A draft Land Tax and Taxation Administration Amendment Bill 2009 is seeking to repeal the current prohibition that prevents Landlords from passing on the cost of land tax so that it is payable by tenants as an outgoing. Effectively, if the Bill is passed, then the parties to a lease, being a lease which comes into existence after 30 June 2009, will be able to negotiate which of them will bear the costs of land tax as an outgoing. The Bill will not impact any leases governed by the Retail Shop Leases Act 1994.
In anticipation of the proposed amendments to the Land Tax Act 1915 (QLD)being passed, commercial Landlords will need to consider whether to amend their commercial leases to provide for land tax to be included as an outgoing payable by a tenant for any leases which come into existence after 30 June 2009. Please note that many precedent commercial leases currently provide for the inclusion of land tax as an outgoing and as such, will not need to be redrafted if the Bill is passed.
Contact Paul Petersen for further information.