Can you pass land tax on to your tenant in Queensland?

Three things can stop you recovering land tax, and two of them ignore what your lease says.

If your tenant is retail, you cannot recover land tax. Not with a better clause. The Retail Shop Leases Act voids it outright and you cannot contract around it.

If your lease was signed between 1992 and mid 2009, you cannot recover land tax. Even if the clause is there. Even if the current term started last year under an option. Section 83A of the Land Tax Act makes it unenforceable.

If neither applies, it comes down to the clause, and most clauses are vaguer than they need to be about how the tax is calculated.

The rest of this article is how to work out which of the three you are in, and what to do about it.

Question 1. When was the lease originally entered into?

Not when the current term started. The original date.

If the answer is between 1 January 1992 and 30 June 2009, and this is not a retail lease, stop. You cannot recover land tax. Section 83A. Skip to part two below.

If the answer is on or after 30 June 2009, go to question 2.

Question 2. Is it a retail shop lease?

If yes, stop. You cannot recover land tax, whatever the lease says. Go to part one below.

If no, go to question 3.

Question 3. Does your clause actually specify how land tax is calculated?

If it just says the tenant pays land tax, you have a problem waiting for a valuation cycle like this one. Part three below.

On 11 March 2026 the Valuer-General reissued statutory land valuations across 15 local government areas and more than 560,000 properties.

On the Gold Coast, industrial land rose 53.3 per cent and commercial 19.2 per cent.

The valuations take effect from 30 June 2026. The objection window closed on 11 May.

Brisbane City was not in this round.

If a lease is a retail shop lease under the Retail Shop Leases Act 1994, land tax cannot be recovered. Full stop.

Three provisions do it together. Section 7(3)(a) removes land tax from the definition of outgoings. Section 24(1) is a closed list of what a retail shop lease may require a tenant to pay, and land tax is not on it. Section 16 stops you contracting out.

The Act carries its own example, which is unusually direct for legislation:

Wider than most landlords assume. Under section 5B, premises are a retail shop if they are either in a retail shopping centre or used wholly or predominantly for a retail business. Being in a centre is enough on its own, whatever the use.

Two ways out:

Over 1,000 square metres. Section 5A(2)(a) excludes any retail shop with a floor area above 1,000 square metres. This used to depend on the tenant being a listed corporation. That condition was removed in 2016. It is now a straight area test.

Non-retail premises in a centre, on a two-limb test. Section 5A(3) excludes premises that are not used wholly or predominantly for retail and where, at the time the lease was entered into, retail was 25 per cent or less of the lettable area on that level.

The Act's own examples: an accounting practice on level 4 where 75 per cent of the level is offices is out. A medical centre in a standalone building in the car park where 80 per cent of that building is medical services is out.

The 25 per cent is measured when the lease is signed. A centre that changes later does not change the answer.

This is the one that catches people, because the lease looks completely ordinary.

Section 83A of the Land Tax Act 2010 is headed "Provision to pay land tax etc. on particular leases unenforceable". It says that in a pre-existing lease, "a provision in the lease requiring a lessee to pay land tax, or reimburse the lessor for land tax, is unenforceable".

A pre-existing lease means one entered into after 1 January 1992 and before 30 June 2009. The section also catches a lease arising from a renewal under an option in such a lease, and a lease arising from an assignment or transfer of one.

So a lease signed in 2007 with two five-year options, both exercised, is running today. The clause requiring the tenant to reimburse land tax is sitting in the document. It does not work.

There is one carve-out, and it runs the other way. A lease arising from a renewal, assignment or transfer of a lease entered into on or before 1 January 1992 is excluded from the definition. Very old leases with long option chains are not caught.

Why you may never have run into this. The position changed four times. The Land Tax Act 1915 prohibited recovery under post-1992 leases. That was lifted for leases from 30 June 2009. When the 2010 Act commenced, the prohibition was not carried across, and in Vikpro Pty Ltd v Wyuna Court Pty Ltd [2016] QCA 225 the Court of Appeal held that landlords under those older leases could recover after all. Parliament reversed that on 16 June 2017 by inserting section 83A, retrospective to 30 June 2010. Anyone who learned the rule between 2009 and mid 2017 learned a version of it that is no longer correct.

One practical note on the retrospectivity. Amounts a tenant has already paid are not refundable. The section stops enforcement going forward, it does not unwind history.

The test is the original date, not the current term.

For a non-retail lease entered into on or after 30 June 2009, there is no statutory bar. It comes down to the clause, and the clause has to do more work than most do.

Land tax in Queensland is aggregated. Section 19 assesses you on the total taxable value of all taxable land you own. Owning three assets does not give you three thresholds. And the scale is progressive.

Which means the same building generates a very different land tax figure depending on who owns it and what else they own. A landlord with a large portfolio produces a much bigger number than the same building standing alone.

So the clause needs to say which basis applies:

Single holding basis. Land tax calculated as if this property were the only land the lessor owned. Predictable for the tenant, and the fairer position.

Actual assessment basis. The lessor's real aggregated assessment, apportioned. Open-ended from the tenant's side, and it grows as the lessor buys more property.

If the lease is silent, that is an argument waiting to happen. In a year where Ipswich land values rose 51 per cent, it is an expensive one.

Land tax is assessed on what you own at midnight on 30 June. It is assessed on site value, not on the building.

The tax-free threshold depends on who owns the land.

Same asset, different owner, $250,000 of taxable value treated differently before the first dollar of tax.

Full scales:

Individuals

Companies and trustees

One point in favour of trusts. Under section 20, a trustee's holdings are assessed separately from the same person's personal holdings, and separately again for each distinct trust. The exception is cloned trusts and trusts with identical beneficiaries.

Foreign owners pay a 3 per cent surcharge on taxable land of $350,000 or more, calculated as the value less $350,000, on top of ordinary land tax. The exemption rules changed for liabilities from 30 June 2026.

The 2026-27 Queensland Budget made no land tax changes.

If your tenant is retail, land tax is not the only thing you cannot recover. Section 7(3) also excludes capital expenditure including amortisation of it, depreciation and sinking fund contributions, loss of profits insurance, insurance excesses, contributions to merchants' associations and promotion funds, and interest on the lessor's borrowings.

The Act's examples of capital are worth remembering. Building, extending or a major structural improvement is capital. So is replacing major plant and equipment. Replacing the lifts or the chiller is not an outgoing.

And section 48 stops you recovering the cost of preparing, renewing or extending the lease, obtaining mortgagee consent, or complying with the Act.

There is a whole separate topic in the outgoings estimate and audited statement obligations under sections 38A to 38C, including the fact that a tenant can withhold outgoings payments until you give them. That is a future deep dive.

Queensland is reviewing the Retail Shop Leases Act 1994. Submissions close at 5pm on Friday 11 September 2026, and the discussion paper is out.

Land tax is not in it. Not once, in eight pages and nineteen questions. The terms of reference also set out what the review will not consider, and that list includes commercial rent levels, valuation methodologies and broader market and economic factors. Cost allocation between landlord and tenant is not being reopened. Nothing above is about to change.

What is in scope still matters. The paper asks nineteen questions across five areas: simplification and alignment with other legislation including the Property Law Act 2023, the requirements and scope of the Act, disclosure, minimum lease standards, and dispute resolution.

Scope is the one to watch, and it bears directly on part two of this article. The review is assessing whether the definitions of retail shop lease and retail business remain appropriate and reflective of modern retail models. Everything in part two turns on those definitions. If they move, the tenancies caught by the Act move with them, and with those tenancies go the recovery rules, the disclosure obligations and the outgoings estimate and audited statement duties.

Worth knowing where Queensland sits while the door is open. Queensland and Victoria are the only two states that ban land tax recovery from retail tenants outright. New South Wales allows it on a single holding basis, and Western Australia allows it on a single holding basis apportioned to the tenant's share. The ACT and Tasmania treat it as an ordinary recoverable outgoing. South Australia blocks direct recovery but lets the liability be taken into account when rent is assessed. The Northern Territory has no land tax at all.

Queensland is at the strict end of the country, not in the middle of it. The Act was last reviewed in 2014.

If you would like a second set of eyes across a lease or a portfolio, reply to the newsletter or email [email protected].

Antony Acutt is Managing Director of Altiera, a commercial buyers agency and asset management business in Brisbane. Altiera manages commercial property across South East Queensland and buys on behalf of private investors.

Sources: Land Tax Act 2010 (Qld) ss 7, 19, 20, 83A. Retail Shop Leases Act 1994 (Qld) ss 5A, 5B, 7, 16, 17, 24, 37, 38A to 38C, 48. Queensland Revenue Office land tax rate schedules and Public Ruling LTA020.1.2. Queensland Valuer-General 2026 statewide valuation release, 11 March 2026. Wyuna Court Pty Ltd v Vikpro Pty Ltd [2015] QSC 216; Vikpro Pty Ltd v Wyuna Court Pty Ltd [2016] QCA 225. Revenue Legislation Amendment Act 2017 (Qld), assented 16 June 2017, which inserted s 83A. Discussion Paper, Review of the Retail Shop Leases Act 1994 (Qld), Department of Customer Services, Open Data and Small and Family Business, June 2026. Clayton Utz Retail Leases Comparative Analysis for the interstate positions: Retail Leases Act 1994 (NSW) s 26, Retail Leases Act 2003 (Vic) s 50, Retail and Commercial Leases Act 1995 (SA) s 30, Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) s 12(1g), Leases (Commercial and Retail) Act 2001 (ACT) s 70, Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 (Tas) s 18.

General information only. Nothing here is legal, tax or financial advice. Check your own leases and your own position with your solicitor or accountant.