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For most Queenslanders, land tax is not something they are liable to pay. However, in instances where changes to circumstances occur, including land valuations and ownership transfers, this may affect whether an individual or entity becomes subject to pay land tax on their landholdings.

So, what exactly is land tax, how is it calculated and when do exemptions apply? Our team have put pen to paper to summarise what you need to know to get your head around it.

 

What is land tax?

Land tax is a state based tax applied to freehold land and is calculated on the total taxable value of land held (as at midnight 30 June each year), excluding any land where an exemption applies. Different rates apply depending on the total taxable value of the land and what type of owner you are. For example, if you are a company, trust or absentee, you have a lower threshold compared to an individual landholder.

 

How is it calculated?

Land tax is calculated on the total taxable value of your freehold land. Taxable value is defined as the lesser of either the Land Valuation Act 2010 value (statutory land value) of the land as at 30 June or the average value of the land on 30 June.

The Statutory land value is the value of the land determined by the Valuer-General, Department of Natural Resources and Mines (DNRM) and is included in the annual land valuation notice.

The average value is either the average of the statutory value of the current and previous two financial years or the current year’s statutory land value multiplied by the averaging factor of the year (where the previous two statutory land values are not available). The averaging factor as at 30 June 2017 is .94 but it does vary depending on the year.

 

What exemptions apply?

Depending on the ownership and use of the land, exemptions to land tax apply for eligible land owners. This can include:

  • Land used as your home. Please note that you can only claim one property as your home, whether it be in QLD or elsewhere;
  • Land used for business of agriculture, pasturage or dairy farming;
  • Land used by non-profit clubs, associations, societies and charitable institutions; and
  • Land on which an aged care facility, retirement village or supported accommodation service is located.

 

Tax Rates

If you are liable to pay land tax, the following rates apply:

For resident individuals

Taxable Value of Land $ Land Tax Payable $
0-599,999 Nil
600,000 – 999,999 500 +1.0% of the excess over $600,000
1,000,000 – 2,999,999 4,500 + 1.65% of the excess over 1,000,000
3,000,000 – 4,999,999 37,500 + 1.25%    of the excess over 3,000,000
5,000,000 or more 62,500 + 1.75% of the excess over 5,000,000

 

For companies, absentees and trustees

Taxable Value of Land $ Land Tax Payable $
0-349,999 Nil
350,000 – 2,249,999 1,450 + 1.7% of the excess over 350,000
2,250,000 – 4,999,999 33,750 + 1.5% of the excess over 2,250,000
5,000,000 or more 75,000 + 2% of the excess over 5,000,000

 

If you have received a land tax notice and believe you should be exempt or, if you have any questions or concerns relating to land tax, please contact our team on (07) 4632 1966.

 

 

GENERAL ADVICE WARNING | The information provided in this article is for general information purposes only. It is not intended to be, nor should it be read as specific taxation advice. Before acting on any of the information contained in this article you should obtain special advice from a specialist advisor, which is appropriate to your specific business risk needs, objectives and situation.