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HG Alert: New clauses to allow land tax recovery - Jun 2009

The Revenue and Other Legislation Amendment Act 2009 comes into effect on 30 June 2009. It lifts the current restriction in the Land Tax Act 1915 that prevents landlords of commercial and industrial properties (and retail properties not governed by the Retail Shop Leases Act 1994) passing land tax directly to tenants.

This change allows landlords more flexibility in recovering land tax as an outgoing where, for example, land values are revised dramatically during a long-term lease.

HopgoodGanim Lawyers has updated the drafting of our standard commercial lease documents in view of the new Act.

The legislative amendment, and recovery of land tax under our revised lease documents, will only apply to new leases entered into from 1 July 2009. This is because the Act continues to prohibit the recovery of land tax from the tenants where a lease:

  • is subject to restrictions in the Residential Tenancies Act 1994 and the Retail Shop Leases Act 1994;
  • is entered into before 1 July 2009, even if it contained a clause permitting or contemplating the recovery of land tax;
  • arises from an option to renew being exercised under a lease entered into before 1 July 2009; or
  • arises from an assignment of a lease entered into before 1 July 2009.

HopgoodGanim’s previous alerts on this subject, ‘Proposal to make Land Tax recoverable by Lessors’ and ‘Important changes to Queensland’s land tax system’, are available online.