Skip to main content
May 30, 2023

Understanding Property Taxes In Queensland

It’s often said that the only two things that are unavoidable are death and taxes.

However, this old saying is only partially true when it comes to Queensland property.

While many of us have to pay duties and levies when we buy, sell or even own property, some of us also receive exemptions or discounts, giving many property owners a free pass.

With that in mind, here is our guide to property taxes in Queensland and Toowoomba, including when you’ll have to pay, how much you’ll have to pay, and when you don’t have to pay at all.

Stamp duty

Stamp duty, also known as transfer duty, is a form of tax the Queensland government imposes on property transactions. It applies when you buy a property, land, or a business, and it generally falls due to the time ownership changes hands – typically settlement.

The amount of stamp duty you need to pay is typically calculated on the purchase price of the property or its market value, whichever is higher.

Do you need to pay stamp duty?

Stamp duty applies to almost all property buyers in Queensland, including investors, owner-occupiers, and businesses. However, different rates often apply depending on what type of buyer you are.

Property investors typically pay the ‘general rate’ of stamp duty, which is higher than the rate owner-occupiers pay. First homeowners also often receive generous discounts. In fact, first-home buyers who purchase a home valued at less than $500,000 – or land valued at less than $250,000 – won’t need to pay stamp duty at all.

You can read more about the stamp duty discounts and exemptions for first-home buyers here.

Capital Gains Tax (CGT)

CGT is levied by the Commonwealth government and is a tax on the net profit, or capital gain, that you receive when you sell or dispose of an asset such as property.

The gain is essentially the difference between what you paid for the property and what you sold it for. If the property sells for less than what you paid for it, this results in a capital loss.

CGT is critical because it can significantly impact how much profit you make from selling a property.

Do you need to pay CGT?

Owner-occupiers don’t usually pay CGT, so if you’re selling the family home, it generally won’t apply to you. The exception is where you’ve used part of your home to generate an income, in which case you may have to pay CGT on that portion of the home’s value.

If, however, you’re an investor and you sell your property for a profit, it’s likely to apply unless you bought the property before 20 September 1985.

CGT isn’t a separate tax that’s levied on you but part of your annual income tax return, so you’ll pay any tax at your marginal rate. For that reason, it’s often worth getting tax advice before selling an investment property.

If you’ve held a property for over 12 months, you may be eligible for a 50% CGT discount. Additionally, moving into a rental property or using your main residence as a place of business can qualify you for partial exemptions.

You can read more about CGT on the Australian Taxation Office (ATO) website.

Land Tax

Land tax is another State-based levy that applies to some Queensland property owners. It’s calculated based on the total taxable value of freehold land owned in the state as of midnight on June 30 each year.

The Queensland government figures out your land tax based on the land’s ‘unimproved capital value.’ This means what it’s worth without any buildings or other improvements. In other words, it’s not the value of the entire property that’s taken into account – only the land itself.

Do you need to pay land tax?

If you’re an investor, you may have to pay if you own land other than your main home (remember that’s land, not property) valued at more than $600,000. While you don’t generally pay land tax on your main home, you might owe it if you have extra dwellings on the same land or run a business from it.

To calculate what you owe, the government takes into account all your land holdings in Queensland other than your principal residence and adds them together. For instance, if you own three properties valued at $500,000, you’ll pay land tax based on $1.5 million, even though no single property meets the threshold.

Exactly how much you’ll need to pay depends on a range of factors, including who owns the land (for example, whether it’s held in the name of a person, company or trustee and whether they live in Australia or overseas).

Council Rates

Council rates are what you need to pay so that your local council can run services and infrastructure. That includes waste management, maintaining local roads and providing local government services.

Everyone needs to pay council rates regardless of whether they’re an owner/occupier or investor.

Here in Queensland, we also need to pay an Emergency Management Levy along with our council rates. This is designed to provide funding to fire and emergency services. You can read more about it here.

In short…

Owning a property comes with a number of responsibilities, including the need to pay various taxes. You should make sure you’re across these to avoid the risk of potential fines.

And, if in doubt, always speak to your tax adviser.

Want more?

If you’re interested in investing in buying or selling property in Toowoomba and its surrounds, get in touch.

Article by Katie Knight

Some may say real estate is in Katie’s blood having joined real estate following her father, Ian Knight, into the industry where he had pioneered the path of real estate in Toowoomba in the late ‘80s and opened the ninth regional RE/MAX office… View profile

What’s my home worth?

Get a detailed estimate of your property’s value in today’s market

  • Hidden

  • Hidden