Not all states are equal – QLD land tax extending interstate

Land tax has always been a state-based tax calculated on the land held by investors in each relevant state. If the land held in the relevant state went over a certain threshold, then land tax was payable. However, different states had different thresholds and payment rates, and the one constant, it only applied to the land in that state.

It seems in the dark of night that the Queensland (QLD) State Government has changed the very fabric the makes up a state-based land tax. From 30 June 2023, when the QLD Revenue Office calculates land tax, they will use the total value of your total Australian land.

You read that correctly.

From 30 June 2023, if you own QLD and interstate land you will need to declare your interstate landholdings via QRO Online: www.business.qld.gov.au/running-business/support-assistance/qro-online/manage-account/create-account. The value of the interstate land will be determined by valuation legislation in the relevant state or territory and QLD Revenue will calculate this for you.

The current tax-free thresholds in QLD are $600,000 for individuals and $350,000 for companies, trustees, and absentees. It is noted that your principal place of residence is excluded.

The QLD Government kindly gives an example of Lena who currently owns land in QLD with a taxable value of $745,000. For the 2023 financial year, her land tax payable would be $1,950. However, from 30 June 2023, Lena must inform QLD Revenue that she also owns land in Victoria valued at $1,565,000 and the total value of her Australian land will be calculated. As a result, her land tax payable has increased to $8,422.37.

Quite a large hike, right?

QLD Revenue stresses that the land tax is only applied to the QLD portion of the Australian land, but what they fail to justify is how, in the above example, the tax clearly increases.

With Australian land values at all-time highs, these ‘subtle’ increases make a significant difference.

These QLD land tax changes are detrimental to those looking to own a diverse property portfolio and will no doubt result in investors leaving the QLD property market in droves, or at least seriously consider their options.

If you are concerned about these changes and how they will affect you, please contact our office so that we may assist you moving forward.

Email us at info@wscgroup.com.au or call 1300 365 125.