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Landlords To Pass On Land Tax To Tenants In Commercial Properties - News Article 29/06/09

While until now, most landlords calculated the rent they charged to commercial tenants based on costs they knew about, and thereby, indirectly passed on costs including land tax incurred by them, it has now been made easier by the Queensland government to pass on land tax to tenants as well.  New Queensland legislation will allow landlords of commercial and industrial premises to pass on land tax to tenants in new leases entered after 30 June 2009.  The current legislation prohibits landlords recovering land tax from tenants. This prohibition is being removed from new commercial and industrial leases. The restriction will still apply to retail shop leases and residential leases.

What is important to know is that:

  1. The removal of the restriction will only apply to a new lease entered and signed after 30 June 2009.

  2. It will not give the landlord’s the right to pass on the land tax for leases entered before 30 June 2009.  This will include a lease that arises from a tenant exercising an option to renew under an existing lease dated prior to 30 June 2009 or one that arises from an assignment of a lease pre-dating 30 June 2009.