Queensland to include interstate landholdings when calculating land tax
The Queensland government has become the first state or territory to include interstate landholdings in the calculation of land tax. The change means that land tax in Queensland will be calculated on the total landholdings in Australia.
The new land tax calculations will first apply to 30 June 2023 assessments.
Currently, each state and territory governs land tax independently. Until now, an individual could take advantage of this by purchasing taxable land in multiple jurisdictions and claiming multiple tax-free thresholds.
The new Queensland legislation appears to be designed to plug this "loophole".
Example
Jordi owns multiple properties across Australia, with the following land tax statuses and values:
main residence in Queensland - exempt
Under the current rules, Jordi is liable in Queensland for the 2 investment properties as the combined value is above the $600,000 tax-free threshold:
($700,000 - $600,000) × 1.0% + $500 = $1,500
However, under the new land tax rules, Jordi's total Australian landholdings are taken into account, which pushes him into the next tax threshold:
($1,200,000 - $1,000,000) × 1.65% + $4,500 = $7,800
The gross land tax on the entire Australian landholdings is then pro-rated for Jordi's taxable properties in Queensland:
Queensland land tax = Gross land tax × Queensland landholdings ÷ Australian landholdings
$7,800 × $700,000 ÷ $1,200,000 = $4,550
What if I only have land in Queensland?
If you only have land in Queensland, there is no change at all.
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