Recovering Land Tax Under a Queensland Commercial Lease: The Three Tests
Sometimes. Three things decide whether a Queensland landlord recovers land tax from a commercial tenant: whether the tenant is retail, when the lease was first signed, and what the land tax clause says. Two of those override whatever the lease says.
1. Retail tenants: no
If the tenancy is a retail shop lease under the Retail Shop Leases Act 1994, you cannot recover land tax. Section 7(3)(a) takes land tax out of outgoings, and section 17 voids any clause requiring the tenant to pay or reimburse it. Routing it through a related entity or listing it as an outgoing does not work either.
The Act reaches further than most owners expect. A tenancy is a retail shop if it sits in a retail shopping centre, or if it is used wholly or mainly for a retail business. There are two ways out. Premises over 1,000 square metres are excluded. So are non-retail premises on a level where retail was 25 per cent or less of the lettable area when the lease was signed.
2. Leases first signed between 1992 and mid 2009: no
Section 83A of the Land Tax Act 2010 makes a land tax clause unenforceable in a lease entered into after 1 January 1992 and before 30 June 2009. It also catches renewals under options in those leases, and assignments of them.
The test is the original date, not the current term. A lease signed in 2007 with two five year options, both exercised, is still running today. Its land tax clause looks normal. It does not work.
3. Everything else: the clause decides
For a non-retail lease signed on or after 30 June 2009, you recover land tax if the lease says so. The question is how much.
Queensland assesses land tax on the total value of all the land you own, on a progressive scale. The same building produces a very different figure for an owner with one property than for an owner with ten. So the clause needs to name its basis:
Single holding basis. Land tax calculated as if this were the only land you owned. Predictable for the tenant.
Actual assessment basis. Your real aggregated bill, apportioned. It grows every time you buy.
If the clause names neither, expect an argument at the next assessment.
Why check your leases now
On 11 March 2026 the Valuer-General reissued land valuations across 15 council areas. Ipswich rose 51 per cent and Lockyer Valley 56 per cent. On the Gold Coast, industrial land rose 53.3 per cent. The new values apply from 30 June 2026. An outgoings budget issued before March may be well short.
What to do this week
Pull the original start date of every lease. Flag any between 1 January 1992 and 30 June 2009.
Mark which tenancies are retail shop leases. Check the centre test, the use test, the 1,000 square metre limit and the 25 per cent level test.
Read the land tax clause on everything else. Note whether it says single holding or actual assessment.
Check your outgoings estimates against the new valuations.
For the case law, the full land tax scales and the retail lease review now under way, read the full deep dive: Can you pass land tax on to your tenant in Queensland?
Want a second set of eyes across a lease or a portfolio? See how our commercial property management in Brisbane works, or get in touch.
General information only. Not legal, tax or financial advice. Check your own leases with your solicitor or accountant.