Changes to Queensland tax rules will now see landowners with landholdings in other parts of the country have their land tax bill increase from 30 June 2023. The proposed changes that were flagged in December 2021 and have already been included in the most recent state budget, have been termed an effective tax hike by some pundits.
This change will not affect those that fall below the threshold and only own land in Queensland. It will principally affect Queensland landowners with landholding in other parts of Australia. The intestate land may also be exempted if used as a principal place of residence, for primary production, and charities. The latter could include those Queensland lands held by clubs, societies and associations.
Once this change goes into effect next year, the Queensland land tax will only be payable on the taxable land value of the Queensland land holdings. The rate at which the land tax will be calculated will however depend on the value of the taxpayer’s total Australian landholdings. This will apply even if the value of the landholdings in other states falls within their tax-free threshold.
For Queensland landowners whose land value falls within the tax-free threshold but also have land holdings in other states, it is expected that they will start paying more once the new land tax rules go into effect.
Queensland is the first state in Australia to effect such a change in its land tax rules and it is expected that other states may soon follow suit. The New South Wales government is already considering ending stamp duty in favour of an annual land tax. Besides making the Queensland land tax regime more complicated and expensive, the changes are also expected to cause problems for affected landowners’ tenants. Many are expected to pass on this bill to their tenants by raising rents.
The Real Estate Institute of Queensland (REIQ) had earlier criticized the move, saying that the government did not consult with stakeholders and it was an attempt by the government to dip into the piggy bank of property owners. REIQ CEO, Antonia Mercorella, said this would deter investors looking to invest in Queensland and for those already with commercial land holdings, the tax would force them to raise rents.
The Queensland state government website is advising interstate landowners to set up an online account with the Queensland Revenue Office where they are expected to declare their landholdings from 30 June 2023.
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