January 1, 2023
Land tax in Queensland: Your complete guide
Land tax is a state tax payable by some property owners in Queensland. It is calculated based on the total taxable value of land held in the state, which is assessed annually, and other factors including how the land is owned, and whether any exemptions apply.
The rate of land tax is determined by the Queensland Government. Individuals, corporations and trusts can all be liable to pay land tax.
What Land Is Taxable?
Land tax is payable on freehold land, which includes vacant land, land that is built on, and lots in community title schemes (apartments or units).
What Are The Land Tax Thresholds?
Land tax is only payable where the total value of your land exceeds a given amount. This land tax threshold depends on whether you own the land as an individual, or as a trust or company.
Currently, the land tax threshold is $600,000 for land held as an individual, and $350,000 for companies, trusts and absentees.
As well as the lower threshold, a surcharge of 2% applies to absentees (foreign individuals who do not ordinarily reside in Australia).
How Is Land Tax Calculated?
Land tax liability is calculated on the total taxable value of land held in Queensland. This combined value includes land you own by yourself, as well as any portion, or share of property you own with other people.
If this value exceeds the land tax threshold, the applicable land tax rate is applied against it.
The land tax rate is determined by the state government and it again depends on the taxable value of the land and the type of ownership of the land (whether it is owned as an individual, company or trust). The table below shows the current rates for individuals. You will notice that as the total value of land held increases, a higher land tax bracket applies.
Land Tax Rates For Individuals
The current land tax rates for individuals are below;
| Total Taxable Value Of Land | Rate Of Land Tax |
|---|---|
| $0–$599,999 | $0 |
| $600,000–$999,999 | $4,500 plus 1.65 cents for each $1 more than $1,000,000 |
| $1,000,000–$2,999,999 | $4,500 plus 1.65 cents for each $1 more than $1,000,000 |
| $3,000,000–$4,999,999 | $37,500 plus 1.25 cents for each $1 more than $3,000,000 |
| $5,000,000–$9,999,999 | $62,500 plus 1.75 cents for each $1 more than $5,000,000 |
| $10,000,000 or more | $150,000 plus 2.25 cents for each $1 more than $10,000,000 |
Example
To calculate the total land tax amount for an individual where the total land value is $700,000:
Tax bracket is $600,000–$999,999
Calculation = $500 + (1 cent x $100,000)
Total land tax payable = $1,500
Land Tax Rates For Companies and Trusts
The current land tax rates for companies and trustees are as follows;
| Total Taxable Value Of Land | Rate Of Land Tax |
|---|---|
| $0–$349,999 | $0 |
| $350,000–$2,249,999 | $1,450 plus 1.7 cents for each $1 more than $350,000 |
| $2,250,000–$4,999,999 | $33,750 plus 1.5 cents for each $1 more than $2,250,000 |
| $5,000,000–$9,999,999 | $75,000 plus 2.25 cents for each $1 more than $5,000,000 |
| $10,000,000 or more | $187,500 plus 2.75 cents for each $1 more than $10,000,000 |
Example
To calculate land tax payable for an Australian company with land holdings of a value of $550,000:
Tax bracket is $350,000–$2,249,999
Calculation: $1,450 + (1.7 x $200,000)
Total land tax payable: 3,400 + 1450 = $4,850
How Is The Value Of Property Determined?
Annual land valuations are undertaken by the Valuer-General and assessed as at 1 October, with valuations taking effect for land tax purposes each year on 30 June. The Valuer-General does not conduct valuations on each and every block, but chooses a representative property to value, and uses that valuation as an indicator for what similar properties would be worth.
The method of calculating the value of land depends on the zoning of the land, physical attributes of the land, constraints on use of the land and many other factors. Broadly, how the land is valued depends on whether the land is zoned as rural.
Valuing Rural Land
Rural land is usually valued on something called the ‘unimproved value’ of the land. This means the value of the land in its natural condition without any physical improvements.
It is the amount the land would be likely to sell for without improvements such as houses, fences or other works.
A concession is available if the land is used for farming.
Valuing Non-Rural Land
Non-Rural Land is valued on ‘site value,’ which is what the Valuer-General considers the land would be likely to sell for. It includes some improvements, such as works done to get the land ready for development, but does not include structural improvements such as houses, sheds or landscaping.
Valuing Community Title Scheme Land (Apartments, Units and Duplexes)
Individual units are not valued, rather, the land for the entire Community Titles Schemes is valued as a whole and sent to the relevant Body Corporate. It is then apportioned between lot owners.
Can I Object To My Land Tax Valuation?
If you don’t agree with your valuation, you can lodge an objection with sixty days of receiving your valuation notice. You must provide supporting documentation showing why the valuation is incorrect, and you must object on one of stipulated grounds.
The acceptable grounds of objection include;
- Sales evidence – if you can show evidence of recent past sales of similar properties supporting a lower value for your property, you may be able to raise an objection on sales evidence.
- Physical characteristics or constraints on use of the land – if there is something particular about your property that stops you from using it in a way that lowers its value, you can raise the issue with the Valuer-General.
- Deductions for Site Improvements – You may be eligible for a deduction for site improvements undertaken to prepare land for development. More information about DSIs are available here.
The Queensland state government website has more general information about how land value is calculated by the Valuer-General.
Are There Land Tax Exemptions?
The amount of land tax payable also depends on whether any exemptions apply. If certain land is exempt from land tax, the value of that land is deducted from the total taxable value.
An exemption is available for land, or part of the land, that is used as your principle place of residence. This is also known as the ‘home exemption.’ This exemption may reduce your total land tax payable, or in some circumstances put you below the land tax threshold.
When calculating land tax, exemptions do not apply automatically. You must apply for an exemption through the Queensland Revenue Office if you are being assessed for land tax and you believe you are eligible.
The availability of the home exemption is more complicated where the land is held on trust or by a superannuation fund. It is important that you obtain legal advice in relation to your land tax liability.
Other land tax exemptions include;
- Charitable institutions exemption
- Primary production exemption
- Moveable dwelling (caravan) parks exemption
- Aged care facilities
- Retirement villages
- Society, club or association
Check out the land tax home exemption eligibility tester for an indication of whether you might be able to claim this exemption. Remember to seek legal advice if you are unsure about your eligibility, and for more general information on land tax exemptions check out the Queensland Government’s website.
Land Tax And Buying Property In Queensland
When buying property in Queensland, it is critical that your conveyancer obtains a land tax clearance certificate to ensure there is no land tax liability attached to the property.
This is because land tax is calculated on the taxable value of property you own as at 30 June for the whole year, and if there is an amount owing it is not automatically apportioned between buyer and seller. This means you could be liable for land tax owing on a property for a period that you were not the owner.
At Keylaw it is our policy to obtain a land tax clearance certificate on every purchase file to ensure our client’s interests are protected.
Queensland Land Tax Changes Scrapped
Land tax has been a topical issue in 2022 because the Queensland Government proposed changes to the Land Tax Act 2010 (Qld) earlier in the year that would have meant significant changes to the land tax regime in the state.
The Government proposed to expand the tax so that all Australian land owned would be taken into account for the purposes of land tax assessment, and not just Queensland land holdings. This means that many Queenslanders who own property interstate would have faced a higher land tax bill because they would have been pushed into a higher tax bracket.
However, the government announced in September that these planned changes have been scrapped.
One of the reasons for the shelving of the Queensland land tax reforms appears to be that the state government does not have the ability to access property ownership records from other states. The government would therefore be reliant on other states handing over this information annually.
More Questions?
Land tax is a complicated area of law, and it is critical that you obtain advice about your situation if you are uncertain. Legal and financial advice should also be sought in relation to land tax implications when you are looking at building a property portfolio.
The above is not legal advice and is general information only.
