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Queensland Landholder Duty to apply from 1 July 2011 – By Christine Martin

Queensland has announced that its land rich duty model will be replaced with a Landholder Duty Model from 1 July 2011

Landholder Duty will apply as follows under the proposed amendments:

  • Acquisition of 50% or more of an unlisted company which holds 2 million dollars or more of land in Queensland
  • Acquisition of 90% or more of a listed company or trust holding 2 million dollars or more of land in Queensland

Under these amendments the 60% threshold test is removed for unlisted companies, therefore takeovers and schemes of arrangement where the entity acquired holds any interest in land in Queensland could attract payment of duty.

The new model will apply to agreements entered into after 1 July 2011 to purchase or acquire shares in a company or units in a trust that holds land.  The date of entering into the agreement and the actual completion of the transaction are important considerations when determining whether duty is payable and the amount of said duty ie

  • Where an agreement is entered into before 1 July 2011 and the subject of the purchase or acquisition was not a land rich entity under the current definition however will be at the time of completion of the transaction, and
  • Where shares or units are purchased or acquired in a landholding entity after 1 July 2011, any acquisition of shares or units in the landholding entity made before 1 July 2011 are included when determining whether the purchaser/acquirer has made a relevant acquisition.  Unlike some other states, in Queensland, these earlier acquisitions will not be included in the calculations to determine the amount of duty payable.

The new model will apply to takeovers of publicly listed landholder companies or unit trust schemes.  Current land rich provisions generally only apply in Queensland to takeovers of unlisted companies.

Landholder duty will apply to the unencumbered market value of landholder’s property at a rate of 5.25% for unlisted companies and a rate of 0.525% for publicly listed companies or unit trusts.

The Community Ambulance Cover Levy Repeal and Revenue and Other Legislation Amendment Bill 2011 (Qld) containing the proposed amendments was introduced to the Queensland Parliament on 14 June 2011.
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