Queensland’s land tax regime is expanding, capturing thousands of new properties. As land values rise, more property owners are facing higher tax bills. The state government expects significant revenue increases as the net widens.
A Growing Land Tax Liability
The Queensland government’s land tax regime has become increasingly expansive in recent years. The number of properties falling under the regime has grown substantially, reaching 204,586 in 2024-25, up from 181,466 the year before. At the same time, the number of individuals liable for the tax surged by 30%, from 46,794 to 60,828. The revenue boost from this expansion is significant, with the state government projecting $2.47 billion in land tax collections for 2024-25, a noticeable increase from $2.03 billion the previous year.
However, this growing tax base has raised questions about fairness, particularly in the face of rising property prices. Land tax is applied to investment properties, but homeowners’ principal residences are exempt. The key threshold for paying land tax, set at $600,000 for individuals, has remained unchanged since 2007. This static threshold means that, as property prices climb, more people are falling into the tax net. For many, this could mean extra financial strain as their property values increase, but their land tax bill also grows.
Calls for Change: Should the Threshold Be Adjusted?
The Real Estate Institute of Queensland (REIQ) has repeatedly called for the land tax threshold to be indexed to the Consumer Price Index (CPI), to reflect rising property values. REIQ’s Chief Executive Antonia Mercorella argues that it would be “logical and fair” to update the threshold to account for inflation and property price increases over the last two decades. With property prices in Queensland continuing to soar, she believes more people will be caught in the land tax net unless the threshold is adjusted.
Despite these calls, the Queensland government has made it clear that it has no plans to raise the threshold or index it to CPI. Treasury argues that the current threshold is already among the “most generous” in the country, particularly compared to other states like Victoria, which has a far lower threshold. They also point out that most homeowners remain unaffected by the tax due to the principal place of residence exemption.
Land Tax as a Source of Revenue
For the Queensland government, land tax is a vital revenue source. With land values rising, the state’s income from this tax is expected to increase further, projected to hit $3.26 billion by 2026-27. Economists like University of Queensland professor John Quiggin have praised land tax as one of the most efficient forms of taxation. He argues that, compared to other taxes such as gambling and stamp duty, land tax offers a stable and fair method of raising funds. Quiggin also suggests that the government may need to consider lowering the threshold to generate more revenue, especially in light of rising costs, reports ABC News.
While land tax has its benefits, it’s important to consider its impact on investors and renters. Some property owners may pass the increased costs onto renters, potentially making housing even less affordable in a market already under pressure.
Who’s Paying the Price?
Out of the 60,828 individuals paying land tax, a small number of wealthy landowners hold the majority of taxable land. Fifty individuals are liable for tax on land valued at over $10 million, while another 272 have land holdings worth between $5 million and $9.99 million. But the majority of tax payers—about 42,000 people—are liable for land tax on properties valued between $600,000 and $999,999. This highlights that while the wealthiest landowners contribute a significant share of the revenue, the middle-class property investor is increasingly bearing the burden of rising land values.
