receive an assessment notice for $1,950 in land tax.

 

What’s going to happen:

From next financial year, investors will be paying their QLD land tax based on their total Australian Land.

So, say you own a Queensland investment property worth $745,000. But you also own a NSW investment property with a land value of $900,000. Now you’re automatically bumped into the next land tax bracket for QLD.

The new tax you pay will be calculated as $4,500 plus 1.65 cents for each $1 more than $1,000,000.

New Taxable value of land = $1,645,000

Dollars more than $1,000,000 = $645,000

= $4500 + (1.65 cents × $645,000)

= $4500 + $10,642.50

= $15,142.50

Under the new system, you’ll receive an QLD land tax assessment notice for $15,142.50.

A monumental jump from the previous tax bill of $1,950 for the same QLD property.

Who’s Exempt

If your interstate land meets certain eligibility requirements, you can apply to have its value excluded from the land tax calculation.

These include:

Exemptions for interstate landExemptions for Queensland land
  • 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

 

This means that interstate investors who own their own home, will not have to include the value of their residence in their QLD land tax assessment. The new tax will only impact individuals, companies and trustees who own investment properties in other states as well as in Queensland.

What impact will this have?

Many are arguing that this will drive investors away from investing in Queensland. Those who also own property in other states will effectively be double-taxed for their investment holdings outside of QLD.

Others argue that this is an effort to close a tax loophole for wealthy repeat-investors who own low-value properties in multiple states to keep their inner-state investments below each state’s tax-free threshold. The tax-free threshold for Australian investors is $600,000 in Queensland, for overseas investors this is $350,000

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