We have recently written about changes proposed by the Queensland Government, to the way in which land tax was to be calculated and charged in Queensland. On 30 September 2022 Queensland Premier Anastasia Palaszczuk announced that the Queensland Government would be abandoning those changes.
The abandoned changes
Under the land tax changes legislated by the Queensland Government from 30 June 2023, land tax on an owner's Queensland land holdings was to be calculated having regard to the taxable value of all land owned by that landowner, throughout Australia.
That would have meant that in determining;
- whether a Queensland landholder had reached the relevant applicable tax-free threshold for the taxation of their Queensland land holdings; and
- which rate of tax was to be applied in calculating the land tax applied to a landowners' land in Queensland,
under the cancelled changes, the Queensland Revenue Office would have adopted the aggregate taxable value for all of that landowners' land, including land held interstate.
The changes would have had the effect of substantially increasing the amount of land tax payable, for Queensland landowners who also hold land in other states.
The changes attracted a great deal of lobbying by all stakeholders to the Queensland property industry. The additional tax burden, which is not currently being applied in any other jurisdiction in Australia, would have had the obvious effect of disincentivising investment in Queensland property stock, likely inhibiting economic activity, and exacerbating an already strained rental market.
At this stage, the abandonment of the changes appears to be limited to the Premier's announcement on 30 September. At the time of writing, the Queensland Revenue Office has not yet updated its website, nor has the Government introduced legislation to effectively repeal the changes to the Land Tax Act 2010 legislated by the Revenue Legislation Amendment Bill 2022.
That being said, unless the changes are reinstated by the Queensland Government, land tax will continue to be levied in Queensland on the same basis as it is currently being assessed; that is, on the basis of the aggregate value of all properties owned by a landowner in Queensland, as at 30 June each year.
It is certainly not the case that the Queensland Government are abandoning land tax altogether; it is simply proposing to repeal the proposed changes to the land tax regime that were passed into law earlier this year. Landowners who have been burdened with land tax in the past, can still look forward to receiving similar land tax assessments next year. Those affected Queensland investors should be aware that there may be strategies that can be used at the point of purchase, to minimise their land tax burden, and they should seek professional advice before signing a purchase contract. Similarly, there may also be a limited number of other options available to existing landowners, to reduce their existing land tax burden.