On 22 June 2009, the Queensland Parliament passed the Revenue and Other Legislation Act 2009 (Act). The Act, amongst other things, amends the Land Tax Act 1915 (Qld) (LTA) effective on and from 30 June 2009.

Previously, section 44A of the LTA rendered unenforceable any provision in a lease ‘entered into’ after 1 January 1992 requiring a tenant to either pay land tax or reimburse the landlord for land tax. This prohibition is echoed in the provisions of the Residential Tenancies Act 1994 (Qld) and the Retail Shop Leases Act 1994 (Qld).

The changes now allow landlords of commercial premises (but not residential or retail premises) to recover land tax from their tenants where new leases are ‘entered into’ on or after 30 June 2009.

For pre-existing leases (i.e. leases ‘entered into’ prior to 30 June 2009 or renewals of leases under options granted before that date) and leases under the Retail Shop Leases Act 1994 (Qld) and the Residential Tenancies Act 1994 (Qld), the prohibition will continue to apply.

Whether a lease is ‘entered into’ prior to 30 June 2009 will be a question of fact in each case and will include an assessment of all the circumstances including whether a binding agreement to lease has been entered into in writing (such as binding letters of offer to lease) or by conduct (such as the tenant taking possession) or both.

For leases of commercial premises negotiated on or after 30 June 2009 landlords can now seek to pass the land tax liability on to tenants as part of ‘outgoings’.

Tenants on the other hand, will no doubt continue to press for ‘outgoings’ in new leases to specifically exclude land tax.

For further assistance or enquiries please contact:

Property Development Group

Ian Hazzard on 07 3233 8976
Andrew Muir on 07 3233 8836.