Land Tax Relief for those Impacted by COVID-19

What is land tax

Land tax is a state tax and is calculated on the freehold land that you own in Queensland at midnight on the 30^th of June each year. The tax rate depends on what type of owner you are (an individual, a company, or a trust), the taxable value of your land, and if any exemptions apply.

In these difficult times the Queensland Government has committed over $400 million to support landlords and tenants, both commercial and residential, impacted by the COVID-19 disaster.

The land tax relief package

Firstly, to be eligible for land tax relief, both residential and commercial landowners must commit to comply with a certain set of principles that will be introduced into Queensland law. We have listed these principles below.

Eligible landlords can apply for up to three months waiver and three months deferral of land tax if either of the following circumstances applies:

1. You are a landowner who leases all or part of a property to one or more tenants and the following apply:
   • The ability of one or more tenants to pay their normal rent is affected by the COVID-19 pandemic;
   • You will provide rent relief to the affected tenant(s) of an amount at least commensurate with the land tax relief;
   • You will comply with the leasing principles even if the relevant lease is not regulated.
2. You are a landowner and all of the following apply:
   • All or part of your property is available for lease;
   • Your ability to secure a tenant(s) has been affected by the COVID-19 pandemic;
   • You require relief to meet your financial obligations; and
   • You will comply with the leasing principles even if the relevant lease is not regulated.

Where the lease provides that landlords can recover certain expenses (or outgoings) from tenants including state taxes such as land tax then any land tax relief provided to the landowner must be passed on to eligible tenants.

Leasing Principles

If you are a residential landowner, the principles are:

1. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;
2. You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;
3. You will not end a tenancy for any reason other than on an approved ground; this does not include the tenant’s inability to pay rent or the end of a fixed term lease;
4. You will not charge break lease fees for tenants who need to end a fixed term tenancy early due to the financial, health or personal safety impacts of COVID-19; and
5. You will allow a tenant to refuse entry for non- essential reasons, including routine repairs and inspections, particularly if a member of the household has a higher risk profile if exposed to COVID-19.

If you are a commercial landowner, the principles are as follows:

6. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;
7. You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;
8. You will not increase rent, except where rent is linked to increased turnover;
9. You will not penalise a tenant who stops trading or reduces opening hours;
10. You will not charge any interest on unpaid or deferred rent; and
11. You will not make a claim on a bank guarantee or security deposit for non-payment of rent.

Where do I apply for land tax relief?

The applications are being managed by the Office of State Revenue: https://www.qld.gov.au/environment/land/tax