Tax Alert - Queensland land tax calculations to include value of some interstate land investments.

Lowe Lippmann Chartered Accountants

Queensland land tax calculations to include value of some interstate land investments

Firstly, we must note upfront that the Queensland state government has not changed these rules to tax any land holdings in other Australian states.


Secondly, any Queenslander’s who only have land holdings in their home state will not be impacted and will continue to be able to access all available exemptions on their principal place of residence or primary production exemptions.




What are the changes?


These changes will start to apply to Queensland land tax assessments in the 2023-24 financial year.


From 1 July 2023, the methodology used to calculate Queensland land tax has been changed, which now includes the value of certain land holdings within Australia (not just within Queensland) to determine:


  • whether the tax-free threshold (currently $600,000 for individuals excluding absentees, and $350,000 for companies, trusts and absentees) has been exceeded; and
  • the rate of land tax that will be applied to the Queensland proportion of the value of your landholdings.


This change to the calculation method now includes any taxable land in Queensland and any “relevant interstate land”, which is defined to include land located in another state or territory that is valued under interstate valuation legislation (ie. the statutory value) and is not ‘excluded interstate land’ (such as a principal place of residence or primary production land).



What to do if you own Queensland and interstate land?


If you own land in Queensland and in another state or territory, you will need to make a declaration with the Queensland Revenue Office regarding your interstate land holdings by providing details, such as a land description, value and percentage of ownership.


From 30 June 2023, this declaration will need to be completed by the earlier of the following:


  • within 30 days of the assessment notice date and where the assessment notice is issued before 30 September 2023; or
  • on or before the 31 October 2023 where the assessment notice is used after 30 September 2023.


We note that land holders may have interest and penalty tax imposed on them if they fail to notify the Commissioner of their landholdings within the prescribed timeframe. Furthermore, it may be possible that ‘infringing’ land holders may also be subject to civil penalties (of up to $14,375).




We stress that these changes apply to companies, individuals and trusts and represent a substantial change in the Australian land tax regime, and we should be aware that other jurisdictions may start looking at these changes with interest.


The immediate impact for the 2023-24 financial year is likely to be an increase in Queensland land tax being felt by commercial tenants, where their landlords are permitted by law to pass-on their increased costs.



 

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

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