Tenants under old commercial leases may now be obliged to pay land tax imposed on or after 30 June 2010.
The Court of Appeal in Vikpro Pty Ltd v Wyuna Court Pty Ltd [2016] QCA 225, affirmed that lessors of existing commercial leases may require lessees to pay land tax or reimburse the lessor for land tax.
In Vikpro, the relevant lease (of 70 years duration) contained a clause that required the lessee 'to pay all rates and taxes'. This clause was invalidated by section 44A of the Land Tax Act 1915 (Qld) (1915 Act). However, the 1915 Act was repealed in 2009 and transitional provisions continued the operation of section 44A. In 2010 a replacement Land Tax Act came into force. The Court decided that the transitional provisions no longer preserved the effect of section 44A of the 1915 Act after its repeal by the 2010 Act.
Ultimately the Vikpro case is significant because it means that lessees under old leases may now be obliged to pay land tax imposed from 30 June 2010 even though they were not liable to pay it before then. However, lessees will only be liable if the relevant lease provides for recovery of land tax.
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