Australia: Time for commercial lessees to pick up the land tax bill in Queensland?

Last Updated: 7 February 2017
Article by Justin Byrne and Meryl Snow

In September 2016 the case of Vikpro Pty Ltd v Wyuna Court Pty Ltd ATF Wyuna Court Unit Trust [2016] QCA 225 was heard before Holmes CJ, Phillipedes and Phillip McMurdo JJA in the appeal division of the Supreme Court of Queensland. The outcome of the case was a fundamental, 360-degree change in respect of the party that bears the land tax liability in a commercial lease arrangement. In this Alert, Partners Justin Byrne, Meryl Snow and Law Clerk Felicity Dunstone consider the implications this will have on commercial lease arrangements.


The tenant leased land under a lease which provided that the lessee was liable to pay, or otherwise recompense the lessor for land tax incurred during the period of the lease. The lease was entered into in August 2006 for a 70-year term. Prior to the amendments to the Land Tax Act (see below), Clause 11.2 was unenforceable against the lessee.

Legislative Changes

The Land Tax Act 1915 (Qld) (repealed) (1915 Act) rendered unenforceable contractual provisions that required the lessee to pay all taxes and rates in respect of demised land. Therefore pursuant to section 44(1A) of the 1915 Act, the landlord's rights to recover land tax from a tenant under a commercial lease entered into after 1 January 1992 were suspended.

44A Provision to pay land tax etc. unenforceable

  1. A provision in a lease entered into after 1 January 1992 requiring a lessee to-
    • pay land tax; or
    • reimburse the lessor for land tax;

    is unenforceable.

This section was removed and replaced by transitional provisions in 2009. The enactment of the Land Tax Act 2010 (Qld) (2010 Act) sought to reverse this position.

Sections 88 and 89 of the transitional provisions to the 2010 Act provided as followed:

88 Application of this Act

  1. This Act applies to—
    • a post-commencement liability; and
    • an act or omission done or omitted to be done for this Act on or after 30 June 2010.

    This section applies subject to section 93.

89 Continued application of repealed Act

Despite its repeal, the repealed Act continues to apply to—
  • a pre-commencement liability; and
  • an act or omission done or omitted to be done for the repealed Act before 30 June 2010.?

Section 86 defined "post" and "pre" commencement liabilities:

  • A "post-commencement liability" was defined as meaning 'a liability for land tax arising on or after 30 June 2010'.
  • A "pre-commencement liability" was defined as meaning 'a liability for land tax, within the meaning of the repealed Act arising before 30 June 2010'.

Lessee's Claim

The lessee contended it was not liable to pay land tax levied in relation to the land because provisions of the 1915 Act still continued in a relevant manner.


The Court held the deliberate failure by the Government to re-enact a provision equivalent to section 44(1A) of the 1915 Act illustrated an intention to reverse this position in the 2010 Act. Thereby, this allowed a landlord with appropriate lease provisions to recover land tax (imposed on or after 30 June 2010) from a tenant.

Chief Justice Holmes rejected the Appellant's contentions, and held that the transitional provisions (sections 88 and 89), when read together, clearly drew a distinction between the continuation in the same manner under the 1915 Act of pre and post-commencement liabilities to land tax. Principally, Her Honour confirmed that the 2010 Act contemplated the following:

  • The provisions relating to pre-commencement liabilities to land tax would continue to apply in accordance with the repealed 1915 Act.
  • The provisions relating to post-commencement liabilities (i.e. land tax incurred on leased properties) would be dealt with in accordance with the provisions of the 2010 Act.

Her Honour confirmed that the Explanatory Notes to the Transitional Provisions did nothing to indicate that the legislature contemplated that a lessee's relief from liability to land tax should continue as it had under the 1915 Act, but rather the clear implication from the repeal of section 44A of the 1915 Act was to change a lessee's immunity from payment of land tax.

Phillip McMurdo JA agreed with the reasons of Chief Justice Holmes, however Phillipedes JA was in the minority.

What does this mean for leasing arrangements?

This case has two major implications for lessors of commercial or industrial premises:

  1. A lessor may now offer a lease to a potential lessee in Queensland on terms that include recovery of land tax from the lessee for the duration of the lease.
  2. It appears that there has been a general practice of lessors including such clauses in leases despite their unenforceability under the 1915 Act. Should a lessor and lessee have a current existing lease agreement in Queensland that contains such a clause, that clause will now be enforceable against the lessee.

As a proceeding before a superior court of Queensland, this case provides a great deal of certainty for lessors and lessees.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

2015 AFR Beaton Client Choice Awards:
Best Law Firm (revenue $50m - $200m)
Best Professional Services Firm (revenue $50m - $200m)

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions