Is There GST on Land Tax in Queensland? What Owners Need to Know

Is there GST on land tax in Queensland?

In short, no, the Queensland Government doesn’t charge GST on land tax.

The confusion usually starts when land tax intersects with other property transactions. GST can apply to certain land sales, and landlords who pass land tax on to commercial tenants may need to charge GST on the amount they recover. In other words, the land tax bill itself is GST-free, but what happens next might not be.

Here’s where GST does come into play around land in Queensland.

Land tax and GST: Five things to know

• Your Queensland land tax does not include GST.
• Commercial property sales can attract GST, depending on the circumstances.
• New housing and subdivided land need separate GST consideration.
• Recoverable land tax can attract GST under a taxable commercial lease.
• Landlords can't recover land tax from tenants under Queensland retail shop leases.

Why your Qld land tax bill has no GST

Land tax applies to qualifying landholdings and the Queensland Revenue Office administers it. Under Division 81 of the GST legislation, Australian taxes like this generally fall outside GST.

That also means you can’t claim a GST credit on your land tax assessment, even if you’re registered for GST.

For a broader look at land ownership costs, read our overview of property tax in Queensland. Our guide to land tax in Queensland explains when land tax may apply to your property.

When commercial land sales attract GST

While you won’t pay GST on land tax, selling commercial land or premises generally attracts 10% GST if the sale happens in the course of an enterprise and the seller is registered, or required to be registered, for GST.

Some sales are treated differently. For example, a sale that meets the ‘going concern’ requirements (i.e. the business will continue to operate, the buyer is registered for GST, and both parties agree in writing that it's a going concern sale) may be GST-free.

The margin scheme is another option in some cases. Where it’s available and properly agreed in the contract, it changes how GST is calculated. Ask your solicitor and accountant to confirm if the margin scheme applies when you’re preparing to buy or sell as part of your business.

What about new residential land and subdivisions?

“Residential land” can mean different things in relation to GST. Sales of existing residential premises are generally input-taxed (sold without GST in the price), while new residential premises can attract GST when sold as a taxable supply.

Vacant land intended for housing isn’t automatically treated the same as an existing home either. If you’re a developer selling residential lots, you may need to account for GST.

Subdividing your own land is worth a closer look too. A private sale doesn’t automatically attract GST, but if you carry out the development as an enterprise, you may need to register for and pay GST. Even a single project can count.

The ATO’s guidance on subdividing land is a good place to start. Get advice before you price your lots or assume that selling as an individual means GST won’t apply.

Why a commercial tenant’s outgoings may include GST

Under a taxable commercial lease, payments that reimburse the landlord’s outgoings generally form part of the payment for the premises. That can include land tax that the landlord is lawfully allowed to recover, even though the original government assessment has no GST.

For example, if a lease allows the landlord to recover $1,000 in land tax plus GST, the tenant could be invoiced $1,100. In this case, the GST applies to the lease, not the land tax.

If you own and lease a commercial property, it’s important to check whether you can recover land tax. Under Queensland retail shop leases, you can’t pass on land tax as an outgoing. For other commercial leases, check the lease terms and the relevant law before charging anything.