Skip to content

  • Home
  • COVID-19 Guide
  • Podcast library
  • Client results
  • Expertise
  • News & Insights
  • People
  • Our DNA
  • Inclusion and Diversity
  • Join us
  • Contact Us
Home / NEWS & INSIGHTS / Insight / Land tax: the things you need to consider when investing in Queensland agricultural land
Insight 11 May 2016

Land tax: the things you need to consider when investing in Queensland agricultural land

WHO SHOULD READ THIS
  • Those who are considering the acquisition of Queensland agricultural land or changing ownership structures of their properties.
THINGS YOU NEED TO KNOW
  • In Queensland there are some additional requirements to ensure agricultural land is exempt from land tax. These include the residential status of the individual owners and trust beneficiaries, whether the company is privately owned and the home jurisdiction of its owners.
WHAT YOU NEED TO DO
  • Prior to acquiring or making changes to the ownership of Queensland agricultural land it is recommended that you understand your position and seek legal advice to ensure your exposure to land tax is properly managed.

With global food demand booming, investing in Queensland agricultural land is becoming an increasingly attractive option for investors including foreigners. However, investors should be aware of potential land tax ramifications.

In this alert we set out some of the most important land tax considerations that investors in Queensland agricultural land need to be aware of.

Background

As an annual tax, land tax is calculated on a landholder’s total landholdings at midnight 30 June each year. For companies, trustees and absentees there is a tax free threshold of $350,000, with the maximum rate of land tax for landholdings with an unimproved value greater than $5 million, being $75,000 plus 2% for each dollar exceeding $5,000,000.

The Queensland primary production exemption

The majority of land used for primary production in each Australian jurisdiction is generally exempt from land tax on the basis that the land is used solely or mainly for primary production. However in Queensland, there is an additional requirement for land to be exempt. To comply with this requirement the registered owner of the land must be:

  • a resident individual,
  • a relevant proprietary company, or
  • a trustee of a trust where all the beneficiaries satisfy the requirement.

Private companies will generally qualify for the exemption. However, a private company will not qualify for the exemption if shares in the company are held by public or foreign companies, or trusts of which foreign individuals are beneficiaries. Land held directly by public companies or foreign companies will also not qualify for the exemption.

Risks for corporate agribusiness

If a foreign company, or an Australian entity that has ownership interests held by foreign interests, acquires land for farming purposes there is a real risk that land tax will be payable on an annual basis.

Risks for land held by family trusts

The ownership requirements are not limited to foreign investors and could pose potential complexities to Australian farmers. For example, if a family farm is held in trust for family members, one of which moves overseas, then for land tax purposes this family member would be regarded as an ‘absentee’ for land tax purposes and the trustee would no longer be eligible for an exemption from land tax.

Similarly, land held by private corporations that convert to public companies, with a view to listing at a later date, would lose the benefit of any exemption once the entity becomes a public company. This is irrespective of whether the public company is listed or unlisted. Furthermore, if private corporation landholders sell shares to foreign companies then the exemption would no longer technically apply.

Understand your position

Prior to acquiring or making changes to the ownership of Queensland agricultural land it is recommended to seek legal advice to ensure your exposure to land tax is properly managed.

There are certain ways that foreigners (including Australian born expatriates) may be able to hold interests in Queensland primary production land and not be exposed to ongoing land tax liabilities.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

About the authors

Rodney Bell, Specialist Agribusiness Lawyer 

In other news

Branding on trend: Certification of Australian Fashion

10 May 2022Insight

Verification of identity: a refresher

10 May 2022Insight

Categorising land for rating purposes used for both permanent residential and temporary tourist accommodation

4 May 2022Insight

Court of Appeal decision brings welcome relief to local councils

4 May 2022Insight

VIEW ALL NEWS & INSIGHTS

BRISBANE

Level 11, 66 Eagle Street
Brisbane QLD 4000
GPO Box 1855
Brisbane QLD 4001
Tel +61 7 3233 8888
Fax +61 7 3229 9949

 

GET IN TOUCH

    Contact form

    We handle your personal information in accordance with our privacy policy.

    Please do not send us any confidential information. By submitting this form, you agree that our review of the information you submit will not create a lawyer-client relationship between you and our firm (or any lawyer in our firm) and it will not prevent us from representing a party in any matter where the information you submit is relevant, even if that information could be used against you.

    sydney

    Level 32, MLC Centre
    19 Martin Place
    Sydney NSW 2000
    GPO Box 462
    Sydney NSW 2001

    Tel +61 2 8241 5600
    Fax +61 2 8241 5699

     

    GET IN TOUCH

      Contact form


      We handle your personal information in accordance with our privacy policy.

      Please do not send us any confidential information. By submitting this form, you agree that our review of the information you submit will not create a lawyer-client relationship between you and our firm (or any lawyer in our firm) and it will not prevent us from representing a party in any matter where the information you submit is relevant, even if that information could be used against you.

      melbourne

      Level 27, 101 Collins Street
      Melbourne VIC 3000
      GPO Box 2924
      Melbourne VIC 3001

      Tel +61 3 9067 3100
      Fax +61 3 9067 3199

       

      GET IN TOUCH

        Contact form

        We handle your personal information in accordance with our privacy policy.

        Please do not send us any confidential information. By submitting this form, you agree that our review of the information you submit will not create a lawyer-client relationship between you and our firm (or any lawyer in our firm) and it will not prevent us from representing a party in any matter where the information you submit is relevant, even if that information could be used against you.

        follow us

        CLIENT LOGIN

        newcastle

        92 Young Street
        Carrington NSW 2294
        PO Box 394
        Newcastle NSW 2300

        Tel +61 2 4914 6900
        Fax +61 2 4914 6999

         

        GET IN TOUCH

          Contact form


          We handle your personal information in accordance with our privacy policy.

          Please do not send us any confidential information. By submitting this form, you agree that our review of the information you submit will not create a lawyer-client relationship between you and our firm (or any lawyer in our firm) and it will not prevent us from representing a party in any matter where the information you submit is relevant, even if that information could be used against you.

          canberra

          Level 9, 2 Phillip Law Street
          Canberra ACT 2601

          Tel +61 2 6243 3669
          Fax +61 2 8241 5699

           

          GET IN TOUCH

            Contact form


            We handle your personal information in accordance with our privacy policy.

            Please do not send us any confidential information. By submitting this form, you agree that our review of the information you submit will not create a lawyer-client relationship between you and our firm (or any lawyer in our firm) and it will not prevent us from representing a party in any matter where the information you submit is relevant, even if that information could be used against you.

            © 2017 McCullough Robertson. Site map Disclaimer Privacy Policy Statement of Business Ethics Credit Reporting Policy

            X