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Queensland 2024-25 Budget
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  • 8 minute read
  • June 17, 2024

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The 2024-25 Queensland State Budget focuses on cost-of-living relief, partly funded by increases in the rate of the existing foreign land tax and foreign stamp duty surcharges.

17 June 2024

In Brief

The 2024-25 Queensland State Budget (the Budget) was delivered on 11 June 2024 by Treasurer Cameron Dick.  Whilst the Budget focuses on cost-of-living relief, it also contains new revenue initiatives in the form of increases to the existing land tax surcharge for foreign companies, trusts and absentees in Queensland (increasing from 2% to 3% from 30 June 2024) and the additional foreign acquirer duty (increasing from 7% to 8% from 1 July 2024). 

In Detail

Budget overview

The Budget centres on cost-of-living relief, with $11.2 billion to be spent on cost-of-living relief measures. This is an increase of 31% when compared to 2023-24. In addition, in response to unexpected and strong population growth, the Government is also looking to boost health, housing and community safety measures. 

While the 2023-24 net operating position of the Government was a reported $564 million surplus (up from a forecasted deficit of $2.2 billion), the Government has noted its prioritization of addressing cost-of-living pressures in the Budget does mean that a deficit of $2.631 billion is forecast for 2024-25.

As temporary cost-of-living relief measures are wound back, the net operating position of the Government is forecast to improve to a deficit of $515 million in 2025-26, a surplus of $0.9 billion in 2026-27 and a surplus of $2 billion in 2027-28.

Revenue Measures

The Budget introduced some new revenue initiatives, with the Revenue and Other Legislation Amendment Bill 2024 being introduced to the QLD Parliament to give effect to some of the below measures.

Land tax surcharge

The Budget provides that starting 30 June 2024, the surcharge rate of land tax for foreign companies, trustees of foreign trusts, and absentees in Queensland will increase from 2% to 3%. Whilst this is a significant increase, it is still below the rate of surcharge land tax in Victoria and New South Wales (noting that New South Wales only imposes land tax surcharge on residential land).  

Ex gratia relief from the land tax surcharge will continue to be offered to Australian-based foreign entities that significantly contribute to the Queensland economy and community through their commercial activities, provided they meet the eligibility criteria.

Additional foreign acquirer duty

The Budget provides that from 1 July 2024 the additional foreign acquirer duty (AFAD), imposed on foreign owners directly and indirectly purchasing residential property in Queensland, will increase from 7% to 8%. This brings Queensland’s surcharge in line with the surcharge rate imposed on acquisitions of residential land by foreign owners in Victoria and New South Wales. This will apply to any relevant liability triggered on or after 1 July 2024, even if it arises pursuant to an arrangement entered into before this date. Practically, this means that where an agreement is signed on or before 30 June 2024, the agreement and subsequent transfer of land or shares should be subject to the 7% rate. However, an agreement entered into on or after 1 July 2024 should be subject to the 8% rate, even if it is made pursuant to an option entered into before 30 June 2024.

Ex gratia relief from AFAD will continue to be offered to Australian-based foreign entities that significantly contribute to the development of housing stock in Queensland, provided they meet the eligibility criteria.

Transfer duty concessions for first home buyers

The Budget introduces support for first home buyers by raising eligibility thresholds for two key transfer duty concessions: The Budget introduces support for first home buyers by raising eligibility thresholds for two key transfer duty concessions:

  • First Home Concession: Eligibility extends to homes valued up to $800,000 (increased from $550,000). No duty is payable on homes up to $700,000 (increased from $500,000), with partial concessions for homes between $700,000 and $800,000.  
  • First Home Vacant Land Concession: Eligibility extends to vacant land valued up to $500,000 (increased from $400,000). No duty is payable on land up to $350,000 (increased from $250,000) if the home is occupied within two years, with partial concessions for land between $350,000 and $500,000. 

These changes are estimated by the Qld Government to provide an additional $360 million in tax relief over four years, benefiting around 10,000 first home buyers annually. The new thresholds apply from the announcement date of 9 June 2024, effective upon legislative amendments receiving royal assent. 

Payroll tax

The Budget announces an extension of the 50 per cent payroll tax rebate for wages paid to apprentices and trainees for another 12 months, until 30 June 2025. This rebate offers extra support to businesses that promote youth employment and hire trainees and apprentices.

Furthermore, starting from 1 July 2024, very large businesses will be excluded from the eligibility criteria for the 1% regional discount in payroll tax rate. Consequently, businesses with annual Queensland taxable wages exceeding $350 million will not qualify for the discount. 

Motor vehicles

The Government has paused the indexation of the registration fee and traffic improvement fee components of vehicle registration from 1 July 2024. In addition, motor vehicle registration for all light vehicles for 12 months will have a reduction of 20% in the registration fee and traffic improvement fee component of registration.

Public transport

The Government has paused the public transport fare increase in 2024 and introduced a temporary fare reduction (to a flat fare of 50 cents per trip) across the state for six months starting from 5 August 2024. Additionally, the government is offering half-price tickets on Airtrain services. 

Trends in taxation and royalty revenue

The Government has forecast a 1.1% decline in General Government Sector revenue in 2024-25 to $88.107 billion. This is noted as being due to recommendations that a smaller share of goods and services tax (GST) revenue be allocated to Queensland as well as an additional $4.366 billion fall in royalties due to anticipated moderation in coal and oil prices (towards more consistent medium-term expectations). However, it is expected for this to be offset partially by forecast $2.129 billion increase in taxation revenue for 2024-25 as well as $1.556 billion increase in non-GST Australian Government payments. The Government estimates these to be as follows:

  • The total key revenues of taxes, GST and royalties will decline by 5.8% in 2024-25 when compared to 2022-23, and remain flat in 2025-26.
  • Payroll tax revenue is estimated to be approximately 9.7% higher in 2023-24 when compared to 2022-23. The Budget notes this as being driven by Queensland’s strong labour market and an acceleration in annual growth for the December 2023 quarter of Queensland’s Wage Price Index (to 4.8%). It is anticipated that this will further increase by 7.9% in 2024–25, due to ongoing strong labour market conditions, and an average annual growth of around 5.2% is forecast over the three years ending 2027–28. 
  • The 2023-24 year marks the first full year of collection on the mental health levy, which contributed an estimated $494.8 million in revenue for 2023-24 (which is higher than was initially forecast).
  • Transfer duty revenue is estimated to be higher in 2023-24 when compared to 2022-23 by approximately 7%. The Budget attributes this as reflecting the residential housing market strength following late 2022 having a short fall in prices. Off the back of forecast strength in the housing market, increase in housing prices and ongoing recovery in the non-residential sector, transfer duty revenue is forecast for average annual growth of 4.1% until 2027-28.
  • It is expected that land tax revenue will grow by 23% in 2024–25. The Budget attributes strong land value growth as driving this. Over the three years ending 2027-28, land tax revenue is forecast for average annual growth of 9.7%.
  • Vehicle registration duty revenue is anticipated to be 13.2% higher in 2023–24 when compared to 2022–23. The Budget notes a continued strength in vehicle sales and high levels of consumption expenditure as a result of COVID-19 recovery as the drivers behind this growth. It is anticipated that revenue from this will be relatively flat in 2024–25, as a result of activity recalibrating to more sustainable long-term levels and the robust growth from 2023-24. Revenue for the three years ending 2026–27 are forecast for 3% annual growth.
  • It is anticipated that revenue from gambling tax and levy collections will grow by a further 7.2% in 2023–24 and 4.5% in 2024-25. In addition, it is forecast that revenue from these measures will experience an average annual growth of 3.6% over the three years ending 2027–28. The Budget notes these forecasts as incorporating increased revenue as a result of the Queen’s Wharf Brisbane casino opening.
  • The waste disposal levy is forecast to provide 7.2% higher revenue in 2023-24 when compared to 2022-23 for an amount of $423 million in 2023–24. This is anticipated for average annual growth of 4.7% to 2027-28. The Budget notes this as being due to planned increases in levy rates. 
  • Queensland’s GST revenue is expected to be 6.3% higher in 2023–24 when compared to 2022-23, at $1.153 billion. However, it is anticipated that this will then decline by 4.8% ($934 million) in 2024–25, due to the Commonwealth Grants Committee recommending Queensland receive a lower share of the GST pool in 2024-25. This is expected to remain flat for 2025-26, before forecast growth of 10.9% in 2026-27 and 15.8% in 2027-28. The Budget notes this as being driven by an anticipated growth in the national GST pool and moderation in the impact of higher coal royalties.

Royalty revenues and land rents are forecast to decline by $1.2 billion in 2023-24 to $8.599 billion in 2024-25. The elevated coal and oil prices from 2021-22 and 2022-23 (which provided a short-term boost in revenue) have subsided due to a range of factors, including decline in steel demand in China and India and an improvement in supply conditions.

  • In 2023-24 coal royalties are expected to total $10.541 billion, which is 14.7% higher than the 2023-24 Budget forecasts but 31% lower than 2022-23 collections. The higher than expected revenue is due to coal prices not falling as quickly as was anticipated.
  • Petroleum and gas royalties are estimated to decrease by 27.5% on 2022-23 returns (at $1.705 billion), however this is still 3.3% higher than 2023-24 Budget forecasts.
  • It is expected that revenue from other royalties will increase by 4.2% in 2023-24 when compared to 2022–23 and are forecast to grow by 10.1% in 2024-25. The Budget notes this as mainly driven by expected increase in metals prices.
  • Land rents revenue is estimated to be $184 million in 2023-24, which is higher than in 2022-23 by 1.7% but is lower than the 2023-24 Budget forecasts. This is attributed to rent being reduced to $0 for five years from 1 September 2023 for new and existing exploration permits for minerals other than coal, which was an initiative implemented in the Queensland Critical Minerals Strategy released in June 2023.

The Takeaway

The key focus of the Budget was providing cost of living relief to Queenslanders, and to provide additional support to first home buyers in Queensland. To help fund this, there will be an increase in foreign land tax surcharge from 2% to 3% from 30 June 2024 and an increase in the foreign stamp duty surcharge from 7% to 8% from 1 July 2024.

Contact us

If you would like to further discuss this alert, reach out to our team or your PwC adviser.

Rachael Cullen

Partner, Tax, Sydney, PwC Australia

+61 409 470 495

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Jess Fantin

Partner, PwC Australia

+61 (7) 3257 5501

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Rachael Nyst

Director, Tax, Brisbane, PwC Australia

+61 400 097 224

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