Deceased estates and land tax
When someone dies, the land that they owned, other than land owned as a joint tenant, forms part of their deceased estate. The administrator or executor of a deceased estate will apply to the Supreme Court for a grant of probate or letters of administration. This allows them to pay the debts of the estate, and sell or transfer land.
Land held by joint tenants
Land held as joint tenants automatically transfers to the surviving owner from the date of death.
If you have not registered a Form 4—Request to record death with Titles Queensland before the next 30 June following the date of death, you need to contact us. If you don’t attend to this in a timely manner, the surviving owner could receive delayed land tax assessment notices that may include penalties and interest.
The executor, administrator or trustee will hold any interest in land that was held by the deceased other than as joint tenants (e.g. as sole owner or as tenants in common) until they have sold or transferred the land.
Michael passed away in 2018. At the time of his death, he and Jane held commercial land as joint tenants (valued at $1.1 million).
Five years after Michael’s death, Jane registered the Form 4. Ownership of the land then transferred from the date of death, and Jane received 5 years of land tax assessments.
Land held other than as joint tenants
The executor, administrator or trustee of a trust created under the will (the estate administrator) holds any interest in land that was held by the deceased other than as joint tenants (e.g. as sole owner or as tenants in common) until they have sold or transferred the land. They will need to pay any land tax liabilities during this period.
The deceased landowner is still considered the owner of the land until administration of the estate is completed. After this, the estate administrator will be assessed as the owner until the land is transferred or sold, except in certain circumstances where beneficiaries are eligible to be assessed as the owners. If the estate administrator commences holding the land other than as an estate administrator, they will be assessed as a trustee.
Land tax applies to the land when its total taxable value is:
- $350,000 or more—for absentees, companies and trustees of trusts and superannuation funds
- $600,000 or more—for individuals and trustees of special disability trusts.
The estate’s liability may be reduced if an exemption applies or if a beneficiary is eligible to be assessed as the owner of the land.
Exemptions
If the deceased owner was eligible for a home exemption at the prior 30 June, the exemption may continue to be available for up to 1 year after the date of death.
The taxable value of Bob’s land holdings is $650,000 on 30 June 2022.
On 17 August 2022, Bob passes away. The administrator of Bob’s estate applies for a home exemption for the property Bob was living in on 30 June 2022. If approved, the home exemption will continue until 17 August 2023, unless the property is rented or transferred in accordance with Bob’s will.
Other exemptions may continue to apply where the land continues to be used for an eligible purpose (e.g. a business of primary production).
Beneficiaries
You may also ask for certain beneficiaries to be assessed as the owner to reduce the liability of the estate.
Where the will provides for a life estate or a gift of a specific interest in land to a beneficiary and administration is complete, you can complete a Form LT24 to ask for the beneficiary to be assessed as if the land has been transferred into their name.
Estate administrator obligations
As an estate administrator, you must contact us if:
- a Form 4—Request to record death has not been registered with Titles Queensland before the 30 June following the date of death
- a Form 5—Transmission application has not been registered with Titles Queensland before 30 June following the date of death
- you commence holding the land other than as an estate administrator (e.g. an administrator, executor or trustee of a trust created under the will). In this instance, the land may be liable for land tax if the taxable value is $350,000 or more. Exemptions may be available.
You should obtain a clearance certificate before transferring any land to a beneficiary. This will confirm that all land tax has been paid by the estate. Otherwise, the beneficiaries may receive assessments that could cover several years, and include penalties and interest.
Read the public ruling on deceased estates (LTA023.1) for more information.