Land Tax Trap

Land Tax Planning: One of the Most Powerful, Underused Property Strategies in Australia

Land tax doesn't hit you once like capital gains tax; it keeps taking, year after year.

In QLD and NSW especially, crossing the land tax threshold can result in thousands of dollars in annual tax, often without investors realising it could’ve been avoided or legally reduced. Let's unpack how:

Land Tax Thresholds - Queensland (2025)

Owner Type	Land Tax Threshold
Individual	$600,000
Trust/Company/Absentee	$350,000

Land tax is calculated per entity, not per individual. This opens the door to major planning opportunities.

Example: Three Properties at $700k each

Held in your personal name	Held across 3 separate discretionary trusts (1 per property)
Combined land value: $2.1M	Each trust has $350k tax-free threshold
Taxable above $600K threshold = $1.5M	Taxable value per trust: $350k
	Combined annual land tax: ~$6,000
Annual land tax: ~$22,000+	Tax saving: ~$16,000 per year

Structuring Watchpoints

• Each trust must have a different trustee to avoid aggregation

• Not all lenders treat trusts the same; the finance structure matters

• Land tax rules vary across states, e.g. NSW doesn't give land tax threshold to trusts unless they're fixed/unit trusts

• Corporate trustees add cost but offer legal protection

When Structure Solves the Problem

Structure	Land Tax Threshold	Used For
Individual	$600,000 (QLD)	Simple cases with limited assets
Company	$350,000	Developments, trading properties
Discretionary Trust	$350,000 (per trust)	Long-term investors, portfolio builders
Multiple Trusts	$350K x # of trusts	High-value portfolios needing segregation

Land tax isn't optional, but overpaying is. Use structures not just to protect wealth, but to preserve your returns. If you're buying a second or third property or already own them, it's worth reviewing your land tax exposure before the next bill arrives.

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Nijo Antony

Director