Commercial and industrial property tax

In the 2023–24 State Budget, the Victorian Government announced that land transfer duty on commercial and industrial property will be progressively abolished and replaced with the CIPT. 

The Commercial and Industrial Property Tax Reform Act 2024 (the Act) received Royal Assent in May 2024.

Transferring to the new tax

Prior to CIPT, when you bought or acquired a commercial or industrial property in Victoria you may have paid land transfer duty.

Commercial and industrial properties will transition to the new tax reform scheme if there is an eligible dutiable transaction or relevant acquisition defined in the Act as an ‘entry transaction’ on or after 1 July 2024.

Duty will still apply to entry transactions, but concessions can also apply to this duty payment, such as the 50% concession for purchases of regional commercial and industrial land. 

Certain concessional transactions including those subject to the corporate reconstruction concession will not trigger entry into the tax reform scheme.

Generally speaking, any subsequent transactions involving land that has entered the reform will then be exempt from duty if the property continues to be used for commercial and industrial purposes.

Commercial and industrial land is not impacted by the transition to CIPT until a relevant entry transaction occurs on or after 1 July 2024 to bring the land into the tax reform. 

Transactions or acquisitions under a contract entered into before 1 July 2024 are not affected by the transition.

General anti-avoidance provisions apply under the Act and under the Duties Act 2000 to schemes intended to either avoid entry into the reform or to avoid or minimise duty.

How CIPT will work

From 1 July 2024, commercial and industrial properties will transition to the new scheme as they are sold.

10 years after the initial entry transaction, CIPT will begin to apply to the land at a flat rate of 1% of the land's site value each year. It is payable by the property owner.

CIPT will be assessed on a calendar year basis using the same valuations as land tax. However, CIPT will be charged separately and in addition to any land tax payable for the land. 

Land that is exempt from land tax will also be exempt from CIPT. 

Unpaid CIPT will be a first charge on the land and will remain on the land until it is paid.

There are new exemptions from duty for eligible transactions of commercial or industrial properties that have entered the reform and continue to have a qualifying use. 

Transition loan program

As part of the transition to CIPT, eligible purchasers will have the option of accessing a government transition loan for the duty payment on the entry transaction.

The loan will be provided by the Treasury Corporation of Victoria (TCV) 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.

The Act included amendments to the Treasury Corporation of Victoria Act 1992 to enable TCV to administer the transition loan program. 

To find out more about the loan’s eligibility criteria and terms and conditions, please visit Treasury Corporation of Victoria.

Taxation administration

The Act has become a taxation law under the Taxation Administration Act 1997 (TAA). This means the TAA provides the power to issue assessments, make refunds and offsets, impose penalties and interest for tax defaults, recover unpaid tax, carry out investigations and consider objections in relation to the Act. 

The TAA was also amended to permit the disclosure of protected information to TCV in relation to the transition loan program.

Other changes

The Act made consequential amendments to other Acts to allow the reform to be administered by the State Revenue Office. This included amendments to the Heritage Act 2017, Property Law Act 1958, Retail Leases Act 2003, Sale of Land Act 1962 and Valuation of Land Act 1960 ensure the treatment of CIPT aligns with land tax.

More information

More information will be available on our website shortly. The Department of Treasury and Finance has further information about the reform.

Commercial and industrial property tax reform

Information sheet

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