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Land Tax Recovery For Landlords – Is This Clause In My Lease?

Land tax recovery for landlords – Is this clause in my lease?

Are you a landlord of a commercial property?  It’s a good time to review your lease terms as a recent court decision may allow you to recover land tax for the property from your tenant

Queensland landlords should review their outgoings and land tax recovery clauses in their commercial leases, following the decision in Vikpro Pty Ltd v Wyuna Court Pty Ltd [2016] QCA 225.

What happened in this Court decision?

The Queensland Court of Appeal rejected the tenant’s argument which sought to preserve the prohibition on land tax recovery in section 44A of the 1915 Land Tax Act, even after its repeal.

Landlords’ rights to recover land tax from tenants had been in suspense under section 44A of the 1915 Land Tax Act which made land tax recovery clauses in commercial leases entered into after
1 January 1992 unenforceable.

In 2009, section 44A was repealed to allow recovery of land tax in new commercial leases, but a saving provision was added to preserve its operation for existing leases. The rewrite of the Land Tax Act in 2010 repealed the 1915 Act, including the saving provision. However, the 2010 Act did not expressly say that section 44A continued to apply to existing leases.

The Court of Appeal has now confirmed that tenants lost their immunity from recovery of land tax under existing commercial leases from 30 June 2010.

So what does this decision mean commercial landlords?

This means that, provided the lease allows it, landlords can recover post-30 June 2010 land tax from tenants even though recovery was not lawful at the time the lease was entered into.

The land tax recovery position for different commercial leases will depend on the date of entry into the lease:

Pre 1992 All land tax is recoverable if the terms of the lease allow for it.
1992 to 30 June 2009 Pre-30 June 2010 land tax is not recoverable.

Post-30 June 2010 land tax is recoverable if the terms of the lease allow for it.

Post 1 July 2009 all land tax is recoverable if the terms of the lease allow for it


Each lease category includes any options to renew entered into under those leases.

Landlords will be entitled to recover land tax assessed on or after 30 June 2010 under commercial leases entered into before 1 July 2009 if those leases allow for it.

Landlords with commercial leases entered into between 1 January 1992 and 30 June 2010 should check their lease to ensure they are aware of their rights and obligations.

This is particularly important for long-term leases, including assigned leases and options under those leases. Outgoings and land tax recovery clauses in leases which span the relevant dates (i.e. entered into on or after 1 January 1992 and before 1 July 2009) should also be reviewed.

Be aware that landlords seeking to recover land tax should do so promptly. If a landlord fails to act, they could lose the right to recover land tax if the tenant raises waiver or estoppel arguments based on the delay.

You should note that land tax recovery is still prohibited in:

  • Residential leases; and
  • Retail shop leases regulated by the Retail Shop Leases Act 1994.

About Con Plastiras

Con Plastiras is the Principal of Plastiras Lawyers.  Con helps landlords and tenants with commercial and retail shop leasing.  Jim also assists clients with commercial property sales and acquisitions.

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