Queensland Land Tax Changes
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Queensland Land tax and interstate property changes
Effective 30 June 2023, the Queensland government is changing the calculation method to how they levy land tax on the value of Australian land. Simply put, this is a tax grab by the Queensland Government, I am sure they will dress this up on how the additional revenue will assist Queensland residents, but this is a lazy tax grab – on the back of a hot property market. This tax is an additional impost on property investors that hold property in Queensland and interstate.
What is Land Tax
Land Tax is an annual tax, that is levied against individuals and entities – when the value of their land holdings exceeds their individual threshold. This tax is levied against most investment property, with your home (principal place of residence) and some other types of properties exempt.
Historically this is levied at the state level, which means every state has their own threshold and calculation and rates are based on property located in each state. Using that example an investor might have a place of residence in NSW, an investment property in Victoria and a investment property in Queensland. Under this example the investor historically would have individual land tax thresholds for each of Victoria and Queensland.
What are the changes to the way land tax is calculated in Queensland
On the 30 June 2022 Tom owns an investment property in Queensland with a taxable land value of $745,000, his land tax is calculated using the individual rates.
Taxable value of land: $745,000
Calculation
= $500 + (1 cent × $145,000)
= $500 + $1,450
= $1,950
Tom would be issued with an assessment notice for the 2022-2023 financial year for $1,950.
With the change in calculations, on 30 June 2023, the value of Toms Queensland investment property has not changed. Tom also owns investment property with a land value in New South Wales worth $1,565,000. This means his total value of Australian land across both states is $2,310,000. This means Tom’s Land Tax will be calculated at a higher rate.
This is how Tom’s land tax will be calculated:
Taxable value of Australian land: $2,310,000
Calculation
= $4,500 + (1.65 cents × $1,310,000)
= $4,500 + $21,615
= $26,115
This amount is applied to the Queensland portion of Tom’s land (i.e. ($745,000 ÷ $2,310,000) × $26,115)).
Queensland Government will issue an assessment notice for $8,422.37. This represent a 430% increase in the land tax bill payable to the Queensland Government, or put simply a lazy tax grab.
Queensland Government Absentee charge
Australian expats should also be aware on the impact of the absentee rules, for land tax purposes. Introduced in 30 June 2019, if you are deemed an absentee from the Queensland state, you have a reduced land tax threshold and you pay a higher absentee surcharge.
Example
Total taxable value of $400,000
Tax band is $350,000–$2,249,999.
Tax calculation = $1,450 + (1.7 cents × $50,000 excess)
= $2,300
Add 2% absentee surcharge = $1,000
Tax payable = $3,300
Will we see similar changes in other states
