Industrial and commercial tenants in Queensland beware - possible land tax changes

Posted: 14/05/2009 Landlords are currently prohibited from recovering land tax from tenants under Queensland industrial and commercial leases: section 44A of the Land Tax Act 1915 (Qld). The position may change as a consequence of the draft Land Tax and Taxation Administration Amendment Bill 2009 (Qld) (“Draft Bill”). The Draft Bill proposes that land tax will be recoverable by landlords from tenants in respect of leases entered into after 30 June 2009, but will not extend to leases entered into prior to 30 June 2009 or to renewals and assignments of those leases. In view of these potential changes, tenants cannot continue to rely on the current statutory regime to prohibit the recovery, by landlords, of certain outgoings (including land tax). As such, tenants will need to negotiate specific provisions in their leases if they wish to exclude their liability for these outgoings. From the landlord’s perspective, landlords should ensure that leases (entered into after 30 June 2009) include provisions allowing for the recovery of all outgoings permitted at law. If you require any assistance with protecting your rights under existing leases, or in relation to the preparation of new lease agreements, please speak with us.