For those of you who own property in Queensland you’ll probably already know about the dreaded Qld Land Tax. However, it’s about to get even nastier if you also own property in other states of Australia. From 30 June 2023, land tax will be calculated using the total value of your Australian land. This includes your taxable land in Queensland and your relevant interstate land.
The current tax-free thresholds are $600,000 for individuals (other than absentees) and $350,000 for companies, trustees and absentees.
You’ll only pay tax on the land you own in Queensland (i.e. the Qld Government are not taxing your land outside Queensland).
If you only own land in Queensland, you will not be affected by this change.
Queensland and interstate land
If you own land in Queensland and in another state or territory, you will need to declare your interstate landholdings. You’ll need to set up a QRO Online account and complete the declaration.
From 30 June 2023, you will need to complete this declaration by the earlier of the following:
- within 30 days of receiving a land tax assessment notice
- on or before 31 October.
Interstate land value
When you complete an interstate land declaration online, you’ll enter the value of each parcel of interstate land. For an interstate property you owned on 30 June 2023, you would enter the statutory value for that parcel of land as at 30 June 2023.
Calculating land tax with interstate land
The land tax rate that applies depends on what type of owner you are and the value of your land. This rate (and surcharge, if applicable) is applied to the total value of your Australian land. Then this figure is applied to the Queensland portion to get the annual land tax liability.
Example
On 30 June 2022, Lena owns land in Queensland with a taxable value of $745,000. Her land tax is calculated using the rates for individuals.
Taxable value of land: $745,000
Calculation
= $500 + (1 cent × $145,000)
= $500 + $1,450
= $1,950
We will issue an assessment notice for $1,950 for the 2022–23 financial year.
On 30 June 2023, the value of Lena’s land in Queensland has not changed. But Lena now also owns land in Victoria valued at $1,565,000. The total value of Australian land owned by Lena is $2,310,000, which means the land tax is calculated using a higher rate for individuals.
This is how Lena’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 Lena’s land (i.e. ($745,000 ÷ $2,310,000) × $26,115)).
We will issue an assessment notice for $8,422.37.
We will issue an assessment notice for $8,422.37.
Excluded land
For land in Queensland, you may be eligible for a land tax exemption depending on the ownership and use of the land.
Example
DBA Company owns the following landholdings:
- land in Queensland with a taxable value of $1,345,000
- interstate land (including a farm in Tasmania) with taxable value of $775,000.
DBA Company applies for the farm in Tasmania to be excluded because it is being used for a primary production business. The exclusion is approved, reducing DBA’s interstate land value to $150,000.
This is how DBA’s land tax will be calculated using the rates for companies:
Taxable value of Australian land: $1,495,000
Calculation
= $1,450 + (1.7 cents × $1,145,000)
= $1,450 + $19,465
= $20,915
This amount is applied to the Queensland portion of DBA’s land (i.e. ($1,345,000 ÷ $1,495,000) × $20,915)).
We will issue an assessment notice for $18,816.51.
We will issue an assessment notice for $18,816.51.
Author
Kim Jay
