Extra 24,000 properties subject to Queensland land tax amid climbing land values

Due to the continued rise in land values in Queensland, tens of thousands of additional properties were brought into the land tax net last year. Queensland property owners with investment properties are required to pay land tax if the total value of their land exceeds the $600,000 threshold. According to the latest data from Queensland Treasury, the number of properties liable for land tax reached 194,579 in the 2023-24 financial year.

This represents a 14% increase in the number of properties liable for land tax compared to the previous year, when there were approximately 170,660. Concurrently, the number of individuals liable for land tax also increased by 30%, rising from around 41,200 in 2022-23 to approximately 53,400 in 2023-24. The $600,000 land tax threshold was set nearly two decades ago in 2007. The newly elected state Liberal National Party government has confirmed that it will not be making any changes to it.

In the recent state budget, Treasury projected land tax revenue of just over $2 billion for 2023-24, an increase of $300 million from the previous year. The Queensland Revenue Office relies on valuations released by the state valuer to determine whether someone’s total land value exceeds the $600,000 land tax threshold. In recent years, the state valuer has released substantial increases in land values across the state. For example, land values in Brisbane increased by 17.5% in 2022 and a further 11.9% in 2023. On the Gold Coast, land values soared by 36.8% in 2022 and then increased by another 25% in 2024.

Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said the increase in the number of properties liable for land tax was “quite significant”. She suggested the land tax threshold should be indexed to the Consumer Price Index (CPI). “We’ve been vocal on this issue for some time,” Ms Mercorella said. “The $600,000 threshold was set in 2007. It is now 2024. I think everyone in the community recognises that property prices in Queensland have increased significantly. We think it’s time the land tax application values were recalibrated.” Ms Mercorella also said the cost of land tax could cause investors to sell their properties.

Treasurer David Janetzki said in a statement that the newly elected Liberal National Party government had “no plans” to change the state’s land tax settings. He also pointed out that land tax exemptions are available if the property is someone’s primary residence. “The $600,000 threshold also means those with a small number of investment properties generally only pay a minimal amount of land tax,” he said. “In particular, from 1 January 2024, Victoria lowered its land tax threshold to just $50,000, meaning Queensland’s individual threshold is 12 times that of Victoria. The government’s core focus in the housing market is stamp duty relief, which is why we are abolishing stamp duty for first home buyers purchasing new homes.” A spokesperson for Queensland Treasury acknowledged that more landholders may reach the land tax threshold as land values increase. “However, many of these landholders will be eligible for an exemption on their home,” they said. “Queensland’s land tax uses a three-year average land valuation system, which helps to smooth the impact of rising land values on the amount of tax a landholder pays.” Queensland Treasury confirmed that 26,515 land tax exemptions were provided to first-time taxpayers in 2023-24, and 21,391 exemptions were provided in 2022-23. They also noted that properties liable for land tax may include those with exemptions where at least one owner is liable for land tax. The land tax threshold for companies and trusts is set at $350,000.