The Queensland Parliament passed the Land and Other Legislation Amendment (LOLA) Act on 20 May, implementing a range of reforms for rural leasehold land. These are the most significant land reforms Queensland has seen since the commencement of the current Land Act and it has been widely applauded by industry stakeholders. These reforms are aimed at slashing red tape, reducing business costs, modernising tenure administration, providing greater security of tenure for lease holders and in turn stimulating investment in Queensland agriculture.

Key changes include:

  • „ introducing automatic renewal of most pastoral leases„
  • „ unprecedented cost reduction to convert rural leasehold to freehold land
  • „„ providing an option for the State to retain interest in commercial timber in land being freeholded rather than purchased by the landowner
  • „„ adjustment to land rental rates
  • „„ removal of restrictions on companies and trustees holding perpetual and freeholding leases and on individuals being restricted in the number that can be held, and
  • „„ removal of restriction on individuals holding land in excess of two living areas.


Automatic term lease extensions will provide much needed certainty for lessees and for future investors into Queensland agriculture. We think it will be a ‘game changer’ for overseas investors.

The reforms introduce a simplified renewal process through a system of rolling lease term extensions for most rural leases (including leases over state forests and timber reserves) granted for agriculture, grazing or pastoral purposes. When an application to renew a lease is made, it will automatically be extended or ‘rolled over’ for the original term on the lease. For example, a lease with a grant term of 30 years will be rolled over for an additional 30 years.

In the last 20 years of a term, lessees can apply for a 30 year term, which will be added to the existing term, allowing the lessee to potentially hold a 50 year lease at any one time. The Minister must grant the extension for the term of the lease (subject to the leaseholder satisfying its requirements e.g. annual rental payments) and there will be no limit to the number of times a lease can be rolled over.

Land Management Agreements (LMAs) will no longer be a requirement for rural leases to enter into at the time of a ‘rollover’. This is a significant amendment which will drastically reduce assessment times. Additionally, lessees with LMAs attached to their land, may apply to the Minister for the LMA’s to be extinguished. They may, however, still apply where the lessee is not complying with the duty of care requirement and or the land is at risk of degradation.


The reforms aim at simplifying the process of converting leasehold land to freehold, by removing the out-dated requirement of firstly converting the tenure to a perpetual lease. This will reduce costs and unnecessary administrative burdens on both the lessees and the Government.

The cost of conversion for rural term leases and rural perpetual leases has been significantly reduced from 100 per cent of the unimproved value to approximately 9.85 per cent for term leases and 19.65 per cent for perpetual leases.

The conversion rate for term leases (including leases over state forests and timber reserves) in the coming financial year will be approximately 13.1 times their rent at 0.75 per cent of the current unimproved land value, equating to 9.825 per cent of the unimproved value of the land.

In contrast, the cost of conversion for perpetual leases in the coming financial year will be approximately 13.1 times their rent at 1.5 per cent of the current unimproved land value, equating to 19.65 per cent of the unimproved value of the land. The higher conversion rate is in recognition that native title is extinguished and that they generally have more favourable survey standards.


Another significant change is that lessees do not have to pay out Stateowned commercial timber in the process of freeholding, but rather there is the option for the State to retain an interest in the commercial timber on the land.


The rental rates for term leases have been adjusted to 0.75 per cent of the current unimproved land value.

Perpetual leases remain at 1.5 per cent of the current unimproved land value, however the rental cap on annual increases will be reduced from 20 per cent per year to 10 per cent.


Restrictions on companies and trustees holding perpetual leases and freeholding leases have been removed. Also on conversion of a perpetual lease and freeholding lease to freehold land, there will be no restriction on a company acquiring the land.

Previous restrictions on individuals amalgamating two or more adjoining leases of different tenure types have been removed. Two leases will now be considered the same if the tenure types are both for pastoral purposes even though one lease is a term lease and the other a perpetual lease.

The removal of restrictions on companies and trustees owning term and perpetual leases and individuals holding any number of different tenure types will provide new opportunities with increased flexibility for land acquisitions and strategic structuring.


The Government intends to implement these changes from 1 July this year. Lessees will all receive letters in the coming weeks from the Government which will set out the future rental costs, conversion of tenure and renewal options.


These changes offer significant benefits and opportunity for leaseholders to take advantage and apply for leases to be renewed. We recommend that lease holders apply to ‘rollover’ term leases if the term has been in existence for more than 10 years. Governments change and legislation can be amended, and for that reason we suggest consideration be given to the extension of the term of lease. For the same reason freeholding should be considered.

Leases due to expire on or before 31 December 2015 have been given an extension of two years to allow the renewal to be considered under the amended legislation. Given that LMAs will not be a requirement under the new rolling system, we recommend that you apply under the rolling term lease process.