Tax Tip 390: Land Tax in QLD for Joint Owners

In QLD each individual natural person that is not an ‘absentee’ current gets a land tax threshold of $600,000, Schedule 1 of the Land Tax Act. Each Trust or Company gets a threshold of just $350,000.


For jointly owned property each owner is taken to own their interest in the land, or in the words of the legislation, under s22:

(1) A co-owner of land—

(a) is taken to own part of the land in proportion to the co-owner's interest in the land; and

(b) subject to section 19, must be severally assessed.


This means that joint owners are only assessed on their share of the land value.


Example

Homer and Marge own one investment property in QLD with land worth $700,000. This is over the $600,000 threshold but if they are 50/50 owners as tenants in common each will only be using $350,000 of their threshold and no land tax would be payable.



They then go and buy a second property in QLD which is rented out and its land value is $500,000. They are also 50/50 tenant in common owners of this property. This means they are each assessed on $250,000 of the land and in total between the 2 separate properties they will still not pay land tax – this year.


Note that next year they might be over the threshold though if the land value increases.