On 15 December 2025, the Queensland Revenue Office (QRO) released a series of new and updated public rulings clarifying how relief from the foreign surcharge and Additional Foreign Acquirer Duty (AFAD) will be administered going forward. The update represents a meaningful shift in how Queensland approaches foreign ownership of land, particularly for developers and landholders who contribute to housing supply or economic activity.
While the foreign surcharge regime itself remains in place, the new rulings introduce clearer administrative pathways for exemptions and draw a firm distinction between older discretionary relief and future treatment.
Understanding these changes is essential for foreign buyers, developers, trustees, and advisers involved in Queensland property transactions.
Foreign surcharge and AFAD: brief context
Queensland imposes additional tax measures on certain foreign persons, including:
• Additional Foreign Acquirer Duty (AFAD) on dutiable transactions involving Queensland land, and
• a foreign surcharge on land tax for foreign companies and trustees of foreign trusts.
Historically, relief from these measures was limited and largely discretionary, often requiring ex gratia applications after liability had already arisen.
What has changed under the December 2025 update
The key development is the introduction of formal administrative arrangements, replacing some reliance on ad hoc ex gratia relief.
The Commissioner of State Revenue has now issued new and amended public rulings that provide structured guidance on when exemptions may apply, particularly for developers and economically active landholders.
New administrative exemptions for residential developers
A new ruling establishes an administrative arrangement under which certain foreign residential land developers may be exempt from both:
• AFAD, and
• the land tax foreign surcharge,
for relevant liabilities arising from late 2025 onwards.
This marks a departure from the previous approach, where developers were required to seek discretionary relief after assessment. The new framework offers greater predictability for qualifying projects, particularly those that add to housing supply rather than holding land passively.
Clearer exemption framework for economically active landholders
Another new ruling clarifies when land owned by foreign entities may be exempt from the land tax foreign surcharge due to its economic use.
Where land is used in a way that makes a significant contribution to the Queensland economy, such as through active commercial or industrial operations, the landholder may qualify for an administrative exemption. This is particularly relevant for foreign-owned businesses holding operational land rather than investment land.
Defined cut-off dates for old and new treatment
The update also introduces clear temporal boundaries:
• transactions and liabilities arising before 15 December 2025 remain subject to existing ex gratia relief guidelines;
• land tax surcharge matters up to 30 June 2026 are governed by updated transitional guidelines;
• future transactions are assessed under the new administrative framework.
This distinction is critical for ongoing matters, as different rules may apply depending on transaction timing and assessment dates.
What has not changed
It is important to note that:
• Queensland has not removed AFAD or the foreign land tax surcharge;
• exemptions are not automatic and depend on meeting specific criteria;
• passive landholding by foreign entities remains heavily taxed.
Foreign buyers of residential property who do not qualify under development or economic contribution criteria should not assume any reduction in tax exposure.
Practical implications for buyers, developers and trustees
These changes are particularly relevant for:
• foreign-backed residential developers planning new projects;
• foreign companies holding commercial or industrial land in Queensland;
• trustees assessing whether a trust may be treated as a foreign trust for land tax purposes;
• purchasers currently structuring transactions close to the transition dates.
Early legal and tax advice is critical, as eligibility for exemption depends not only on ownership structure but also on land use, development intention, and timing.
How Ensure Legal can assist
Ensure Legal advises local and international clients on Queensland property transactions, including:
• assessing foreign person status and surcharge exposure;
• structuring acquisitions and developments to manage AFAD and land tax risks;
• advising on eligibility for administrative exemptions and relief;
• liaising with the Queensland Revenue Office on assessments and rulings.
Each matter turns on its specific facts. The recent QRO update increases certainty, but careful analysis remains essential to avoid unexpected duty or land tax liabilities.
If you are considering a Queensland property transaction involving foreign ownership, or if you are a developer or trustee affected by the foreign surcharge regime, tailored advice should be obtained before contracts are entered into.
