Land tax changes following 2019-2020 State Budgets

26 June 2019

In recent weeks, the Queensland and Victorian Governments have handed down their 2019-2020 Budgets. Each Budget contained land tax changes which are summarised below.


(i) Foreign land tax surcharge

(a) Overview

A new land tax foreign surcharge of 2% will apply to foreign companies and trustees of foreign trusts that own land in Queensland (QLD Surcharge). The QLD Surcharge will be imposed on the taxable value of the land that exceeds $350,000.

The QLD Surcharge applies from the 2020 land tax year onwards (ie from 30 June 2019).

(b) Who is impacted?

For QLD Surcharge purposes, a trust or company will be deemed to be a foreign trust or company if at least 50% of the units/shares in the entity are foreign interests. A foreign interest includes any interest held by a foreign company or the trustee of a foreign trust.

If an Australian resident trust or company is deemed to be a foreign trust or company, any entity in which that Australian resident trust or company holds at least a 50% interest should also be deemed to be a foreign trust or company for the purposes of the QLD Surcharge rules. This is an important consideration for QLD properties held via 50/50 joint venture (JV) vehicles where only one JV partner is a foreign trust/company. In such circumstances, the JV vehicle may be subject to the QLD Surcharge in full (despite only 50% foreign ownership).

(c) Features

The QLD Surcharge:

- will be imposed on all land types (i.e. including commercial, retail, and industrial);

- applies to any trust or company which has at least 50% foreign ownership and foreign interests held by unrelated interest holders will be aggregated when applying this test;

- is not currently expected to contain ex-gratia relief for non-residential owners under any circumstances; and

- does not contain a carve out for publicly listed companies and wholesale trusts (which is different to the position adopted in NSW and Victoria).

The Queensland Government is currently in consultation with certain lobby groups and key stakeholders (including the Property Council of Australia) regarding guidelines for ex-gratia relief (Guidelines). The Guidelines are expected to be released in mid-July 2019. . Landowners will need to consider the impact of the QLD Surcharge on their existing landholdings and whether ex-gratia relief could be available in their specific circumstances.

(ii) Other changes

The Queensland Government has also increased the general land tax rate imposed on companies and trustees with landholdings of $5 million or more. In this regard, from 30 June 2019, the general land tax rates:

- will increase from 2% to 2.25% for companies and trustees with landholdings of more than $5 million but $10 million or less;

- will increase from 2.5% to 2.75% for companies and trustees with landholdings of more than $10 million.


Currently, certain foreign resident entities are subject to a 1.5% land tax surcharge rate for all types of land in Victoria (Victorian Surcharge). Ex-gratia relief is granted in certain circumstances. More information regarding Victoria’s ex-gratia relief is detailed in our earlier Riposte.

The Victorian Government announced in the 2019-2020 Budget that the Victorian Surcharge rate would be increased from 1.5% to 2% for the 2020 land tax year onwards. The increased rate is now in line the surcharge rate imposed in NSW (albeit the NSW land tax surcharge rate only applies to residential land).


Following the recent Budgets, Queensland, Victoria and NSW now impose a 2% land tax surcharge rate on land held by foreign owners. The definition of a foreign owner and the types of land that the surcharge applies to varies between each State.

Given the potential annual costs for landowners from these land tax surcharges, foreign landowners will need to consider their potential land tax liabilities carefully including whether ex-gratia relief is available.




Andrew White



John Avery



Chris Aboud

Senior Associate