From 1 July 2011, Queensland will move from a 'land rich' to a 'landholder' stamp duty model. The Community Ambulance Cover Levy Repeal and Revenue and Other Legislation Amendment Bill 2011 (Qld) was passed by Parliament on 17 June 2011 and subject to receiving assent will affect both listed and unlisted companies and listed unit trusts which hold interests in land in Queensland. Duty will be payable where a 'relevant acquisition' is made in an entity and the value of that entity's Queensland land holdings exceeds $2 million (either alone or through its subsidiaries). There will no longer be a requirement that the landholding be a substantial portion of the entity's total assets (i.e. 60% or more).
A relevant acquisition will occur where a person acquires a 'significant interest' in a landholder. A significant interest is an interest of 50% or more in an unlisted company and 90% or more in a listed company or listed unit trust. All interests held in an entity are taken into account to determine whether a person has a significant interest and duty may apply regardless of when the interests were acquired or whether or not the entity was a landholder or land rich when a previous interest was acquired (provided that certain excluded interests are to be disregarded when calculating the duty payable).
Calculating Duty
For public landholders (listed companies or listed unit trusts) land holder duty is 10% of the duty that would be chargeable on a transfer of all Queensland land holdings of the landholder, reduced proportionately for excluded interests. Excluded interests include those interests acquired when no Queensland land was held and interests acquired before 1 July 2011.
For private landholders (unlisted companies) the dutiable value of a relevant acquisition is calculated by multiplying the unencumbered value of all Queensland land holdings of the landholder by the total interests held in the landholder constituting the relevant acquisition, less any excluded interests. Excluded interests include those held for more than 3 years (except if the latest acquisition is part of an arrangement) and interests acquired when no Queensland land was held.
Implications
The new 'landholder' system effectively broadens the tax base. It will apply not just to those previously 'land rich' corporations but also to other companies with interests in land in Queensland incidental to their operations. It also has implications for takeovers of listed companies and trusts.
Acquisitions made in private landholders before 1 July 2011 will generally be taken into account in determining whether there has been a relevant acquisition on or after 1 July 2011.
Queensland's new landholder duty regime is similar to those already adopted in Western Australia, the ACT, New South Wales and the Northern Territory. South Australia is also moving to a 'landholder' duty model on 1 July 2011 and Victoria seems set to follow on 1 July 2012.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
