Land tax is an unavoidable part of owning commercial property, but depending on the nature of your site, you could be paying more than you should.

According to Kollosche Commercial sales agent Adam Grbcic, who is also a qualified valuer, one problematic issue facing unsuspecting Gold Coast property owners is the way land valuations are applied across entire precincts without considering important differences between properties. These land valuations form the basis of land tax calculations and are often applied using a “broad brush” approach.

“For example, you can have two sites of the same size sitting side-by-side on the Gold Coast Highway, both given exactly the same land valuation,” Adam explains. “But one of those sites might be capable of a 12–18-storey building, while the other is significantly constrained due to light-rail infrastructure. If those two owners are paying land tax on the same assessed value, there’s an obvious imbalance.”

For Sale – 92 Jefferson Lane, Palm Beach

This is not a one-off scenario. In many areas of the Gold Coast, councils apply the same land value rate across an entire corridor or precinct regardless of whether sites are encumbered by infrastructure, access limitations or future planning restrictions.

For owners of properties with limited development potential, this can lead to inflated land tax liabilities that ultimately undermine investment performance.

Adam says many commercial owners are unaware that council land valuations can be appealed and, in many cases, successfully adjusted once site constraints are properly accounted for.

“If the assessed land value doesn’t fairly reflect the limitations of your property, it’s worth challenging it,” he says. “We’ve seen owners significantly improve their commercial return simply by appealing their valuation and having it recalculated correctly.”

For Sale – 58A Marine Parade, Southport

While the impact varies across asset classes, retail owners are particularly exposed. Under Queensland’s Retail Shop Leases Act, land tax cannot be passed on to retail tenants in the way it can be for office or industrial tenancies, which means the full cost sits with the property owner.

“That’s what makes it especially important for retail landlords to stay on top of their land valuations,” Adam adds. “If you carry the full cost of land tax, even a small overassessment can erode your return over time.”

Reach out to Team Grbcic for informed guidance on how to get the best from your commercial real estate assets.