Owning Queensland land in fractions: duty, land tax, capital gains

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Tax offices do not tax fractions. They tax transactions, owners and disposals, and each of those words has a legal meaning that an advertisement for "5% of an apartment" does not supply. Two people can each hold one twentieth of the economic value of the same Sunshine Coast unit and face different duty on the way in, a different position on land tax while they hold it and a different record-keeping task on the way out, purely because one holds units in a trust and the other holds a token.

This guide follows the three taxes that matter most to a fraction of Queensland property. Transfer duty and land tax are State taxes, administered by the Queensland Revenue Office (QRO). Capital gains tax is federal, administered by the Australian Taxation Office (ATO). For each, the guide sets out what the office's own published pages say about three ways of holding a fraction: a share recorded on the title, units in a trust that owns the land, and shares in a company that owns the land. It then looks at what the ATO says about disposing of crypto assets, since a fraction is now sometimes recorded as a token.

It is a description of published rules, with one worked example that is illustrative only. It is not tax advice, and the QRO pages themselves point to exemptions and special cases that depend on the facts.

Sources: Queensland Revenue Office pages on landholder duty and on land tax for companies and trusts.

The legal form comes before the tax

None of the QRO pages read for this guide uses the word token. They speak of dutiable property, of trust interests and of interests in landholders. The ATO, for its part, has one body of guidance for shares and units and another for crypto assets. So the first job with any fractional arrangement is to find out what the fraction is in law.

There are three common answers. The buyer's name goes on the title as a co-owner of the lot. Or the land is owned by a trustee, and the buyer holds units that give a percentage entitlement in the trust. Or the land is owned by a company, and the buyer holds shares in it. A digital token is a way of recording one of these, or of recording an interest in a scheme that sits on top of one of them. The Australian Securities and Investments Commission, in the worked example on tokenised real estate in its Information Sheet 225, describes a company holding apartment buildings as nominee while investors hold tokens, and concludes that such a token is likely to be an interest in a managed investment scheme.

That example is useful here for one reason. The property in it is owned by a company. The investors are not on the title. For Queensland tax purposes, the owner of the land and the people with an economic share in it are then different persons, and the State's taxes attach to each differently.

The duty scale every route starts from

Queensland charges transfer duty on a sliding scale applied to the dutiable value of a transaction. The QRO's rates page, last updated on 25 June 2026, sets it out as follows.

The same page works one case through. A house bought for $850,000 attracts $31,275 in duty: the $17,325 base for that bracket, plus $13,950, which is $4.50 for every $100 of the $310,000 above $540,000.

The scale is progressive, and that shapes everything that follows. The amount of duty depends on the dutiable value the scale is applied to, so the central question for each way of holding a fraction is what the QRO treats as the dutiable value, and of which transaction.

A share recorded on the title

The oldest way to own part of a property is to be a registered co-owner of it. When several buyers purchase a house together and all go onto the title, the rates page example above is the model: the scale is applied to the dutiable value of the purchase.

The direct route differs from the other two in its record. The co-owner's name and interest are in the State's register, and the acquisition is a transfer of land, the kind of transaction the scale was written for. There is no trust deed or company constitution standing between the owner and the lot.

The QRO pages read for this guide do not give a separate worked example for a later sale of one co-owner's share to a newcomer, and this guide does not supply one from elsewhere. The pages on trusts and landholders, by contrast, are detailed, and they are where most fractional and tokenised structures end up, because those structures usually keep investors off the title.

Units in a trust that owns the land

The QRO's page on trust interests, acquisitions and surrenders, last updated on 16 January 2026, treats a change in who benefits from a trust as a dutiable event in its own right, even though the trustee's name on the title does not change.

The page defines a trust interest as a person's percentage entitlement as a beneficiary. Units in a unit trust count. A trust acquisition happens when a person obtains a trust interest, for instance by buying units or increasing an existing holding. A trust surrender is the reverse: a beneficiary gives up an interest, which increases the interests of those who remain. For a discretionary trust, the page says, only the takers in default of an appointment by the trustee have a trust interest.

Transfer duty applies to both acquisitions and surrenders, and it is calculated on the dutiable value of the interest acquired or surrendered. The page gives that value as the higher of two figures:

• the consideration paid for the trust interest; or
• the percentage of the trust interest applied to the unencumbered value of the Queensland dutiable property the trust holds, indirect interests included.

The office illustrates this with a land unit trust. The trust holds land valued at $1,000,000 and has 10 units. A beneficiary sells 2 units, a 20% interest, for $150,000. Twenty per cent of $1,000,000 is $200,000, which is higher than the price, so $200,000 is the dutiable value.

Two things follow for a fraction held as units. First, a discounted price does not reduce the value duty is worked out on, because the test takes the higher figure. Second, the test looks at unencumbered value, the value of the property without regard to debt. A unit in a trust that has borrowed heavily against its property may trade for well under its percentage of the property's unencumbered value, and the page's formula uses the latter when it is the higher.

The page names Form D2.2, the dutiable transaction statement, as the form for these transactions, and lists the supporting documents for a unit trust: the unit transfer forms, details of the unit holders, a certified statement of the trust's assets and a copy of the trust deed. It notes that exemptions may apply to acquisitions or surrenders in family trusts and superannuation funds, and it places the rules in sections 49 to 84 of the Duties Act 2001. The page as read does not deal separately with listed or widely held unit trusts, so this guide says nothing about them beyond the landholder rules below.

Shares in a company that owns the land

Buying shares in a company is not a transfer of the company's land. Queensland's answer is landholder duty, which looks through certain entities to the land they hold.

The QRO defines a landholder as a corporation or listed unit trust that has land-holdings in Queensland with an unencumbered value of $2 million or more, citing section 165 of the Duties Act 2001. An unlisted corporation is a private landholder. A listed corporation or listed unit trust is a public landholder. Land-holdings are defined broadly: interests in land, fixed structures such as plant and equipment, interests under agreements to buy or sell, the land-holdings of subsidiaries, and land held on trust where the landholder is a beneficiary.

Duty is triggered by what the office calls a relevant acquisition. A person makes one by acquiring a significant interest in a landholder, or an interest that amounts to a significant interest when combined with interests held by that person or by related persons. The thresholds are set out on the QRO's relevant acquisitions page:

• 50% or more for a private landholder;
• 90% or more for a public landholder.

The aggregation rule is illustrated with a married couple. A husband and wife each acquire a 30% interest in a private landholder. As related persons they hold 60% together, which is a relevant acquisition even though neither holds half alone.

Someone who makes a relevant acquisition must lodge a landholder duty statement, Form D3.3, within 30 days. How the duty is then worked out is the subject of a separate QRO page that was not read for this guide, so no rate is given here.

On the published definition, two features stand out for fractional property. A company whose only Queensland land is a single apartment with an unencumbered value under $2 million is below the landholder mark. And a small shareholding in a larger private landholder does not by itself reach the 50% line, unless the buyer's interest is combined with those of related persons. This guide draws no conclusion from either point about any particular structure, since the definitions of related persons and of land-holdings are wide and other provisions of the Duties Act may apply.

A worked example: five units in one apartment

The figures below are illustrative. They are not market data and not a prediction of what any buyer would pay. They use only the rates and formulas quoted above, and they ignore exemptions, concessions and any provision not described on the QRO pages read.

The assumptions: a unit trust holds one apartment in Queensland and nothing else. The apartment's unencumbered value is $800,000. The trust has 100 units. A buyer acquires 5 units, a 5% trust interest, from an existing holder for $38,000.

Now suppose the buyer sells the same 5 units three years later for $45,000. For the incoming holder that sale is another trust acquisition, tested in the same way. For the seller, the question shifts to the ATO. Taking the cost base as the $38,000 purchase price alone for simplicity, the proceeds exceed it by $7,000. What belongs in a cost base beyond the price, and what reduces the resulting gain, is governed by the ATO's capital gains rules, discussed below.

The example shows the mechanics and nothing more. A different trust, a different debt level or a different class of buyer changes each line.

Land tax goes to the owner, not the fraction holder

Land tax is an annual tax on owning land, and the QRO has a separate scale for companies and trustees. Its page for them says liability is assessed at midnight on 30 June each year on the taxable value of the land owned.

Companies and trustees pay once the taxable value of their land reaches $350,000. From there the scale, as published, runs in steps. Between $350,000 and $2,249,999 the tax is $1,450 plus 1.7 cents for each dollar over $350,000. Between $2,250,000 and $4,999,999 it is $33,750 plus 1.5 cents for each dollar over $2,250,000. Between $5,000,000 and $9,999,999 it is $75,000 plus 2.25 cents for each dollar over $5,000,000, and from $10,000,000 it is $187,500 plus 2.75 cents for each dollar over $10,000,000.

Three points matter for fractional ownership. The taxpayer is the company or trustee that owns the land. A unit holder or shareholder does not receive the assessment; the cost reaches them through the entity's accounts, as a lower distribution or a lower unit value.

The second point is that the scale is applied to the taxable value of land, which is a figure about the land rather than about the building on it or the price of the units. A trust holding one apartment and a trust holding a house on a large block can have very different land values behind similar market prices.

The third point concerns structures with more than one property. The QRO page says land held by different trusts is assessed separately, unless trust aggregation applies, which it describes as the case of the same beneficiaries holding identical interests across more than one trust. A sponsor that puts each property in its own trust, with the same unit holders in the same proportions in each, is the pattern that description points to.

Foreign owners: two surcharges

A separate guide in this magazine deals with foreign buyers of Queensland homes, so the point is made briefly here. The QRO's transfer duty rates page says additional duty of 8% applies to acquisitions of residential land by foreign persons, and it names corporations and trusts among them. The land tax page for companies and trusts records a 3% surcharge for foreign companies and trusts, tied to the same $350,000 mark of taxable land value. For a fractional structure, the practical consequence is that the foreign status of the entity or of those behind it is a question the State asks, and one the issuer's documents should answer.

Capital gains on units and on tokens

When a fraction is sold, the federal tax is capital gains tax. The ATO's section on shares and similar investments, last updated on 21 June 2026, covers shares and units in unit trusts together. It describes its subject as what can trigger a capital gains tax event, such as selling shares or receiving certain distributions, and it has a dedicated page on trust non-assessable payments, known as CGT event E4, which opens by noting that unit trusts often make non-assessable payments to unit holders. For the holder of units in a property trust, that is a flag: some distributions affect the capital gains position of the units well before any sale.

For a fraction recorded as a token, the ATO's page on working out and reporting capital gains tax on crypto, last updated on 22 June 2026, applies where the token is a crypto asset held as an investment. Such assets are capital gains tax assets. The page lists the events that count as a disposal:

• selling a crypto asset;
• gifting it;
• trading, exchanging or swapping one crypto asset for another;
• converting it to Australian or foreign currency;
• using it to buy goods or services.

A capital gain arises, on that page, when the proceeds of disposal exceed the asset's cost base. Values are converted to Australian dollars at the time of each transaction, and each crypto asset is treated as a separate asset. Capital losses reduce capital gains, but a net capital loss cannot be deducted from other income. The page says a holder may be able to reduce a gain using the capital gains tax discount if the asset was held for at least 12 months, without setting out the detail there. Both ATO pages read for this guide carry June 2026 dates, and the current pages are the ones to read for the terms of any discount.

The list of disposal events matters for tokenised property in a way it does not for units. Swapping a property token for a different token is a disposal on the ATO's list, even though no dollars change hands. So is using a token to pay for something. A unit holder who simply holds units until sale has fewer events to track than a token holder who moves between tokens.

What the paperwork has to show

Read together, the two offices' pages ask a fractional owner to be able to produce a small set of facts. None of this replaces advice from a registered tax agent or a solicitor on a particular holding.

1. The legal form of the fraction: a registered share of the lot, units in a trust, shares in a company, or a token and what the token records.
2. The percentage held, and the unencumbered value of the Queensland property behind it at the date of acquisition, because the trust formula uses both.
3. The interests held by related persons in the same entity, because landholder duty adds them together.
4. Which statement was lodged with the QRO and by whom: Form D2.2 for a trust interest, Form D3.3 within 30 days for a relevant acquisition in a landholder.
5. The land tax position of the owning entity at 30 June, including whether its land is assessed alone or with that of other trusts.
6. For each acquisition and disposal, the date and the value in Australian dollars, which is what the ATO's capital gains working starts from.

A fraction has no tax treatment of its own. It takes the treatment of the share, unit or token that records it, and of the entity whose name is on the title.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

About Kooky and Shaka →