Thousands more Queensland properties subject to land tax as values rise

The Queensland government makes more than $1.7 billion a year from land tax. (ABC News: Christopher Gillette)

The number of properties subject to land tax in Queensland has jumped more than 10 per cent in the past financial year as the value of land continues to rise.

In Queensland, individuals are charged land tax when the total land value of their investment properties is worth $600,000 or more.

The $600,000 threshold has remained unchanged since 2007, which is something the Real Estate Institute of Queensland (REIQ) objects to.

The stakeholder group, which advocates for property investors, wants the threshold to increase in line with inflation, suggesting the unchanged threshold is leading to a kind of bracket creep.

But the state government has hit back at the proposal, insisting that indexing the threshold would cost the state budget as much as $200 million per year in revenue.

New figures from the Queensland Revenue Office show that in the 2022-23 financial year, 175,556 properties were subject to land tax — up from 157,485 the year before.

The number of individuals who were liable to pay land tax after exceeding the $600,000 threshold also increased from 34,021 in 2021-22 to more than 44,000 in 2022-23.

The increase in properties falling under the land tax regime comes amid rising land valuations across the state.

In Brisbane, for example, Queensland’s valuer-general determined that land values increased by 17.5 per cent in 2022, followed by another 11.9 per cent jump in 2023.

In Ipswich, land values climbed 23.1 per cent in 2022, followed by another increase of 33 per cent in 2023.

The Queensland Revenue Office has also confirmed it issued 19,382 land tax exemptions to first-time taxpayers in 2022-23, which was up from the 12,340 issued the year before.

‘Massive windfall’

REIQ chief executive Antonia Mercorella said the existing situation meant many more property investors were paying the tax and the REIQ wanted the threshold to be indexed in line with CPI.

“It’s logical that we are seeing thousands more properties being subject to the land tax regime because of course we know that the median price of property has gone up significantly,” she said.

“This represents a massive windfall for the state government and, certainly, we have been saying for many years that it really is time to review that threshold.

“Our concern is that land tax does act as a fairly significant deterrent for investment. And of course, there is an argument that inevitably that land tax bill gets passed onto the renter.”

[Graphic: Land tax]

In a statement, Deputy Premier and Treasurer Cameron Dick said Queensland had one of the most generous land tax thresholds in the country.

He also pointed out that the tax did not apply to the family home.

“Queensland collects less than half as much in land tax per capita as New South Wales or Victoria. This revenue funds the frontline,” he said.

“Queensland Treasury forecasts that the cost of indexing land tax would reach more than $200 million in forgone revenue each year from 2025-26.

“Anyone proposing that land tax be cut would need to identify what services or jobs would be cut to pay for that loss of revenue.”

The latest figures in Queensland’s mid-year budget showed the state government made $1.73 billion from land tax in 2022-23, which was a $99 million increase from 2021-22.

And the revenue was tipped to grow even further this financial year to $2.03 billion, and then reach $2.32 billion by 2024-25.

While the land tax threshold for individuals sits at $600,000, for companies and trusts it is set at a lower $350,000.

The threshold for companies and trusts also has not changed since 2007.