The recent Queensland State Budget 2019/20 will see land tax increases, especially for companies and trustees with landholdings above $5 million, and for foreign individuals who own land in Queensland and do not ordinarily reside in Australia.
As at 30 June 2019, the changes include:
- an increase in land tax rates from 2% to 2.25% for companies and trustees with landholdings of more than $5 million but less than $10 million;
- an increase in land tax rates from 2.5% to 2.75% for companies and trustees with landholdings of more than $10 million;
- the absentee surcharge will increase from 1.5% to 2% and similarly apply to foreign individuals who own land and do not ordinarily reside in Australia; and
- a new land tax foreign surcharge of 2% will apply to foreign companies and trustees of foreign trusts that own land in Queensland.
These changes will result in Queensland facing a significantly broader foreign land tax surcharge than NSW and Victoria, affecting far more landowners. As a result, the Property Council has delivered a submission to the Office of State Revenue seeking broader exemptions, including:
- An exemption for listed entities and wholesale trusts, as per the Victorian surcharge.
- An avenue for ex gratia relief for both residential and non-residential owners and investors who can demonstrate a ‘significant contribution to the local economy’.
- A longer period for ex gratia relief, and the opportunity to renew and extend exemptions.
- Recognition of the need to extend relief beyond the development phase for some projects.
- Proportional treatment for co-owners.
We will keep you posted on the outcome of this proposal. Regardless, it seems the Queensland Government has rolled the dice on the future of foreign investment and property affordability for residents, tenants, homeowners and corporations who all contribute to our economic growth.
Property and Legal provide advice on all property transaction related matters including Land Tax obligations. For further information, contact our offices.