Commercial and industrial property tax reform

The CIPT reform commenced on 1 July 2024 and is outlined in the Commercial and Industrial Property Tax Reform Act 2024 (the Act). Related CIPT provisions appear in several other Acts, including the Duties Act 2000 (the Duties Act) and the Taxation Administration Act 1997.

How does the CIPT reform work?

Eligible properties

The CIPT reform applies to properties with a ‘qualifying use’, such as a commercial or industrial use. The qualifying use of a property is usually (but not always) determined by reference to the Australian Valuation Property Classification Code (AVPCC) allocated to the property in its latest valuation by the Valuer-General of Victoria (VGV) or a valuer appointed by the VGV.

Learn more about when a property will have a qualifying use.

Entry into the CIPT reform

A commercial and industrial property does not automatically enter the CIPT reform. Rather, it will enter the CIPT reform if it has a qualifying use and is transacted under a specific type of dutiable transaction or relevant acquisition in a landholder on or after 1 July 2024. These specific transactions are known as entry transactions. Not every transaction is an entry transaction. For example, a transaction that is exempt from duty is not an entry transaction. 

Learn more about how a property enters the CIPT reform, including entry transactions and their transitional arrangements.  

Land transfer (stamp) duty is still payable on an entry transaction, but concessions can apply, such as a 50% duty concession for eligible commercial and industrial property in regional Victoria. 

Transition period

Once a property enters the CIPT reform, it will begin a 10-year transition period to CIPT (the new annual property tax). CIPT is not payable during this 10-year transition period. Rather, it becomes payable in the first year after the 10-year transition period has ended.

Transactions involving properties in the CIPT reform

Once a property enters the CIPT reform, a dutiable transaction involving the property may be exempt from duty if the property continues to have a qualifying use and certain other requirements are satisfied. 

There are different requirements for standard transactions, non-standard transactions, relevant acquisitions in landholders and entry transactions that involved a partial interest in property (an interest of less than 100%). 

Learn more about these duty exemptions and exclusions, including the duty exemptions for non-standard transactions.

CIPT

CIPT is an annual property tax that begins 10 years after a property enters the CIPT reform. Like land tax, CIPT operates on a calendar, not financial, year basis. The earliest CIPT assessment year is 2035. 

CIPT will generally apply at a flat rate of 1% of the property’s site (unimproved) value each year provided the property continues to have a qualifying use.  A reduced rate of 0.5% applies to build to rent properties. 

CIPT is different to land tax.  Accordingly, once a property has completed its 10-year transition to CIPT, a landowner may have to pay both CIPT and land tax. However, a property that is exempt for land tax purposes will generally also be exempt for CIPT.

Learn more about CIPT.

Transition loan program

The CIPT reform provides eligible purchasers with the option of accessing a government transition loan for duty payable on an entry transaction.

The government transition loans are provided by the Treasury Corporation of Victoria on commercial terms, including a fixed market-based interest rate. Annual repayments over 10 years will be set upfront to provide applicants with certainty and the loan will be secured by a first ranking statutory charge on the applicable land.

To find out more about the loan’s eligibility criteria and terms and conditions, please visit Treasury Corporation of Victoria’s website, call 1300 659 430 or send an email.

CIPT administration

There are key administrative aspects for customers and the Commissioner of State Revenue under the CIPT reform. Learn more about the administration of CIPT.

We're here to help

If you require more information, contact our Customer Education team for further assistance or book into a CIPT webinar or seminar.