Land Tax: BIG changes in QLD! [How to Beat the System!]

We're discussing the Office of State Revenue in Queensland imposing stronger land tax bills on Australian Property Owners (especially interstate investors in QLD!). What are the changes which have been made and how you can build out a land tax effective property portfolio
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Any information provided by us is provided as general information and for general information purposes only. We have not taken the Listeners’ personal and financial circumstances into account when providing information. We must not and have not provided legal, financial or taxation advice to the Listener. The information provided must be verified by the Listener prior to the Listener acting or relying on the information by an independent professional advisor including a legal, financial, taxation advisor and the Listener’s accountant. The information may not be suitable or applicable to the Listener’s individual circumstances. We do not hold an Australian Financial Services Licence as defined by section 9 of the Corporations Act 2001 (Cth) and we are not authorised to provide financial services to the Listener, and we have not provided financial services to the Listener.
buyers agent
brisbane
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property australia
property investment
land tax
queensland
interstate investors
changes in land tax
queensland government
real estate
boom or bust

[@joebloggs24]

The "Land Tax" was the reason my ex-landlord decided to place 20-30% hikes on our rent. Because we were all good payers and got along well, he thought we'd stay and pay it. We didn't though, we all left within a month of each other and he's been struggling to rent it at those inflated rates all year. I'm now 7.5 months living in my car, and all going well with saving $11,000 this year alone

[@lukewiles1]

Good on you for going minimalist and growing your savings!

[@roto762]

Bro, this is the best property investment channel in Australia! Not even Michael Yardney beats you! Nice one and keep on going! 👏🏼💪🏼

[@lukewiles1]

Thanks Jose! Appreciate the feedback 🙏

[@rickpakuza5887]

I questioned a Real Estate in Queensland why are the Council rates double to NSW. He told me that there are less people in Queensland than in NSW. With this new land tax there will be even less.

[@lukewiles1]

Yeah definitely see investors re-running the numbers and strategy when buying in qld

[@yolundyvandyk2226]

Great INFORMATION ~ thanks! 😊

[@MsSeine]

Yes QLD land tax changes now effective! This should chase out a few investors and let property return to its intended purpose: homes. With the Fed Gov to pocket $2 billion by wiping national investor concessions, to redirect into fixing the housing shortage, I think these are next!

[@smithchip2028]

Good information. I have few properties under family trust in Victoria. With trust don't get the principal residence or land tax exemption which sucks. Unfortunately they charge higher rates under trust and it quickly add up. In the long run wonder if we could avoid land tax by nominating each property to different primary beneficiaries? Or possibly transfer properties to beneficiaries personal name without having to pay stamp duty again. Accountants "I spoke to so far" never gave straightforward answers lol...

[@lukewiles1]

Yeah it definitely comes down to your individual situation... an Accountant should be able to give you a firm answer as to the cost vs benefit of making these changes!! Can mean thousands or 10k+ difference in land tax

[@12345xfire]

In VIC, property owned by a trust can have a beneficiary nominate this as their PPOR but it doesn't remove land tax, just stops the trust surcharge rate. Best to hold the PPOR as an induvial to avoid it altogether.

[@smithchip2028]

@@12345xfirethanks for reply, is there a limit to how many properties you can nominate? I was told, I will need to pay stamp duty to change to personal name from trust even if I'm a beneficiary

[@12345xfire]

@@smithchip2028 Yes, each beneficiary can only nominate one trust property, and if you own a PPOR as an individual and are living in that, you can't nominate any trust properties. Yes, as you stated, moving a property from one ownership structure to another will incur stamp duty and is very costly.

[@smithchip2028]

@@12345xfire thanks for the info. It's costly to maintain trust, I am hoping when I do eventually sell the properties, will benefit from distribution income from the trust.

[@dylanpan1383]

You forgot to mention the impact of negative gearing. There is not way you can do negative gearing using a trust or company. You also forgot to mention there is no CGT discount for company structure.

[@lukewiles1]

I can't cover everything in a 10min video! Agreed property should be cashflow positive in a trust. Also investment in a trust would allow 50% CGT discount. Buying in company structure is less common unless undertaking a development

[@financeok5964]

I think more and more states will bring this in. In SA they group everything together now doesn’t matter if you own via pty ltd and will group everything together and trust you pay above $25K

[@lukewiles1]

I have to agree that this is likely to be a trend by the state's to charge more for land tax based on your total Australian land holding. Aggregation will be an interesting point regarding companies/trusts

[@sallyjohnson5985]

If all states brought this in, then property owners would be double or even triple taxed by the effect of duplication by state governments for the same properties. This ability to tax outside of jurisdiction should be legally challenged. But who is gonna be the one to do that?

[@financeok5964]

@@sallyjohnson5985 yep 100% should be commonwealth / Federal taxes not state like GST then they give xxxx amount back to the states like GST

[@matthewxcountry]

​@@sallyjohnson5985 Most states have a threshold for not paying land tax, meant for someone to buy their first small investment property or residence, by getting a tax discount. In some sense, folks in certain states have been using these rules to accumulate one small property in every state and paying no or little tax because they are under the threshold in each state individually, even though they are quite wealthy across all states. What some states are doing is grouping all your properties across Australia to assess your rate and whether you meet the thresholds for getting this tax discount, but they aren't taxing you on the property in the other state directly. They are doing a pro-rata calculation to tax your property within the state at a rate comparable to a property investor who owns six properties in that state rather than 6 properties all over Australia. Seems fair. Of course it is alo fair to try to avoid paying that tax if you can do so legally.

[@sallyjohnson5985]

Thanks for the video. As NT do not levy land tax, how would the Qld Gov treat my NT property? I presently pay land tax in Qld where I live.

[@lukewiles1]

The new calculations are based on your Australian taxable land to confirm the rate and then apportioning the land tax based on your QLD property (divided by total taxable property). So likely outcome is your land tax in QLD will increase

[@gadha707]

Thanks for your video. Is there a difference in application of this rule whether your home location (location of your the primary dwelling and usual place of residence) is QLD or not?

[@lukewiles1]

Primary residences are exempt from land tax calculations, no matter where the property is located in Australia

[@this_isMarcus]

Nice breakdown Luke, curious what happens if you sell a property during the year. Will they still pro rata for the duration of ownership?

[@davidjustsimplefun8484]

Hey Luke. Thank you for this info. I understand this land tax plan has now been scrapped. Can anyone tell me where I would stand if I sell my rural property in nsw and buy a rural property in qld when I already have a house in the suburbs in Brisbane?

[@lukewiles1]

Best for you to check with an accountant on this one!

[@YeloPartyHat]

I'm a bit confused. Is the land tax on the price of the land or the building + land?

[@lukewiles1]

Land tax is based on the governments annual land tax valuation (land only)

[@catherinegou7794]

Thx for sharing the video. I have a main residential property under my name in VIC, a property under trust in VIC and thinking about to buy a property under SMSF in QLD under 350k land value. Are they gonna charge me land tax in QLD ？

[@smithchip2028]

I heard buying under SMSF is costly. Do you already have a SMSF? Wonder if you could take out cash from SMSF and give % return. Then use that cash for deposit

[@catherinegou7794]

@@smithchip2028 Na, buy the property under SMSF. Can’t get the money out before I retired.

[@lukewiles1]

Assuming you have a Corporate Trustee above your SMSF trust in QLD it will receive a 350,000 land tax threshold in QLD - so that would be no land tax

[@catherinegou7794]

@@lukewiles1 yeah, will set up corporate trustee, but what if I set up individual trustee, is there any difference if I rent out my main residential property in some day.

[@lukewiles1]

@@catherinegou7794 sounds like your really need to have a chat with an investment savvy accountant. If you changed the purpose of your own home to an investment this would be included in your total taxable land and potentially increase your land tax rate in QLD

[@AquaMarine1000]

State matters are not the realm of interstate governments, it's a wealth tax in disguise. All it will do is introduce State land taxes where none apply. A court challenge on the Constitutional legality is in order.

[@lukewiles1]

I'm not a fan either... hope it gets overturned otherwise the other states might follow suit!

[@vinnishbaby7222]

Thanks Luke for the vedio. Super informative

[@jeanvonbarberode2377]

For the normal people I do understand that if you reside in QLD and have 2 other properties in Victoria and all land (not the house) is 50/50 titled between you and your partner, then you can ask for exemption for the QLD residence and you and your partner (every individual) has 600K threshold, so together as couple you have 1.2mil threshold, so those 2 properties (just the land) in Victoria is easy within the threshold (if you have townhouse or unit) So no land tax for QLD gov. This new tax duty will restrict people to own less properties, I would say maybe max 3, which one can be your residence and the other 2 will be shared between you and your partner to avoid any land tax. Also townhouses or units with smaller land will be preference for the future.

[@sonyavanderwalt5615]

I’m loving your videos. Very informative. I’m considering building a 2 bedroom granny flat on my block in Rochedale south. I want to know if this can be seen as an investment property and if banks would lend to build. Then can expenses be claimed for tax deductions?

[@lukewiles1]

Best to chat with an accountant on this one but generally if the property is income producing, you can claim tax deductions to offset income and banks will lend on these assets (depending on the bank / type. of loan)

[@sandipalmer2464]

Very informative Luke, thank you. Assuming this wont apply to agricultural land in NSW?

[@lukewiles1]

There's a bunch of exemptions on the list for interstate land. Farm land would fall under primary production Exempt land includes : Home (principal place of residence) Primary production Supported accommodation Moveable dwelling (caravan) park Retirement village Transitional home Charitable institution Aged care

[@sandipalmer2464]

@@lukewiles1 excellent!

[@irena.el.o4198]

Do these changes apply to your primary property you live in also.

[@lukewiles1]

Primary residence is exempt from land tax !

[@irena.el.o4198]

@@lukewiles1 thanku

[@rameshtronics]

What's your thoughts about buying investment property in crestmead ??

[@lukewiles1]

Super popular area at the moment to invest for both cashflow and growth 🙌

[@rameshtronics]

@@lukewiles1 Much appreciate your response.

[@lafaele1980]

Are these “land taxes” tax deductible?

[@lukewiles1]

Land tax is tax deductible.

[@lafaele1980]

@@lukewiles1 I know it’s sucks but at least we have some sort of silver lining 😊

[@lukewiles1]

@@lafaele1980 haha agreed!

[@lionheart1727]

It's insane, it's a cash grab by QLD government, because tax deductions are at a federal level not state. If this is the way then stamp duty should be removed for state and be uniform across Australia at a federal level. Qld is robbing federal government via a land tax. At least federal government refunds gst yo states, this is a brain fart by someone in QLD government

[@lafaele1980]

@@lionheart1727 agreed. It’s terrible

[@itrebor]

Does land tax apply to apartment units?

[@lukewiles1]

Yes, apartments will have a land tax component. Land value is assessed in total for the property then apportioned to the apartments

[@ken_le]

Beware of capital discount when you sell property under pty ltd, trust, individual. They make property investment complicated.

[@criostoirashtin11]

Anyone using trusts in WA?

[@Acid31337]

These taxes surving its purpose great - punish rent-seeking behaviour. Punish those who decided to build wealth providing nothing to society, until they give up and sell property to those who really need it.

[@sarcasmo57]

Land tax is always interesting.

[@lukewiles1]

Rules are quite varied across the states!

[@aeshaosman2567]

Not interesting. Criminal.

[@lukewiles1]

@@aeshaosman2567 criminal how?

[@aeshaosman2567]

@@lukewiles1 sad it has to be explained how. Land tax is just another avenue to extort the people of Australia. There is no fiscal justification other than the government stealing more money. The amount of taxes Australians pay is completely criminal and unjustifiable.

[@lukewiles1]

@@aeshaosman2567 I don't disagree that these land tax changes are unreasonable and they should have just increased the rates on QLD land rather than adjust the rules to look across Australian land, if they wanted to raise State Revenues. Either way, I'll still be paying my taxes because it's the system we're in

[@mccabeianenator]

Would it not be best-business-practice to notify your Public-servants/Trustees with writing, that your property is `Allodial? (Allodial title constitutes ownership of real property (land, buildings, and fixtures) that is independent of any superior landlord.Allodial title is related to the concept of land held "in allodium", or land ownership by occupancy and defense of the land. Most property ownership in common law jurisdictions is fee simple. Would it not be best-business-practice to simply ACCEPT the Land Tax Bill, WITH THE CONDITION that THEY pay YOU ten times the amount? This way, you are progressing the process into the NEGOTIATION stage....and how long do negotiations take?......how long is a piece of string? Please remember that THEY are NOT volunteers....so why should YOU be? Please think(and act) like the BUSINESS-man......NOT the victim.

[@dannyboy4546]

Simply do not disclose interstate property to any state entity

[@lukewiles1]

That's not for me... they'll be chasing and imposing penalties for non-compliance

[@sean7221]

We need more non-compliance in general

[@okanacar3771]

I guess this one will go up to high court pretty quickly.

[@lukewiles1]

it's a pretty big hike in the effective land tax rates for those who own property outside of QLD..

[@densem7447]

Imagine if all states and territories have the same land tax laws as Qld

[@lukewiles1]

you'll see a lot more trust structures with corporate trustee's that's for sure

[@charleysky]

This video did not age well @luke 😂 The video itself was great but.

[@lukewiles1]

Haha true. Happy that the QLD Gov parked these plans to be honest!

[@1darryloflife]

Stop assuming that the State Revenue Office have the authority to collect a tax. SRO is a privatised entity that the Queensland government could not endorse due to the fact that the Queensland government has no enumerated head of power to rely upon for this tax to be implemented on freehold land granted through the Crown. If you fall for the offer to treat then the SRO will be able to enforce via contract law not law governing freehold land under the Crown grant. The law in Queensland being the Property Law Act clearly states that the Crown must be the beneficiary of all monies re the original grant. You are being deceived via a fraud from an imposter disguised as government. The imposter is of course the likes of Blackrock and Vanguard being overseas based companies traced back to the Bank of International Settlements based in Burne Switzerland.

[@sallyjohnson5985]

What’s your authority for claiming this?The OSR is now called QRO and merged with SPER and collect all state taxes so I don’t think you can decline to pay land taxes anymore than you can refuse to pay fines without heavy consequences!

[@1darryloflife]

@@sallyjohnson5985 The parliament has prescribed through this awkward thing called the law, look at it for yourself. Ask the question where is the enumerated head of power for the Parliament of Queensland as is required by law. Where did the Parliament of Queensland get the authority to dissolve the upper house when a referendum failed when the question was asked of the people? Where does any Department of government get the authority to impose a fine when the law only allows a court to impose a fine ? These are questions you should be asking instead of blindly paying a fine . I have not paid any fines for over twenty years because I call them out on the bluff they are running . All the stuff I say is because I asked questions did my research and tested it with the criminal organisation calling themselves government. Queensland is the most broken State in all of Australia all because they dissolved the check and balance called the upper house of the Parliament without lawful permission. Queenslanders need to wake up and call out the crims.

[@1darryloflife]

@@sallyjohnson5985 As stated in the last reply the authority for stating the facts are supplied by law as prescribed via the Parliament. I am a student of law and of the Constitution of the Commonwealth. When one studies the law in Australia one quickly wakes up to the deception that has been on the table for many decades, look and you shall see , seek and you shall find.

[@aeshaosman2567]

@@1darryloflife is this even for other states like Victoria and if you have a trust?

[@1darryloflife]

@@aeshaosman2567 Applies to all States and Territories . A trust is just a barrier between the "person" and the State Revunue Office operating the offer.

[@markspin4596]

Should be called a tax grab more like it...

[@jameswillis8969]

Queensland has no power to assess land outside of its jurisdiction

[@lukewiles1]

looks like they're going to try and data match with other states property records...

[@jameswillis8969]

@@lukewiles1 Tyranny

[@youtoob8166]

Don't you people feel bad about being so greedy ?

[@scottfrance1400]

Of course they are thieves

[@YML1357]

Tax the rich

[@chapat8762]

Smells like wef, you’ll own nothing after we tax you into the ground

[@lukewiles1]

maybe other states will do the same..

[@sumeriansumer1622]

@@lukewiles1 @ That's why this definitely must be challenged in court as soon as possible

[@kelvinjames6344]

2030 u will own nothing and be happy

[@lukewiles1]

Is this a prediction for me? I'm happy now ☺️

[@smithchip2028]

@@lukewiles1 haha yea. You will be happy now and in 2030 aswell because you have invested in property