Budget sees transfer duty dip to $8.3 billion while land tax climbs

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Kooky

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The Queensland Budget delivered on Tuesday 23 June changed almost nothing about how property is taxed, and still says a great deal about it. The revenue forecasts, set out in a tax alert published by the accounting firm PwC on 26 June, show the State expecting to collect $8.346 billion in transfer duty in 2026-27, less than the $8.671 billion it estimates for the year now ending. Land tax moves the other way: $3.162 billion in 2026-27, rising to $4.826 billion by 2029-30.

Between them, the two taxes on buying and holding land are forecast to bring in about $11.5 billion next year, close to four dollars in every ten of the State's own tax revenue. The Budget's bet is that fewer or cheaper transactions will cost it a little in the short term, and that rising land values will more than make up for it.

Queensland Budget 2026-27 forecasts, as set out in PwC's tax alert of 26 June 2026.

Transfer duty: a small step back

Transfer duty, still widely called stamp duty, is paid by the buyer on a purchase of land, a home or a business. It is the State's most volatile large tax, because it depends on two things no Treasury controls: how many properties change hands, and at what prices.

On PwC's figures the forecast for 2026-27 is $325 million below the estimated result for 2025-26, a fall of about 3.7 per cent. The summaries read for this article do not give Treasury's reasoning, and a forecast is not a prediction of prices. A lower duty take can come from fewer sales, from a shift towards cheaper properties, from fewer very large commercial deals, or from concessions that reduce what each buyer pays. The figure says only that Treasury does not expect 2025-26 to be repeated.

Further out, the line turns up again. Transfer duty is projected at $10.152 billion in 2029-30, about 22 per cent above the 2026-27 forecast. That is growth of roughly 7 per cent a year across the three years that follow next year's dip.

For a buyer, none of this changes the bill. The Queensland Revenue Office's rates page, updated on 25 June, shows the same scale as before: nothing on the first $5,000, then rising marginal rates to $5.75 for each $100 above $1 million. The office's own example is an $850,000 investment property, on which duty is $31,275. The Budget left that scale alone.

Land tax: the line that keeps rising

Land tax is the steadier of the two. It is charged each year on the land a person or entity owns at midnight on 30 June, on the Valuer-General's land value and not the market price, and a home the owner lives in is generally exempt. It does not depend on anything being sold.

The Budget projects it to grow from $3.162 billion in 2026-27 to $4.826 billion in 2029-30. That is an increase of $1.664 billion, or about 53 per cent, in three years. No change to rates or thresholds was announced to produce it. BDO, in its analysis on Budget day, found no substantive changes to land tax rates or to the foreign surcharge settings.

Growth of that order with unchanged rules can only come from the base: more taxable land, or higher values on the land already taxed. The thresholds are fixed in dollars. The Revenue Office's rates pages put the starting point at $600,000 of taxable land for individuals and $350,000 for companies and trustees. When land values rise and the thresholds do not, more owners cross the line and those already over it move up the scale.

The valuations issued this year show the mechanism at work. The Valuer-General revalued 15 local government areas in March, effective 30 June 2026. Sunshine Coast News reported an overall rise of 24 per cent on the Sunshine Coast and 37 per cent in Noosa, and Ipswich City Council said its land values had risen by more than 50 per cent overall since 2023. The effect on land tax is gradual, because the Revenue Office taxes the lesser of the year's value and an average of three years' values, which is one reason the forecast keeps climbing in the later years.

How much the State leans on property

Total State taxation revenue is forecast at $29.676 billion in 2026-27, up about 4.2 per cent from an estimated $28.474 billion in 2025-26. Of that, transfer duty is about 28 per cent and land tax about 11 per cent. Payroll tax, at $8.593 billion with the mental health levy included, is the only tax that raises more than duty.

Property taxes are a smaller part of the State's whole income, because taxes are not its largest source of money. PwC's summary puts general government revenue at $99.671 billion in 2026-27, with $19.577 billion of that from the GST and $9.692 billion from royalties and land rents. Measured against everything the State receives, duty and land tax together are a little under 12 per cent.

By 2029-30 the mix shifts. Total taxation is projected at $35.966 billion, with duty at $10.152 billion and land tax at $4.826 billion. Duty's share stays at about 28 per cent, while land tax grows from about 11 per cent of tax revenue to more than 13 per cent.

The table makes the direction plain. Over the three years after 2026-27, land tax is expected to grow more than twice as fast as taxation as a whole. The same summary shows why the State wants reliable revenue: net debt is forecast at $51.329 billion in 2026-27 and $98.057 billion by 2029-30.

The few measures that touch property revenue

Against forecasts in the billions, the Budget's property tax decisions are small. The Revenue Office's Budget-day notice lists them, and the firms attach the numbers.

From 1 August 2026, the transfer duty concessions for homes are limited to Australian citizens, permanent residents and specified foreign retirees. PwC reports that this is expected to improve revenue by $28.9 million over four years. Relief from the foreign duty and land tax surcharges for developers is made easier to obtain, at a cost of about $66.2 million in revenue forgone over five years.

The larger number is in administration. BDO reports $60 million of additional funding for compliance and debt recovery over four years, continuing at $15.6 million a year, which the Budget expects to generate an extra $220 million in revenue and a further $612 million in debt recoveries over four years. That funding covers the Revenue Office's work generally and is not confined to property. For owners, though, it means more checking of the things land tax depends on: who owns what, which exemptions have been claimed, and whether they still apply.

What the industry asked for and did not get

The Real Estate Institute of Queensland welcomed the Budget's housing spending and the absence of new taxes. Its chief executive, Antonia Mercorella, told Broker News on 24 June: "we're relieved to see a steady hand on the tiller in Queensland."

The institute's reservation was about duty. Broker News reported it flagging the lack of stamp duty reform as a gap, pointing to an Australian Capital Territory decision to remove duty for all first home buyers from 1 July, and to its own measure of affordability, which puts Queensland's mortgage servicing burden at 53.2 per cent of median family income in the March quarter of 2026, the second highest in the country.

The forecasts explain the State's caution. A tax that raises more than $8 billion a year, and is expected to raise more than $10 billion within four, is not easily replaced. Proposals to swap duty for a broader land tax have been discussed in Australia for years, and the arithmetic in this Budget shows both why reformers like the idea, since land tax is the steadier line, and why treasurers hesitate, since duty is more than two and a half times the size.

What it means for owners and buyers

For buyers, the scale of duty and the home concessions are unchanged for citizens and permanent residents. The cost of the average purchase moves only with prices.

For investors and other owners of land beyond the family home, the message is in the land tax line. Nothing was announced, and the State still expects to collect half as much again within three years. An owner whose land sits below $600,000 in taxable value today is not promised it will stay there, and the three-year averaging slows a revaluation without stopping it.

Land tax for 2026-27 is fixed by what is owned at midnight on 30 June 2026, and assessments follow during the financial year. The duty change for temporary residents begins with transactions entered into from 1 August, and the Revenue Office has said further detail will follow once legislation has passed.

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.

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