Queensland Payroll & Land Tax Changes: Concessions and Discount Extensions

On 23 June 2023, the Revenue Legislation Amendment Act 2023 No. 18 was given Assent and implements measures announced in the Queensland 2023-24 State Budget. These include changes to land tax and payroll tax designed to incentivise rental development, and regional employment and training.

Let's cut through the fog of legalities and understand what this means for landowners and employers.

What Is Land Tax?

In Queensland, land tax is an annual tax calculated by the state on the freehold land that you own at midnight on 30 June each year. Conditions such as the type of owner you are, the total taxable value of your land, and if any exemptions apply to it factor in to determine your tax rate.

Freehold land liable for land tax includes:

• Vacant land
• Land that is built on (e.g. your home, an investment property, etc)
• Lots in building unit plans
• Lots in group title plans
• Lots in a timeshare scheme
• Lots owned by a home unit company

Like with most taxes, the collections contribute to the services and infrastructure provided by the state.

What Is Payroll Tax?

Payroll tax is a self-assessed tax on the wages that employers pay to their Queensland employees when the annual Australian taxable wages are above a certain threshold.

Payroll tax laws differ between states and is dependent upon the employee’s location, not the employers.

In Queensland, the current payroll tax rate is:

• 4.75% for employers or groups of employers who pay $6.5 million or less in Australian taxable wages
• 4.95% for employers or groups of employers who pay more than $6.5 million in Australian taxable wages

Changes to Land Tax – Concessions for Eligible Build to Rent Developments

Part 3 of the Act provides new legislative concessions for land tax and additional foreign acquirer duty surcharge relating to eligible Build to Rent (BTR) developments that include affordable housing at a discounted rent rate. They include:

• a 50% reduction in the taxable value of land for land tax for land used for an eligible build to rent development, for up to 20 years;
• a 100% reduction in the taxable value of land for land tax foreign surcharge for land used for an eligible build to rent development, for up to 20 years; and
• a 100% discount on any additional foreign acquirer duty for land for an eligible build to rent development.

Changes to Payroll Tax – Extensions to Discounts and Rebates

Part 5 of the Act provides information regarding extensions to both the payroll tax discount for regional employers, and the wages rebate for apprentices and trainees. The extensions include:

• The 1% discount on payroll tax for regional employers for a further 7 years (until 30 June 2030)
• The 50% rebate for wages paid or payable to apprentices and trainees to include wages paid or payable during the financial year ending on 30 June 2024

Overall, the Act provides some positive updates for eligible Queensland landowners and employers.

Unsure how to navigate land and payroll tax or if the legislation changes apply to you? Get in touch with our experienced accountants today to see how we can help.