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QLD Budget | Foreign owner duty & land tax surcharge

QLD Budget | Foreign owner duty & land tax surcharge

17/06/2024

On 11 June 2024, the Queensland Government released its 2024-25 budget with plans to increase the additional foreign acquirer duty and foreign owner land tax surcharge.

The Queensland Government will increase the rate of the additional foreign acquirer duty (AFAD) from 7% to 8% from 1 July 2024,

AFAD is levied on foreign buyers of residential property in Queensland, with ex gratia relief offered to Australian-based foreign entities whose commercial activities involve significant developments by adding to the supply of housing stock in Queensland (subject to eligibility requirements).

From July 2024, the Queensland Government will also increase the surcharge rate of land tax applied in addition to land tax rates for foreign companies, trustees of foreign trusts and absentees, from 2 %to 3%.

Ex gratia relief from the land tax surcharge will continue to be offered for Australian-based foreign entities whose commercial activities make a significant contribution to the Queensland economy and community (subject to eligibility requirements).

For further information we have released a summary about the different state foreign owner surcharge land taxes and duties.

Concluding remarks

While the increased rate of the AFAD will bring Queensland in line with Victoria and New South Wales’ foreign owner transfer duty surcharge rates, Queensland’s increased foreign owner land tax surcharge will still be more generous than other states.

How can SW help?

SW has considerable experience in assisting foreign investors to determine the most favourable state or territory to invest in property developments. Given foreign owner transfer duty surcharge rates are becoming more uniform across Australia, it may become less clear what are the specific advantages in investing in specific states and territories. However, other drivers that are still relevant to structuring foreign investments in specific states and territories include build-to-rent concessions, the availability of exemptions and ex gratia relief from surcharges, and the types of property assets that will be invested in.

If you would like any further information, please contact a member of the SW tax team.

Contributors

Eric Lay

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