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Queensland Land Tax

Written by Michal Park

You may have heard that the way Qld land tax is charged is changing.  From 1 January 2023 (to be applied from the 2023/23 financial year), the total value of Australian land held which will now be used to calculate land tax in Qld.  It’s almost like Queensland has a future Olympics to fund.

Things to remember:

  • The tax-free threshold is still $600K for individuals (ie individuals pay land tax if they hold land above $600K)
  • If you only own Qld land, the new changes do not affect you
  • Your own home is excluded from the calculation.

Why is the Qld government doing this?

They believe this will tackle the housing affordability crisis by deterring interstate property speculators who can claim the tax-free threshold and take advantage of lower land tax rates in multiple states.

What are the possible consequences of these new changes?

  1. Landlords may raise rents to pass on these costs
  2. Brisbane investors will sell their associated properties

Example

Let’s take the case of Joe.  Joe owns his own home in Brisbane and has two investment properties: one in Brisbane and one in Melbourne.  The land values of these properties are as follows:

$500,000 Brisbane principal residence

$745,000 Brisbane investment property

$2,500,000 Melbourne investment property

2022/2023

To calculate his Qld land tax for this financial year 2022/23, the calculation is as follows:

His own home is exempt.  The first $600K land tax value is also exempt.  So Joe is taxed on the remaining $145K ($745K – $600K). *See tax thresholds below*

$500 + (1c x $145K)

$500 + $1,450

$1,950 land tax due for the 2022/23 financial year.

2023/2024

To calculate his Qld land tax for next financial year 2023/24, the calculation is as follows:

Again, his own home is exempt.  The first $600K land tax value is also exempt.  However, Joe’s Qld land tax calculation is based upon the total value of his Australian land – that is, $745K Brisbane + $2,500K Melbourne = $3,245K in total. *See tax thresholds below*

$37,500 + (1.25c x $245K)

$37,500 + $3,062.50

$40,562.50 land tax calculation for the 2022/23 financial year.

This is then pro-rated according to his Qld land holdings as follows:

$745,000 Brisbane land/$3,245,000 Melbourne land x $40,562.50

$9,312.50 land tax due for the 2022/23 financial year.

The onus is on Queensland landholders to alert the Queensland Revenue Office of any interstate holdings in order to avoid penalties.

Total taxable value Rate of tax
$0–$599,999 $0
$600,000–$999,999 $500 plus 1 cent for each $1 more than $600,000
$1,000,000–$2,999,999 $4,500 plus 1.65 cents for each $1 more than $1,000,000
$3,000,000–$4,999,999 $37,500 plus 1.25 cents for each $1 more than $3,000,000
$5,000,000–$9,999,999 $62,500 plus 1.75 cents for each $1 more than $5,000,000
$10,000,000 or more $150,000 plus 2.25 cents for each $1 more than $10,000,000

 

 

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