In our July 2019 alert on significant Queensland land tax increases, we flagged the introduction of a 2% 'absentee owner' land tax surcharge (AOS) for ‘foreign companies’ and ‘foreign trusts’ that own land in Queensland.

The AOS, which is effective from the 2019-20 land tax year onwards, applies to each dollar of taxable Queensland land value above $349,999.
Importantly, this measure applies to all types of land (i.e. residential, commercial, industrial or otherwise) unless that land is otherwise exempt from land tax.

Pleasingly, the Queensland Government has announced that it will introduce guidelines to exempt certain taxpayers from the foreign owner land tax surcharge that was introduced by the Revenue and Other Legislation Amendment Act 2019 (Qld).

The Queensland 2019-2020 Mid-Year Fiscal and Economic Review, released on 12 December 2019, says:

"The Queensland Government is committed to maintaining competitive taxation settings, and will establish guidelines, in consultation with stakeholders, that provide relief for commercial activities that make a significant contribution to the state economy. This will ensure Queensland continues to be an attractive destination for investment."

While the detail of such guidelines will not be available until at least January 2020, the government has indicated that it intends to mirror the Victorian regime, which governs exemptions from the Victorian ‘absentee owner’ land tax surcharge. If this is the case, exemptions should be available for listed groups and widely-held trusts, as well as for taxpayers with development projects or businesses that significantly contribute to the Queensland economy.

The Queensland Government forecasts that the exemption regime will result in a fall in land tax receipts by $291 million over the four years to 2022-23.
The proposed exemption regime is in large part the result of months of advocacy by the Property Council of Australia (PCA), with specialist assistance provided to the PCA by MinterEllison.

Please contact us if you have any questions regarding how the new exemption regime might benefit you, your business or your investments.