Queensland Land Tax Reform Struck Down

[fusion_builder_container type=”flex” hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” align_content=”stretch” flex_align_items=”flex-start” flex_justify_content=”flex-start” hundred_percent_height_center_content=”yes” equal_height_columns=”no” container_tag=”div” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” border_style=”solid” box_shadow=”no” box_shadow_blur=”0″ box_shadow_spread=”0″ gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ background_blend_mode=”none” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” pattern_bg=”none” pattern_bg_style=”default” pattern_bg_opacity=”100″ pattern_bg_blend_mode=”normal” mask_bg=”none” mask_bg_style=”default” mask_bg_opacity=”100″ mask_bg_transform=”left” mask_bg_blend_mode=”normal” absolute=”off” absolute_devices=”small,medium,large” sticky=”off” sticky_devices=”small-visibility,medium-visibility,large-visibility” sticky_transition_offset=”0″ scroll_offset=”0″ animation_direction=”left” animation_speed=”0.3″ filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ align_self=”auto” content_layout=”column” align_content=”flex-start” valign_content=”flex-start” content_wrap=”wrap” center_content=”no” column_tag=”div” target=”_self” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” order_medium=”0″ order_small=”0″ hover_type=”none” border_style=”solid” box_shadow=”no” box_shadow_blur=”0″ box_shadow_spread=”0″ z_index_subgroup=”regular” background_type=”single” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ lazy_load=”avada” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” sticky=”off” sticky_devices=”small-visibility,medium-visibility,large-visibility” filter_type=”regular” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ transform_type=”regular” transform_scale_x=”1″ transform_scale_y=”1″ transform_translate_x=”0″ transform_translate_y=”0″ transform_rotate=”0″ transform_skew_x=”0″ transform_skew_y=”0″ transform_scale_x_hover=”1″ transform_scale_y_hover=”1″ transform_translate_x_hover=”0″ transform_translate_y_hover=”0″ transform_rotate_hover=”0″ transform_skew_x_hover=”0″ transform_skew_y_hover=”0″ animation_direction=”left” animation_speed=”0.3″ last=”true” border_position=”all” first=”true” min_height=”” link=””][fusion_text animation_direction=”left” animation_speed=”0.3″ hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky”]

Queensland Land Tax Reform Struck Down

Last week, the Queensland premier Annastacia Palaszczuk abandoned the proposed Queensland Land Tax reform following significant industry pushback.

Queensland was set to implement new legislation affecting the land tax of Queensland landowners. The change was set to take effect 30 June 2023 and would have significantly increased the annual land tax liability of Queensland landowners.

Currently

Currently, Queensland land tax is calculated based on the value of all Queensland land which is not exempt from land tax. Land which is exempt from land tax includes:

  • land held by individuals with a value of $600,000.00 or less; or
  • land held by companies, absentees, or trustees with a value of $350,000.00 or less.

Crucially, Queensland landowners are not currently assessed on the value of land held outside of Queensland.

What was proposed?

Under the proposed reform, from 30 June 2023 land tax for Queensland homeowners would have been assessed based on all land held across any State in Australia. These changes would have seen landowners with land in multiple States, including Queensland, pay significantly higher land tax.

Calculations

Under the proposed reform, land tax liability would be calculated as follows:

  • calculate the total value of taxable land owned in all of Australia;
  • calculate the Queensland land tax liability of the all the taxable land held in Australian as if it were all held in Queensland;
  • calculate the percentage of the total taxable land which is owed in Queensland only; and then
  • multiply the total calculated land tax liability by the percentage of Queensland land.

Example

For example, Stephanie owns land in Australia with the following taxable value:

  • Queensland $750,000.00
  • New South Wales $550,000.00
  • Victoria $300,000.00

Stephanie’s land tax liability as of 30 June 2022 is calculated only on the $750,000.00 land value in Queensland and totals $2,000.00 for the year.

Under the reform, as of 30 June 2023, Stephanie’s land tax liability would be calculated as follows:

  • Total value of taxable land = $1,600,000.00 = ($750,000.00 + $550,000.00 + $300,000.00)
  • Land tax payable on total value of taxable land = $14,400.00
  • Percentage of Queensland property = 46.875% = ($750,000.00 / $1,600,000.00) x 100%
  • Land tax payable = $6,750.00 = $14,400.00 x 46.875%

Following the land tax reform, Stephanie’s land tax would increase from $2,000.00 to $6,750.00 per annum.

Concerns over the Reform

Amid the rising RBA cash rate, the proposal sparked panic across the property industry. The main concern being that Queensland landowners would suffer a double jeopardy on land tax for any interstate land.

To continue with the above example, Stephanie would not only pay a significantly higher land tax in Queensland based on the taxable value of her properties in New South Wales and Victoria, but also pay separate land tax in those States.

The proposed reform received significant industry pushback as it was seen as an unfair money grab by the Queensland Government. Significantly, the NSW premier, Dominic Perrottet, announced he would not be providing the Queensland Government with information on the property ownership status of NSW residents.

Benching the Reform

The Queensland Government has again received considerable backlash last week over benching the proposal. The concern is that the failure of the Queensland Government to follow through with the scheme earmarks yet another tax break for the wealthy.

Amy MacMahon, the Greens MP for South Brisbane, criticised the Queensland Government’s misplaced focus on protecting the pockets of the wealthy amid rising homelessness and the housing crisis.

Moving Forward

With criticism on either end, the proposal has been benched for the near future. However, the proposed reform remains a strong indication of the direction the Queensland Government is headed with respect to tax implications on the wealthy.

But for the pushback from the property industry, Queensland homeowners would be suffering considerably higher land tax liability. However, should the Queensland Government continue to bow to industry pressure, future reforms are unlikely to succeed.

 

Author Aspen Roggeveen

The Human Element In Conveyancing & Property Law

We understand how stressful buying and selling property can be. It doesn’t have to be difficult! Let our commercial and residential conveyancing specialists put your mind at ease. With more than 25 years of conveyancing expertise and advanced advocacy skills, we consistently provide timely and accurate advice to advance your interests – all at a reasonable price. We love conveyancing and property law to the extent that we have a separate website dedicated to it! Click here to see it!

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Author

Litigation and dispute resolution

Litigation within the agribusiness sector refers to legal disputes and court actions that arise in connection with agricultural operations. These cases often require in-depth understanding of both the legal system and the unique regulatory landscape of agriculture. Our firm has extensive experience with the full gamut of legal disputes such as:

The key areas that we can assist with include:

  • Contractual Issues: Disagreements often arise from contracts involving supply chains, land leases, share farming, agistment arrangements, partnerships, joint ventures, and various other commercial agreements typical in the agricultural industry.
  • Land Access and Compensation: Conflicts may occur over access to land for activities like mining, gas exploration, or infrastructure development, often involving compensation claims for landowners.
  • Workplace Disputes: Litigation may stem from matters such as wrongful termination, employment agreement breaches, or occupational health and safety concerns on farms or in agribusiness operations.
  • Environmental and Biosecurity: Disputes may be triggered by non-compliance with environmental regulations, pollution events, water contamination, animal and plant health including pest and disease control measures or debates surrounding water usage and rights.
  • Intellectual Property Rights: Conflicts might arise over ownership or use of agricultural intellectual property such as plant variety rights, trademarks, and other proprietary innovations.
  • Farm Succession and Inheritance: Disputes over the division of farming assets, family trusts, or the interpretation of wills often lead to litigation in the context of generational farm transfers.

Rural property acquisitions and sales

The purchase or sale of rural land involves a broad spectrum of legal considerations that require careful attention. Key issues often include legal access to the property, the existence of easements, water rights and entitlements, land zoning regulations, potential land contamination, and the impact of native title, mining interests, and cultural heritage protections. It is also essential to assess the tax implications of the transaction, particularly in relation to Goods and Services Tax (GST) and Capital Gains Tax (CGT).

Salerno Law has extensive experience navigating the complexities of rural property matters at local, national, and international levels. We provide comprehensive support throughout the entire transaction process—from initial due diligence and review of contractual documentation to stakeholder engagement and final settlement. Our goal is to ensure that every legal aspect is addressed thoroughly and efficiently, safeguarding your interests every step of the way.

×

Acquisition and leveraged finance

Opportunities in a tightening market

Borrowers and lenders face increasing pressure as leveraged finance markets tighten in the face of higher interest rates, inflation and geopolitical uncertainty. To explore new opportunities at the outset of any deal, market participants require the support of experienced, detail-oriented advisers who understand the competitive and potentially complex nature of this sector.

Expert advisers with an innovative approach

Ashurst’s global leveraged finance team advises major financial institutions, private equity houses, alternative asset managers, mezzanine financiers and corporations. Leveraged finance is a core area of expertise for Ashurst. Our team has institutional knowledge across sponsors, credit funds and banks, which means we can streamline the process for you. We have experience in the full range of leveraged.