Capital Gains Tax and Land Tax in Queensland: Everything You Need to Know

Understanding Capital Gains Tax and Land Tax in Queensland

If you own property in Queensland, you’ve probably heard the terms capital gains tax and land tax thrown around. They sound complex, but once you break them down, they’re actually quite straightforward — and understanding them can help you save thousands.

In this article, we’ll cover how each works, when they apply, and how to use a land tax calculator to estimate what you owe.

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What Is Capital Gains Tax (CGT) in Australia?

Capital gains tax (CGT) is the tax you pay on the profit you make from selling an asset, such as property, shares, or land. It’s part of your income tax, not a separate tax.

When you sell a property for more than you paid, the difference — minus any eligible deductions — is your capital gain, which you’ll need to report in your next tax return.

💡 In Queensland, CGT follows federal rules set by the Australian Taxation Office (ATO), not state law.

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When Does Capital Gains Tax Apply?

A CGT event occurs when you:

• Sell or transfer ownership of a property

• Gift property or change ownership structure (e.g. move into a trust)

• Stop being an Australian tax resident

For Queensland property owners, CGT applies primarily to:

• Investment properties

• Vacant land

• Holiday homes or second homes

Your main residence (the home you live in) is usually exempt under the main residence exemption.

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How to Calculate Capital Gains Tax in Australia

Here’s a simple step-by-step process for working out your capital gain.

1. Work out your capital proceeds

This is the amount you received from the sale, minus expenses like:

• Agent’s commission

• Legal and conveyancing fees

• Marketing and advertising

2. Determine your cost base

This includes:

• Purchase price

• Stamp duty

• Title transfer and legal fees

• Renovations and improvements

3. Subtract cost base from proceeds

Capital Gain = Sale Price – Cost Base

4. Apply the CGT discount

If you owned the property for 12 months or more, you may be eligible for a 50% discount on the gain.

Example:
If you made a $100,000 gain, only $50,000 is added to your taxable income.

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CGT Exemptions and Concessions in Queensland

🏡 Main Residence Exemption

If the property was your home for the entire period, you don’t pay any CGT when you sell.

🚶 Six-Year Rule

If you move out and rent your home, you can treat it as your main residence for up to six years — provided you don’t nominate another property as your primary residence.

⏳ Partial Exemption

If you rented your home for part of the ownership period, CGT applies only to the rented portion.

🧾 Small Business CGT Concessions

If the property is used in your small business, additional concessions may apply, such as rollover or retirement exemptions.

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Strategies to Reduce Capital Gains Tax in Australia

• Hold the property for more than 12 months to access the 50% discount.

• Sell in a low-income year to reduce your marginal tax rate.

• Offset capital losses from shares or other investments.

• Keep all documentation (contracts, legal fees, improvement receipts).

• Seek early tax advice before selling or transferring ownership.

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Land Tax in Queensland Explained

While capital gains tax applies when you sell, land tax is an annual state tax charged by the Queensland Revenue Office (QRO) on land you own as at midnight on 30 June each year.

It’s based on the total taxable value of all your landholdings across Queensland, excluding your home.

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Who Pays Land Tax in QLD?

If your land’s total taxable value exceeds the following thresholds, you’ll owe land tax QLD:

Your principal place of residence is typically exempt from land tax.

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Current Land Tax Rates (2025)

For individuals (according to QRO):

• $0 – $599,999 → No tax payable

• $600,000 – $999,999 → $500 + 1¢ for every $1 over $600,000

• $1,000,000 – $2,999,999 → $4,500 + 1.65¢ for every $1 over $1,000,000

• $3,000,000 – $4,999,999 → $37,500 + 1.25¢ for every $1 over $3,000,000

• $5,000,000 – $9,999,999 → $62,500 + 1.75¢ for every $1 over $5,000,000

• $10,000,000+ → $150,000 + 2.25¢ for every $1 over $10,000,000

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How to Use the Land Tax Calculator (QLD)

You can estimate your liability with the official Queensland Land Tax Calculator.

Just enter:

• The total taxable value of your land

• Your ownership type (individual, company, trust, absentee)

• Any exemptions you qualify for

🧮 Try our in-house Land Tax Calculator for a simple, instant estimate.

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Land Tax Exemptions in Queensland

Some land uses may be fully or partially exempt:

• Your home (principal place of residence)

• Primary production land (farms)

• Charitable or non-profit use

• Retirement villages and certain community housing

Always notify QRO if your property use changes, as exemptions can be withdrawn if land becomes income-producing.

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Capital Gains Tax vs Land Tax: What’s the Difference?

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How They Interact (and Why It Matters)

It’s possible to owe both taxes:

• Land tax while you own the property;

• Capital gains tax when you sell it.

Understanding both helps you manage cash flow and prevent unexpected bills at settlement.

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Smart Tax Tips for Queensland Property Owners

1. Track your land valuations each March — and object if you believe they’re too high.

2. Hold property for 12+ months to access CGT discounts.

3. Record every expense — these add to your cost base and reduce tax.

4. Sell during a low-income year for better CGT outcomes.

5. Use a land tax calculator to forecast annual costs and avoid surprises.

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Final Thoughts

Both capital gains tax and land tax are unavoidable parts of owning property in Queensland — but with good planning, they don’t have to be painful.

By using the right tools, like the Land Tax Calculator QLD, and understanding capital gains tax Australia rules, you can stay compliant, reduce your tax burden, and protect your investment profit.

Need guidance before selling or investing? Speak with a qualified accountant or property conveyancer who understands Queensland’s property tax laws inside and out.

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🔗 Helpful Resources

• Queensland Revenue Office – Land Tax Info

• ATO – Capital Gains Tax Guide

• Queensland Government – Property Valuations

 

This is general advise only for specific legal or tax advice speak with your specific legal representative or accountant.