From 1 July 2011,  Queensland moved from a land rich duty regime to a landholder regime. The Community Ambulance Cover Levy Repeal and Revenue and Other Legislation Amendment Act 2011 (“Act”), which was passed by the Queensland Legislative Assembly on 17 June 2011, commenced operation today. The Act substantially amended the former land rich provisions in Chapter 3 of the Duties Act 2001 (Qld).

Background

Over recent years, nearly all Australian states and territories have moved from a land rich to a landholder regime.

Both South Australia and Queensland today moved to a landholder regime.1   While still in the consultation phase, Victoria has indicated its intention also to move to a landholder regime on 1 July 2012.  Tasmania is currently the only land rich jurisdiction which is yet to propose landholder amendments.

Summary

The new landholder regime removes the 60% “land rich” threshold test, but increases the existing $1 million Queensland landholding threshold to $2 million.

The new landholder regime therefore significantly expands the duty base.  It also captures a wider range of entities, including public corporations and listed unit trusts, in addition to private corporations.  (There has been no change to the trust acquisition duty provisions which apply to private unit trusts).

In greater detail

Landholder duty is imposed where a “relevant acquisition” is made.  This may occur where (for example) a “significant interest” of 50% or more in a private landholder, or 90% or more in a public landholder, is acquired.  (An “interest” in a landholder is an entitlement, as a shareholder or unitholder, to a distribution of the landholder’s property upon the landholder’s winding up.)

A “significant interest” may be acquired by way of a wholly new acquisition, by aggregating a new acquisition with an existing interest, or by increasing an existing “significant interest” in the relevant landholder.

Certain interests are excluded.  Additionally, special transitional rules apply in relation to interests that were acquired in certain entities before 1 July 2011, and the aggregation of interests spanning before and after the commencement date.  However, acquisitions made in private landholders before 1 July 2011 are generally be taken into account in determining whether a significant acquisition is made.

In addition, different methods for calculating the duty chargeable apply, depending on whether the acquisition relates to a private or public landholder. 

Implications

The new landholder regime is closely aligned with the recently established landholder regimes in Western Australia and New South Wales. 

Those regimes also include a $2 million landholding threshold and have similar concepts relating to “relevant acquisitions” for public and private entities respectively.

In those regimes but not in Queensland, the value of goods is included in the total unencumbered value upon which duty is levied.  In New South Wales and Western Australia, private unit trust schemes are also caught.  This latter feature has not been adopted in the new Queensland landholder regime as it has its own separate duty regime.

Notably, public takeovers are caught by Queensland’s new landholder provisions (though a concessional rate of 10% of the duty that would otherwise be chargeable on the acquisition applies, as illustrated in the table below).

Comparison of the current land rich regime and the new landholder regime in Queensland

The table below compares the key elements of the current land rich and new landholder regimes in Queensland:

Click here to see table