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Whether land tax is payable by a property owner depends on the unimproved value of its
combined land holdings calculated with effect from midnight on 30 June in each year.

Different rates of land tax apply to different types of entities and, as the tax is calculated
on the combined land holdings, the more property an entity owns, the more land tax it

It becomes more complicated and requires a little more attention when an entity uses
various trusts which they control to own two or more properties.

In previous land tax years, several trusts could utilise the same trustee and the land tax
liability would be based on the respective land holdings of each trust and each trust
would be taxed separately.

New rules provide that, where two or more trusts with the same trustee and
beneficiaries own two or more properties, the land holdings of those separate trusts are
combined for the purposes of calculating the land tax liability.

In our experience, it is extremely common for property developers and land holders to
use the same trustee company as trustee for several trusts and, if the letter of the law is
applied, these new rules could result in a dramatically increased land tax burden.


Section 20 of the Land Tax Act 2010 (Qld) provides that:

(1) The liability for land tax of a tax payer who is a trustee of a trust must be separately
assessed on the taxable land that is subject to the trust, as if that land was the only land
owned by the tax payer as a trustee.

(2) Sub-section 1 will not apply if:

(a) the taxpayer is the trustee of more than one trust; and

(b) the interest of the beneficiaries of two or more of the trusts are, when the tax payers
liability for land tax rises, the same.

(3) If sub-section 1 does not apply, the tax payers liability for land tax as trustee of the
trust mentioned above will be assessed on the total taxable value of all taxable land that
is subject to those trusts.


If subsection 20(3) set out above applies, one single assessment will be issued to that
trustee for all the taxable land which is subject to the trusts. Therefore for example, if
the unimproved value of 2 properties owned by 2 different trusts with the same trustee
equalled a total value of $2,000,000.00, the land tax payable would be approximately

If the trustees of the various property holding trusts are different entities, separate
individual assessments will be issued to those trustees. If for example, there were 2
properties owned by different trusts with different trustees and the unimproved value of
those properties equalled $1,000,000.00 per property, a separate assessment for each
property would be issued of approximately $12,500.00 per property. Therefore the land
tax payable on those 2 properties combined equals $25,000.00.

Using this very basic example, there is a $4,500.00 difference in the amount of land tax
payable annually.


If you or your clients hold real property in different trusts with a common trustee, you
should immediately have the relevant trust deeds reviewed to determine the impact of
these changes.

We have devised a fixed price, cost effective and simple process to review our clients'
trust deeds and make amendment as necessary to lessen or negate the impact of these

To find out more contact Rob Lalor on 3852 5055 enor

The advice contained in this newsletter is general in nature. If you require specific advice
on your rights in relation to situation please contact us on 3852 5055 or

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