Land rich duty rebadged - Queensland introduces new landholder duty

Feb 2011 |

The State Government has recently announced important changes to the way duty is imposed on acquisitions of "land rich" companies in Queensland. From 1 July 2011, land rich duty will be replaced by landholder duty.  

Land rich duty currently applies where a person acquires a 50% or greater interest in a private company where:

  • the company holds Queensland land worth more than $1 million; and
  • the land is at least 60% of the value of the assets of the company.

Under the new rules:

  • the 60% ratio is removed;
  • the duty applies to public companies and listed unit trusts; and
  • the land value threshold is raised to $2 million.

From 1 July 2011, landholder duty will apply to transactions where a person or entity acquires 50% or more of an unlisted company or 90% or more of a listed company or listed unit trust with landholdings, in Queensland with a value of at least $2 million.

The 60% value ratio threshold is abolished, so that duty will apply irrespective of whether the company's landholdings make up the majority of all assets. So long as the entity owns $2 million worth of land, landholder duty will apply.

In addition, landholder duty will extend to transactions involving listed companies and listed unit trusts, which were previously exempt. However, landholder duty will only apply to acquisitions of 90% or more of shares in a listed company or unit trust.

Landholder duty is one of the "revenue protection" measures being introduced by the Queensland Government to harmonise the way duty applies to entities with significant landholdings in Queensland and boost revenue from 2011-12. The changes are expected to net an extra $30 million in duty from transactions which currently fall outside the scope of the current system.1

While the Queensland Government is yet to release details of the new regime and transition provisions, it is likely landholder duty will reflect the regimes currently in place in New South Wales, Western Australia, South Australia and the Northern Territory.

1 Queensland Government, State Budget 2010-11 Mid Year Fiscal and Economic Review (2011) p.5.