Skip to content

Queensland land tax reform: the 2025 climbdown

In 2022, the Queensland government announced a land tax reform that would have aggregated interstate investor holdings when calculating Queensland land tax. After significant political backlash from investors and the NSW government, Queensland deferred and then reversed the reform. The 2025 policy landscape is clearer, and it is worth knowing what nearly happened and what is actually in place.

What was proposed in 2022

Under the original reform:

  • Land tax calculation would consider the total Australia-wide land value of an owner
  • The Queensland land tax rate would then be applied to the Queensland-only portion
  • Effect: an investor with significant holdings in NSW or Victoria would pay Queensland land tax at a higher rate even though their Queensland property had not changed

The rationale: discourage interstate investor concentration in Queensland driving up local prices.

The backlash: investors argued they’d be taxed effectively on property in other states that Queensland had no authority over. NSW government pushed back. Real estate lobby campaigned heavily.

What is now in place (post-reversal)

  • Queensland land tax applies to Queensland land holdings only
  • Threshold: $600,000 (higher than VIC, lower than NSW)
  • Rates: 1.0% to 2.75% on individual portfolios; higher for trusts and companies
  • Foreign ownership surcharge: 2% additional
  • No vacant land tax in Queensland (unlike VIC)

Why Queensland land tax is still manageable

Relative to VIC, QLD’s land tax burden on a typical investor portfolio is modest:

Example: Investor holds 2 Brisbane houses with land values $520k and $580k. Combined QLD land value: $1.1m.

  • QLD land tax: $1.1m - $600k threshold = $500k taxable
  • Approximate tax: $7,500-$9,500/year

Same portfolio in VIC would attract $12,000-$14,000/year. In NSW, it would be below threshold (zero land tax).

The trust rate problem

Trusts in Queensland attract higher land tax rates starting at $350,000 of taxable land value, with rates reaching 2.75%. This differs from NSW (which treats most trusts as special) and creates a specific penalty for trust-held Queensland property.

Investors planning multiple properties in Queensland through a discretionary trust should model the land tax closely. Direct personal ownership often works better.

Interstate investor implications

With the 2022 proposal reversed, Queensland remains competitive for interstate investors:

  • Higher threshold ($600k) than VIC
  • No absentee owner surcharge (unlike VIC’s 4%)
  • Lower foreign surcharge (2% vs VIC’s 4%)
  • No vacant residential land tax

For Sydney-based investors seeking interstate exposure, Queensland is structurally more attractive than Victoria on after-tax basis.

The political cycle risk

The 2022 proposal shows that Queensland land tax policy can change with political cycles. A future state government with a different fiscal posture could revisit interstate aggregation. Investors should not assume current rates are permanent, but for 2026-2028 planning, the current framework is the operating assumption.

2026 practical investor takeaway

If you’re allocating capital across states:

  • 1-2 properties: any state works; Queensland is competitive
  • 3-5 properties: Queensland works well alongside NSW (diversifying thresholds)
  • 6+ properties: structure matters more than state selection; consult a property-tax accountant
  • Short-stay strategy: Queensland is preferable to VIC given no VRLT equivalent
  • Regional strategy: Queensland regional has strong structural tailwinds (post-Olympics infrastructure, interstate migration)