Land tax is something every property owner in Queensland should be aware of. If you own land, you might need to pay land tax each year, depending on the value of your property and how you own it. This guide will help you understand what land tax is, how it works, and what you need to do.
What is Land Tax?
Land tax is a state tax charged on freehold land in Queensland. It’s calculated on the total taxable value of the land you own as of midnight on 30 June each year. The tax you pay depends on who owns the land, how much it’s worth, and whether you qualify for any exemptions. The money collected goes towards funding public services and infrastructure in Queensland.
Who Needs to Pay Land Tax?
Land tax applies to different types of landowners, including:
- Individuals
- Companies
- Trustees, including those managing self-managed super funds
- Absentee owners (if you don’t usually live in Australia)
Land tax applies to different types of freehold land, such as vacant land, investment properties, commercial properties, and strata-titled properties like units and townhouses.
How is Land Tax Calculated?
The amount of land tax you need to pay is based on the total taxable value of all the land you own in Queensland at 30 June. This value is worked out in two ways:
- The statutory land value determined by the Queensland Valuer-General.
- The averaged value, which takes into account the land valuations from the current and previous two financial years.
You’ll be taxed based on the lower of these two values.
When Do You Need to Pay Land Tax?
Not every property owner has to pay land tax. The tax only applies if your total taxable land value is:
- $600,000 or more if you are an individual or a trustee of a special disability trust.
- $350,000 or more if you are a company, trustee, or absentee owner.
What Happens if You Buy or Sell Land?
If you buy or sell land, you should be aware of how land tax applies:
- Land tax is assessed as of 30 June each year, so if you own land on this date, you’re responsible for any land tax owed.
- If you buy land after 30 June, the seller is still responsible for land tax for that financial year.
- If a buyer takes possession of the land before settlement (such as under a vendor finance arrangement), they might be liable for land tax.
- Buyers can apply for a land tax clearance certificate to check if there’s any outstanding land tax on the property they are purchasing.
Are There Any Exemptions?
Some landowners may qualify for exemptions, which can reduce or remove their land tax liability. Common exemptions include:
- Your home (principal place of residence) – If you live in the property, you might not have to pay land tax.
- Primary production land – If your land is used for farming, it could be exempt.
- Charitable organisations – Land used for certain religious, educational, or charitable purposes may be exempt.
Keeping Track and Paying Land Tax
To stay on top of your land tax obligations, keep records of your land valuations, ownership details, and any exemptions you apply for. You can pay land tax as a lump sum or set up an instalment plan through the Queensland Revenue Office.
Key Points to Remember
- Land tax is assessed on the land you own at midnight on 30 June each year.
- Different tax thresholds apply depending on whether you are an individual, company, or trustee.
- If you buy or sell land, land tax liability depends on who owns the land on 30 June.
- Some exemptions apply, such as for owner-occupied homes and primary production land.
If you have any questions or need legal advice about land tax, the team at Ensure Legal is here to help.
