Queensland land tax foreign surcharge relief changes

In brief

The way foreign companies and trustees of foreign trusts obtain relief from the Queensland land tax foreign surcharge (LTFS) is changing. For land tax liabilities arising on or after 30 June 2026 (that is, from the 2026-27 land tax year), the existing ex gratia relief regime is replaced by a new administrative exemption framework. Affected landholders should review their eligibility and prepare to lodge the new application forms from 1 July 2026. In summary:

New framework - the ex gratia relief regime under Public Ruling LTA000.4 is replaced by an administrative exemption framework under Public Ruling LTA000.6.1 (significant contributors) and Public Ruling GEN012.1 (residential land developers), for LTFS liabilities arising on or after 30 June 2026.

New forms - from 1 July 2026, affected foreign entities must lodge a new application form for the 2026-27 land tax year: LT31 for significant contributors and LT30 for residential land developers.

Existing relief holders - previously granted ex gratia relief continues to apply to liabilities arising before 30 June 2026 under the updated guidelines. For the 2026-27 land tax year, existing relief holders that are not developers should complete and lodge the new LT31 Form as a pre-approval request. The QLD Revenue Office (QRO) will then decide if further information is required to grant an exemption under the new framework.

Significant contribution benchmarks - applicants must have at least 75 full-time equivalent Queensland employees or at least $20 million of Queensland expenditure annually (outside the regional and industry-specific categories), with labour hire and contractors excluded from the employee test and capital expenditure excluded from the expenditure test.

Changes to tracing rules – The threshold for tracing for demonstrating satisfaction of the criteria has been reduced from 100% to 90% and expanded to allow tracing for most of the Australian based requirements (formerly limited to the significant contribution requirement). However, tracing is limited to individuals or corporations registered under the Corporations Act 2001 (Cth) and the position on tracing for trusts is currently unclear, with consultation with industry ongoing. In the interim, it is understood the QRO's practice is to trace through corporate trustees rather than unitholders.

Developer changes – For both LTFS and additional foreign acquirer duty (AFAD) relief, the dwelling threshold has been lowered from 50 to 20, with a new specific ruling covering both AFAD and LTFS introduced for developers.

Proportionality test - a renewed emphasis on the proportionality sense-check between commercial activities and taxable land value, with QRO indicating that commercial activities commensurate with the taxable value of the land would satisfy the test. How this will be administered in practice remains to be seen, especially for rural primary producers.

In detail

Background

Under the Land Tax Act 2010 (Qld), owners of land that are foreign companies or trustees of foreign trusts are subject to a surcharge rate of land tax - the LTFS - on the taxable value of their taxable land, in addition to the general rate of land tax. The surcharge currently applies at 3% on taxable land valued at $350,000 or more. Importantly, the LTFS applies to all freehold taxable land owned by a foreign entity, not only residential land, and even Australian-incorporated or resident entities can be caught where they have sufficient direct or indirect foreign ownership.

The Queensland Government first signalled its intention to streamline and simplify the process for ex gratia relief from the foreign surcharges in the 2025-26 QLD Budget. At that stage the focus was on how the existing relief was administered, rather than on new substantive requirements, aiming to provide greater certainty around eligibility for relief and more timely consideration of applications. It also undertook consultation with industry, through the re-established Property Consultative Committee, to identify and implement appropriate changes to the eligibility criteria.

The changes were introduced on 15 December 2025, when, as part of the 2025-26 QLD Mid-Year Fiscal and Economic Review, the Government announced reforms to the relief arrangements for foreign surcharges and the Commissioner of State Revenue simultaneously issued four public rulings to give them effect:

LTA000.6.1 (new) - provides the LTFS exemption for significant contributors, applying to LTFS liabilities arising on or after 30 June 2026.

GEN012.1 (new) - provides the AFAD and LTFS exemptions for residential land developers, applying to AFAD liabilities arising on or after 15 December 2025 and LTFS liabilities arising on or after 30 June 2026.

LTA000.4.4 (updated) - preserves the previous LTFS ex gratia relief guidelines, continuing to apply to LTFS liabilities arising before 30 June 2026.

DA000.15.5 (updated) - preserves the previous AFAD ex gratia relief guidelines, continuing to apply to AFAD liabilities arising before 15 December 2025.

This was followed by further published guidance released in May 2026 which set out the evidentiary requirements for each of the relevant criteria, together with examples of how the criteria will be administered in practice.

Reflecting the broader policy aim of boosting housing supply and investor certainty, the key announced measures included lowering the number of dwellings needed to qualify for developer relief from 50 to 20, a pre-approval process for residential developers and publishing service standards for processing applications.

However, changes to the corporate tracing rules to disallow tracing through certain types of entities (such as non-registered foreign entities and trusts), the exclusion of capital expenditure and a renewed emphasis on proportionality of activities relative to land values, may result in a narrowing of the availability of relief for some taxpayers.

New application forms: LT31 and LT30

From 1 July 2026, foreign entities seeking an exemption from the LTFS for the 2026-27 land tax year should complete the relevant new application form. The relevant form for applicant entities to complete depends on the basis of the exemption claimed, as set out in the table below.

Form	Use	Relevant ruling
Form LT31	Application for exemption from the LTFS for landholders undertaking commercial activities that make a significant contribution (significant contributors).	LTA000.6.1
Form LT30	Application for exemption from the LTFS for large developers of residential land.	GEN012.1

Key procedural points to note when preparing an application include:

One application per entity. A separate form is required for each foreign entity seeking the exemption. Detailed instructions on how to complete the form are set out in the form itself.

Statutory declaration required. The completed application form must be accompanied by a statutory declaration completed by an authorised officer of the entity and lodged with the QRO at LTFSrelief@treasury.qld.gov.au. Once an exemption is approved, it continues for later financial years only if the entity lodges a statutory declaration at the beginning of each financial year confirming that it continues to satisfy the relevant conditions and that no notifiable event has occurred.

Pre-approval and exemption approval. The framework contemplates two types of approval. A pre-approval establishes the entity requirements (that the entity is Australian-based and meets the regulatory requirements), can be sought before the entity is liable for LTFS, and continues until a notifiable event occurs. An exemption approval is sought once a land tax liability has arisen and addresses the land-specific requirements (i.e. Foreign Investment Review Board (FIRB) compliance, the significant contributor or developer test, and proportionality). An entity that holds a pre-approval still lodges when a liability arises, but its application then needs only to address those land-specific requirements, which streamlines the process. For entities previously approved for ex gratia relief, the QRO has indicated that, the form should be completed and lodged as a “pre-approval" form. Once received the QRO will consider whether further information is required to grant an exemption. However, no further application form for exemption should initially be required.

Supporting evidence. The QRO has published separate evidence guidelines (for example, "Evidence for land tax foreign surcharge significant contributor exemption application") setting out the information and documents required, together with examples of how the criteria will be considered. These guidelines provide general information and do not override the ruling, with each application considered case-by-case.

Eligibility criteria under Public Ruling LTA000.6.1

To qualify for the significant contributor exemption, a foreign entity must demonstrate that it satisfies all of the following categories of requirement. Each application is assessed on a case-by-case basis, and the relevant facts and circumstances are generally considered as at the liability date (30 June) and across the 12 months immediately before that date.

Australian-based requirements and tracing rules

The entity must demonstrate that it is Australian-based. Unlike the previous ex gratia Ruling LTA000.4, paragraph 13 of LTA000.6.1 (and paragraph 16 of GEN012.1) requires all of the specified conditions to be met for an entity to be Australian-based. This includes that the entity has significant management staff (directors and managers who are employees) and that decisions about the entity's business and operations in Australia are primarily made by the entity's management or employees in Australia.

A welcome change under the new framework is that corporate group tracing is now permitted when establishing the Australian-based requirements. Under LTA000.6.1, these conditions, other than the requirement for the applicant entity itself to have a head office or principal place of business in Australia, may be satisfied by a parent or subsidiary of the applicant entity, or by a series of parent and subsidiary arrangements, within the relevant corporate group. The head office or principal place of business condition cannot be traced through the group and must still be evidenced by the applicant entity itself.

In recent years, the QRO had also started to disallow tracing between sister subsidiaries, only allowing tracing up and down the same 100% owned corporate chain. This was despite no change to the actual ex gratia relief public rulings. Under the new framework this has now been addressed to allow for tracing between sister subsidiaries.

However, an important change under the new tracing rules for corporate groups is their limitation to corporations registered under the Corporations Act 2001 (Cth). While it is possible for foreign entities to be registered in certain circumstances, in most cases they are not. Accordingly, tracing up to a foreign parent between Australian subsidiaries or corporate chains is not possible under the new framework.

While tracing through corporate groups is now clear, the position for tracing through trusts is not. The rulings do not set out a tracing rule for trusts. Based on discussions with QRO, the current interpretation is that tracing operates through the corporate trustee as the entity, rather than through the unitholders or beneficial owners of the trust, consistent with the broader tracing rules being framed around corporate groups (eligible parent or subsidiary entities). The QRO has indicated that it is still working through these points, including in discussions with industry, so the treatment of trust structures remains uncertain and should be approached with caution pending further guidance.

Where tracing is applied to satisfy the requirements, it is important to note that where the corporate group changes such that the entity, or an entity it has traced to, leaves the group, this can constitute a notifiable event requiring the QRO to be notified within 28 days.

Importantly, the guidelines do note that where land is held by a nominee or custodian appointed for regulatory compliance purposes, these are looked through with the eligibility for the exemption being determined with reference to the activities of the next level trustee.

FIRB and regulatory requirements

The entity must demonstrate compliance with FIRB requirements and any applicable regulatory requirements relevant to its activities and landholdings (for example, obligations under the Corporations Act 2001 (Cth), ASIC requirements and the ASX Listing Rules or equivalents, and compliance with Queensland revenue laws). A key point for corporate groups is that, where the entity relies on corporate group tracing to establish eligibility, the application forms make clear that all of the relevant group entities within the corporate group (including the applicant entity itself) must comply with the regulatory requirements, not only the entity claiming the exemption.

It is also important to note that FIRB compliance is a land-specific requirement assessed when the LTFS liability arises, rather than one that can be locked in through any earlier pre-approval of the entity.

Significant contribution requirement

The entity (or its relevant corporate group) must undertake commercial activities that make a significant contribution to the Queensland economy and community. A foreign entity that essentially holds land passively (for example, as a landlord or property investor) is generally not considered to be making a significant contribution.

The contribution is measured by reference to recurrent or ongoing commercial activity in Queensland - such as the number of full-time equivalent Queensland employees and annual expenditure on wages, payroll tax, land tax, and goods and services - rather than one-off or capital outlays. Outside the regional and industry-specific categories, in order to be eligible the public rulings require the entity (or its corporate group) has at least 75 full-time equivalent Queensland employees or at least $20 million of Queensland expenditure annually, with labour hire and contractor arrangements specifically excluded when assessing the 75 full-time equivalent employee test. It is also important to note, one-off transactions and capital expenditure, including redevelopment and capital works undertaken on the land, are generally given little weight when considering an applicant's expenditure in Queensland.

As a result, entities relying largely on a single capital investment may find it difficult to demonstrate a significant contribution. As such, entities undertaking capital work or development on non-residential land (for example commercial or industrial developments) may have difficulty obtaining relief under this administrative exemption, with minimal alternative avenues for LTFS relief. Conversely, while residential land developers may be unable to obtain relief under the significant contribution administrative exemption (unless housing stock is treated as inventory in their balance sheet), there is an alternative avenue for relief with the residential land developer administrative exemption (explained below).

The contribution assessment generally focuses on the 12 months immediately before the relevant land tax year. Where commercial activity varies from year to year, an entity may instead apply annual averaging over a period of up to five years to demonstrate that it meets the significant contribution threshold, and an entity may also rely on committed future commercial activities.

Size and scale (proportionality)

The size and scale of the commercial activities conducted by the entity (or the relevant corporate group of which it is a group entity) must be proportionate to the taxable land for which the exemption is sought.

While present under the former ex gratia relief public rulings, this had historically been treated as a tick the box exercise when all other criteria had been met. However, under the new framework, there is increased emphasis on this new proportionality requirement as its own distinct condition to be satisfied in addition to the significant contribution requirement.

Because an exemption, once granted, applies to all of the entity's taxable land in Queensland, the Commissioner's evidence guidelines indicate that relief should only be available where the relevant commercial activities are of a commensurate size and scale having regard to the entirety of the entity's taxable land. As a result, an entity that holds a large or high-value land portfolio may in substance need to demonstrate a greater level of contribution than the benchmarks outlined above might suggest. The guidelines specifically note that where an entity is a significant landholder and its activities represent only a small portion of the value of its land, eligibility may require further consideration.

As an indicative guide, the QRO suggests that where the value of the relevant activities in a year is equal to or greater than the value of the entity's taxable land, the proportionality requirement would prima facie be satisfied, although this is not an absolute rule and each application is assessed on a case-by-case basis.

This test may be particularly challenging for land-heavy or asset-intensive industries - such as agribusiness, primary production or similar operations that hold extensive landholdings relative to their operating expenditure and workforce - where the value of the taxable land can be large compared with the recurrent commercial activity conducted on it. In those cases, the regional and industry significance concession in the public ruling may assist. The Commissioner has a discretion to approve commercial activities (or an entity or relevant corporate group) as making a significant contribution in non-metropolitan areas or particular industries, having regard to factors such as the population size and demographics of the area, the nature and maturity of the relevant industry, whether the entity is a major employer in the region, and whether the industry or activity would exist in the absence of the entity. Entities in seasonal or land-intensive sectors should therefore consider whether their application can be framed by reference to their regional or industry significance where the standard proportionality and contribution benchmarks are difficult to satisfy.

Despite the new rulings stating that they take effect from 30 June 2026, the QRO has been applying some elements of the new framework to applications that are currently under consideration in respect of prior land tax years. For example, the QRO appear to be allowing for tracing to sister subsidiaries and for the purposes of the Australian based requirement. However, it appears unlikely that this would extend to tracing to less than 100% parent or subsidiary entities.

Eligibility criteria under Public Ruling GEN012.1 (residential land developers)

Foreign entities seeking the LTFS exemption for residential development apply under Public Ruling GEN012.1 using Form LT30. The same entity requirements apply as for significant contributors: the entity must be Australian-based and meet the regulatory and FIRB requirements. The key difference lies in the substantive commercial activity test, which focuses on the scale of residential development rather than a broader economic contribution.

Unfortunately, the QRO has not taken the opportunity to alter its approach to the timing of testing the entity requirements, which are tested as at the liability date (in most cases the date the agreement to acquire the land has been signed). This has historically been difficult for some developers to satisfy, as in a lot of cases the landowner is a new special purpose vehicle that has not employed or contracted with anyone prior to signing the land sale contract. However, the ability to trace for the entity requirements should hopefully alleviate this issue (subject to the final outcome on the tracing for trusts).

To meet the large developer requirement, the entity (or the relevant corporate group of which it is a group entity) must have undertaken, or be undertaking, developments or redevelopments of 20 or more residential lots in Queensland - including the land for which the exemption is sought - in the year for which the exemption is claimed. This requirement can be satisfied directly by the entity or by an eligible parent or subsidiary, or a combination of such entities. Where development output varies from year to year, an entity may use annual averaging over a period of up to five years to demonstrate that it is developing 20 or more residential lots per year.

The exemption is available only while development activities are being undertaken. Once a development is complete, the entity will generally be treated as holding the land passively as an investor, and the land will no longer qualify. Where the entity is awaiting planning approval and was exempt from AFAD on its acquisition of the land, the land may be taken to be used for development activity for two financial years starting from the 1 July immediately following the date the entity became the owner. The Commissioner also has a discretion to approve developments of fewer than 20 residential lots in non-metropolitan areas, declared priority development areas or coordinated projects, having regard to the contribution to housing stock and the economic and social impacts for the area. An entity cannot access this exemption for land to which the build-to-rent concession applies, or where it has been approved under the significant contributor ruling for the same land.

In addition to the LTFS exemption, Public Ruling GEN012.1 also provides an exemption from AFAD. The criteria for both LTFS and AFAD are helpfully aligned with AFAD not imposed on a transfer, or agreement for the transfer of AFAD residential land if the entity requirements are satisfied at the liability date and either:

The land is a “qualifying development". That is, it is AFAD residential land that is acquired for the purposes of undertaking a development or redevelopment of 20 or more residential lots in QLD and the development is primarily residential; or

The entity, or the relevant corporate group, is a large developer (i.e. an entity, or relevant corporate group, that undertakes development or redevelopment of 20 or more residential lots in QLD in a relevant 12 month period, including the land the subject of the exemption (allowing for averaging for up to 5 consecutive financial years and special consideration for regional and priority development areas).

Pre-approval of the LTFS and AFAD exemptions are available for an entity that has previously been approved for an AFAD exemption or ex gratia relief, or a group entity in the corporate group has been approved for AFAD or LTFS relief while a member of the group and the entity is a member of the same group as that group entity at the time the duty liability arises.

Lodgment timeline from 1 July 2026

The LTFS liability for the 2026-27 land tax year arises by reference to land owned at midnight on 30 June 2026. The indicative steps and timing to take regarding applying for LTFS relief under these new rulings:

Review eligibility. Review the relevant public ruling (LTA000.6.1 or GEN012.1) and the QRO evidence guidelines to confirm the foreign entity meets all requirements.
From 1 July 2026 - complete the form. Complete the relevant application form (Form LT31 or Form LT30), one per entity that is applying for LTFS relief.
Shortly after 1 July 2026 - lodge. How you lodge depends on your starting position.
- An entity that did not previously hold LTFS ex gratia relief should lodge a full application, including completed application form (Form LT31 or Form LT30) together with all relevant supporting material and the statutory declaration of an authorised officer.
- An entity that already holds LTFS ex gratia relief, in the first instance, should complete and lodge the pre-approval sections of the Form LT31 and the statutory declaration annexed to the new form without providing the full supporting material. The QRO may then raise follow-up questions after lodgement.
  
  In each case, lodge by email to the QRO at LTFSrelief@treasury.qld.gov.au.

Following lodgment, the QRO will either process the application or request further information. On processing timeframes, the QRO has updated its client charter to commit to 60 working days from receipt of all necessary information for original applications, and 30 working days for renewal applications and entity pre-approvals. By not requiring full re-applications from existing relief holders, the QRO may improve these timeframes in practice, although this remains to be seen.

What this means for you

Foreign companies and trustees of foreign trusts that own taxable land in Queensland, and that currently benefit from (or expect to require) relief from the LTFS, should act now. In particular, you should confirm whether your relief sits under the significant contributor or the residential developer pathway, identify the correct form, and ensure an authorised officer is available to complete the required statutory declaration. Entities should also maintain processes to monitor for notifiable events, consistent with the 28-day notification obligation that continues to apply as it did under the previous ex gratia relief.

How PwC can help

Our State Taxes team can assist with assessing eligibility under the new rulings, preparing and lodging Form LT31 or Form LT30 and the accompanying statutory declaration, compiling and presenting supporting evidence, and managing any follow-up queries from the QRO. We can also advise on the corporate tracing and trust structuring considerations that are central to demonstrating eligibility under the new framework, and help establish processes to meet the ongoing notification requirements.

The takeaway

While the QRO has stated that it is not intended for holders of existing ex gratia relief to become ineligible under the new framework, this may not be the case for all taxpayers and it is important that existing holders of relief review their eligibility under the new requirements. For those that were not previously eligible, it is worth revisiting whether there are any changes to the criteria which may now make relief accessible, particularly where the barrier to relief was due to the inability to trace through to associated operating entities.

Over the last several years, the LTFS and AFAD relief regime has been a source of great uncertainty, with inconsistent outcomes and lengthy processing times for many taxpayers. While the changes are mostly positive, it will be important to monitor how some of the changes (particularly around trusts and proportionality) are administered over the forthcoming year, and whether processing times are ultimately improved.