Queensland AFAD and Land Tax Foreign Surcharge Relief in 2026: What Foreign Developers Should Know

Queensland has introduced a more structured relief pathway for certain foreign-linked residential developers dealing with Additional Foreign Acquirer Duty (AFAD) and land tax foreign surcharge exposure.

For foreign companies, trustees of foreign trusts, developers, joint venture groups and private investors involved in Queensland residential development, this is an important 2026 update. The relief pathway is not designed for passive property investment. It is aimed at entities whose commercial activities contribute to Queensland housing supply through genuine residential development.

For developers, the practical message is clear: AFAD and land tax foreign surcharge should be considered before signing a contract, before finalising the ownership structure, and before assuming that relief will be available.

What is AFAD in Queensland?

AFAD stands for Additional Foreign Acquirer Duty. It is an additional duty that may apply when a foreign person acquires certain residential land in Queensland.

In broad terms, AFAD may be relevant where:

• the acquirer is a foreign person;
• the transaction involves AFAD residential land; and
• the transaction is liable for Queensland transfer duty, landholder duty or corporate trustee duty.

AFAD can materially affect the feasibility of a property acquisition. For residential development projects, the extra duty exposure may influence site pricing, funding, project margin, joint venture structure and settlement strategy.

What is the land tax foreign surcharge?

Queensland also imposes a land tax foreign surcharge on certain land held by foreign companies and trustees of foreign trusts.

Unlike AFAD, which is generally a transaction-stage issue, land tax foreign surcharge is an ongoing holding cost. This means a foreign-linked structure may face additional annual land tax exposure while holding Queensland land.

For developers, this can matter during acquisition, planning approval, construction staging, subdivision, pre-sale periods and delayed project delivery. A project that appears viable at acquisition may become more expensive if surcharge exposure is not modelled properly.

What changed for foreign developers?

The Queensland Revenue Office has issued Public Ruling GEN012.1, which sets out an administrative arrangement for eligible residential land developers. The ruling provides a pathway for exemption from AFAD and land tax foreign surcharge where the relevant conditions are met.

The key point is that Queensland has moved toward a more formal, rules-based approach. Developers should not treat surcharge relief as automatic or informal. The process now requires careful attention to eligibility, evidence, timing, corporate structure and ongoing obligations.

The timing is particularly important:

• AFAD relief may apply to relevant liabilities arising on or after 15 December 2025; and
• land tax foreign surcharge relief may apply to relevant liabilities arising on or after 30 June 2026.

This makes 2026 a key planning year for foreign-linked developers acquiring or holding Queensland residential development land.

Who is the relief pathway aimed at?

The relief pathway is mainly aimed at Australian-based foreign entities undertaking residential land development in Queensland.

It is not a general exemption for every foreign buyer. Passive investors, buy-and-hold purchasers and foreign persons acquiring established homes should not assume that this pathway will apply.

The policy focus is housing supply. In practical terms, the relief pathway is more relevant to:

• foreign-linked residential developers;
• Australian-based foreign companies involved in housing supply;
• trust structures undertaking qualifying residential development;
• development groups acquiring land for subdivision or redevelopment;
• foreign-backed joint venture vehicles; and
• groups that can demonstrate a genuine development purpose.

Pre-approval and exemption approval

One practical feature of the new approach is the availability of pre-approval and exemption approval.

Pre-approval may assist a developer in confirming whether certain entity requirements are likely to be satisfied before a specific transaction reaches the final exemption stage. However, pre-approval is not the same as final approval. A developer may still need to apply for final exemption approval once duty liability arises.

This distinction matters. A foreign-linked developer should not rely on a general assumption that the project will qualify. The project, land, ownership structure, development plan and compliance position should be reviewed carefully.

Why ownership structure matters

Foreign surcharge exposure often depends on ownership and control. A transaction may involve a company, trust, corporate trustee, joint venture entity, shareholder group, offshore parent company or layered ownership structure.

Under the new relief framework, developers should expect closer attention to:

• whether the acquiring entity is a foreign person;
• whether the entity is Australian-based;
• who controls the entity;
• whether the group has Australian management, staff and business operations;
• whether the project is genuinely residential development;
• whether the development contributes to housing supply; and
• whether the entity is compliant with relevant legal and regulatory requirements.

This is why the legal structure should be reviewed before the contract is signed. Once a contract is exchanged, it may be more difficult to restructure without creating duty, tax, FIRB, finance or settlement complications.

AFAD, FIRB and land tax should be reviewed together

AFAD is a Queensland duty issue. FIRB is a federal foreign investment issue. Land tax foreign surcharge is a Queensland holding cost issue.

These issues are connected, but they are not the same. A developer may need to consider all three at the same time.

For example, a foreign-backed development group may need to ask:

• Does the buyer require FIRB approval before acquiring the land?
• Does the contract need to be conditional on FIRB approval?
• Will AFAD apply on acquisition?
• Is AFAD exemption potentially available?
• Will land tax foreign surcharge apply while the site is held?
• Can the entity satisfy the development relief requirements?
• Are there ongoing notification obligations?
• Does the ownership structure create additional duty or compliance risks?

Treating these issues separately may lead to incomplete advice. For major residential development transactions, the better approach is to review them together before commitment.

Why passive investors should be careful

The new relief pathway should not be misunderstood as a broad foreign investor concession.

In most straightforward passive investment cases, foreign surcharge exposure may still remain relevant. A foreign person acquiring residential land in Queensland should continue to model AFAD and land tax foreign surcharge carefully.

This is especially important where the buyer is:

• a temporary resident;
• a foreign company;
• a trustee of a foreign trust;
• an overseas investor using an Australian entity;
• a family group with offshore members; or
• a buyer using funds or control structures from overseas.

Relief is more likely to be relevant where there is a genuine residential development project that satisfies the relevant requirements. It is not a simple workaround for foreign buyer duty.

Practical checklist for foreign-linked developers

Before acquiring Queensland residential development land, foreign-linked developers should consider the following:

• Confirm whether the buyer is a foreign person for Queensland duty purposes.
• Check whether the land is AFAD residential land.
• Review whether FIRB approval is required.
• Assess whether the transaction structure involves a foreign company or foreign trust.
• Model AFAD as an upfront acquisition cost unless relief is clearly available.
• Model land tax foreign surcharge as a possible holding cost.
• Consider whether GEN012.1 may apply to the project.
• Review whether pre-approval should be sought.
• Prepare evidence of Australian-based operations, management and development activity.
• Check ongoing notification and compliance obligations.
• Ensure the contract, funding and settlement timetable allow enough time for legal review.

How Ensure Legal can assist

Ensure Legal assists clients with Queensland property transactions, commercial property acquisitions, development matters, FIRB-related issues, conveyancing and contract review.

For foreign-linked developers, investors and private groups, early legal review can help identify whether AFAD, land tax foreign surcharge, FIRB approval, contract conditions or ownership structure issues should be addressed before signing.

If you are considering a Queensland residential development acquisition, it is important to obtain advice before you commit to the transaction.

Key takeaway

Queensland’s new AFAD and land tax foreign surcharge relief pathway may be helpful for eligible residential developers, but it is not automatic and not designed for passive investment.

Foreign-linked developers should treat AFAD, land tax foreign surcharge and FIRB as front-end transaction issues. The earlier these matters are reviewed, the better the chance of managing duty exposure, contract risk and project feasibility.