This page outlines key administrative aspects of the commercial and industrial property tax (CIPT) reform.
Information and guidance available to you
We can provide information and decisions to help you understand how the CIPT reform may affect a property, transaction or arrangement. This includes property clearance certificates, provisional determinations of whether a property has a qualifying use, and private rulings on the application on legislative matters relating to CIPT.
Property clearance certificates
An owner, purchaser or mortgagee of a property can apply to the Commissioner for a property clearance certificate at any time (for a fee). The certificate provides relevant information on CIPT, land tax (including vacant residential land tax) and windfall gains tax.
For CIPT, the property clearance certificate may disclose:
- the Australian Valuation Property Classification Code (AVPCC) allocated to the property. If there are multiple AVPCCs allocated to the property this fact will be noted on the certificate
- whether the AVPCC indicates that the property has a qualifying use
- whether there is any CIPT (including any interest and penalty tax) due and unpaid on the property
- whether the property is tax reform scheme land (i.e. it has entered the CIPT reform) and, if so:
- the date on which the property became tax reform scheme land (i.e. when it entered the CIPT reform) and when it became, or will become, subject to CIPT (i.e. generally 10 years after the property entered the CIPT reform)
- whether the entry interest in relation to tax reform scheme land was a 100% interest or an interest of less than 100% (i.e. whether the entry transaction for the property involved a 100% or partial interest in the property). An entry interest is relevant for the application of the CIPT duty exemptions to transactions involving properties in the CIPT reform
- whether the Commissioner has been notified that the property has undergone a change of use to a non-qualifying use.
A vendor is also required to disclose additional information relating to CIPT in the statement required under section 32 of the Sale of Land Act 1962.
Private rulings
We can provide the owner or purchaser of a property with a private ruling, on request, to help them understand how the CIPT legislation applies to a specific transaction or arrangement if the legislation is ambiguous. This can include if you are unsure as to whether a transaction is an entry transaction (i.e. a transaction that causes a property to enter into the CIPT reform) or whether a mixed-use property has a qualifying use (i.e. making it eligible to enter the CIPT reform under an entry transaction).
Lear more about private rulings and how to apply for a private ruling.
Entry of properties into the CIPT reform
Provisional determination of qualifying use of land
The Commissioner may provisionally determine that a property has a qualifying use in certain circumstances. This can allow a property to enter the CIPT reform if it is sold without an AVPCC.
The Commissioner can make a provisional determination in any of the following circumstances:
- the property has not been allocated an AVPCC in its latest valuation;
- the property has not been valued by the Valuer-General of Victoria (VGV) or a valuer nominated by the VGV; or
- the property is not Council rateable and not leviable under the Emergency Services and Volunteers Fund Act 2012 (i.e. non-rateable non-leviable land) and more than 12 months have elapsed since the valuation date of its latest valuation.
A taxpayer cannot object to a provisional determination.
Electronic conveyancing of mixed-use property
If a dutiable transaction involves a mixed-use property (i.e. it has qualifying and non-qualifying AVPCCs), the transaction will be treated as a complex Duties Online (DOL) transaction. This is because the Commissioner must determine whether the property is used solely or primarily for a use that is within the qualifying AVPCC range (200-499 or 600-699).
A dutiable transaction will also be a complex DOL transaction if the qualifying use status of the AVPCC stated on the Transferor Statement differs from the SRO’s records. For example, the AVPCC stated in the Transferor Statement is 233 but the SRO’s records have it as 110.
A dutiable transaction will not be treated as a complex DOL transaction if the AVPCC stated on the Transferor Statement differs from the SRO’s records but both are within the prescribed range (e.g. the stated AVPCC is 310 but the SRO’s records show the AVPCC as 320.
After a property enters the CIPT reform
Dutiable transactions
After a property enters the CIPT reform, an exemption from land transfer (stamp) duty or exclusion from landholder duty may apply to a transaction involving the property. You must still lodge a Digital Duties Form or a Landholder Acquisition Statement to receive an exemption or exclusion.
Notification requirement – change of use
A property that has entered the CIPT reform may change use over time. For example, a commercial warehouse that has entered the CIPT reform may later be re-developed into residential apartments.
The owner of a property that has entered the CIPT reform must notify the Commissioner if the property or part of the property undergoes a change of use. This notice must be given to the Commissioner within 30 days after the change of use. The notification requirement applies in a broad range of circumstances.
Failure to notify the Commissioner of a change in use within the prescribed 30-day period may result in penalty tax being payable. Penalty tax is in addition to change of use duty.
Learn more about change of use duty including notification requirements.
Anti-avoidance provisions
The CIPT legislation includes anti-avoidance provisions targeting tax-avoidance schemes that seek to:
- enable a person to obtain a reduction in or an exemption from CIPT
- prevent a property from entering the CIPT reform or becoming subject to CIPT (i.e. CIPT taxable land)
- cause a property to enter the CIPT reform to avoid duty being payable on a subsequent dutiable transaction or subsequent relevant acquisition in a landholder.
If the Commissioner considers that a person has participated in a tax avoidance scheme, the Commissioner may do one or more of the following:
- disregard the scheme
- determine that land is tax reform scheme land or CIPT taxable land
- determine what CIPT would have been payable but for the scheme.
- make an assessment or reassessment under the TAA to give effect to the Commissioner’s determination.
The Commissioner may also aggregate interests in property obtained or taken to have been obtained under one or more dutiable transactions and one or more relevant acquisitions if the Commissioner is satisfied that the transactions and acquisitions formed part of a tax avoidance scheme.
