What is land tax?
Land tax is a state tax that may be imposed on landowners of freehold land in Queensland under the Land Tax Act 2010 (Qld) (Act).
How is it calculated?
The Office of State Revenue calculates a landowner’s land tax liability based on the total taxable value of land owned by landowners at midnight on 30 June each year.
A landholder will have a land tax liability where:
- They are an individual and own land with a taxable value totalling $600,000.00 or more; or
- They are a company, trustee or absentee and own land with a taxable value totalling $350,000.00 or more.
It should be noted that the taxable value of land is not the same as the market value. The taxable value is the lesser of the Land Tax Valuation Act 2010 value of the land (which you will generally find stated on your rates notice) and the averaged value of the land on 30 June of the relevant year.
Are there exemptions?
There are some exemptions that may be applied for under the Act.
For example, an exemption may be claimed for land used solely as a home where the following conditions are met:
- The land is comprised in one parcel; and
- The land is owned by a person and used as the person’s home (excluding a trustee or manager of a time-sharing scheme) or is owned by a non-absentee trustee of a trust and used as the home of all beneficiaries of the trust; and
- The land is not used for a non-exempt purpose. Non-exempt purposes include purposes such as use of part of the land for business purposes (such as home offices or sheds from which business activities are carried on from).
Where the land is used as a home but also for a non-exempt purpose, a particular exemption may apply.
Exemptions must be applied for. The Office of State Revenue will not automatically apply exemptions (even where, for example, when you purchased the property, you claimed a transfer duty concession on the basis that you were going to occupy the property as your home). In the case of the home exemption, where the exemption is allowed, it will continue to apply until the landowner notifies the Office of State Revenue of any change in eligibility.
The taxable value of land subject to an exemption is excluded from the calculation of any land tax assessment. This may have the effect of simply reducing your land tax liability or eliminating it entirely.