The commercial and industrial property tax (CIPT) reform commenced on 1 July 2024. However, commercial and industrial properties do not automatically enter the CIPT reform from 1 July 2024.
A commercial or industrial property will enter the CIPT reform if it is the subject of an entry transaction, entry consolidation or entry subdivision.
Entry transactions
Commercial and industrial properties will usually enter the CIPT reform via an entry transaction. An entry transaction is a transaction of a property that meets all of the following requirements:
- the transaction happens on or after 1 July 2024
- the transaction occurred pursuant to an agreement or arrangement entered into on or after 1 July 2024
- the transaction is a qualifying dutiable transaction or a qualifying landholder transaction
- the property has a qualifying use on the date of the transaction, and
- the transaction relates to a qualifying interest (of 50% or more) in the property, either of itself or when aggregated with certain other interests.
Not every transaction of a property is an entry transaction. For example, a transaction that is exempt from duty is not an entry transaction.
What is a qualifying dutiable transaction?
A qualifying dutiable transaction includes most forms of dutiable transactions, such as a transfer of a property. Dutiable transactions that will not be a qualifying dutiable transaction include:
- a dutiable transaction that is eligible for an exemption from duty / has no duty chargeable
- a dutiable transaction that is eligible for the corporate reconstruction or corporate consolidation concession
- the grant, transfer or assignment of a dutiable lease
- the acquisition of an economic entitlement
- a transaction involving fixtures that are owned separately to the underlying property.
What is a qualifying landholder transaction?
A qualifying landholder transaction is a relevant acquisition in a landholder other than:
- a relevant acquisition that is eligible for an exemption from duty / has no duty chargeable
- a relevant acquisition that is eligible for the corporate reconstruction or corporate consolidation concession
- a acquisition in a landholder that only holds fixtures or dutiable leases over property
- an acquisition of an economic entitlement in a private landholder
- an acquisition of control over a private landholder
- the conversion of a private unit trust scheme, wholesale unit trust scheme or private company.
Example 1 – Deceased estate
On 1 December 2024, the legal personal representative of a deceased person transfers a commercial property to a beneficiary of the estate in accordance with the terms of the deceased’s will. The transfer of the property is a dutiable transaction however it is exempt from land transfer duty under the exemption for deceased estates.
As the dutiable transaction is exempt from duty, the transfer will not cause the commercial property to enter the CIPT reform.
What is a qualifying interest in property?
A qualifying dutiable transaction or qualifying landholder transaction must relate to an interest of 50% or more in the property.
A qualifying dutiable transaction or qualifying landholder transaction may:
- of itself relate to an interest of 50% or more in the property; or
- amount to an interest of 50% or more in the property when aggregated with other interests in the property in certain circumstances.
There is a special formula to calculate the interest in a property that is taken to have been acquired under a qualifying landholder transaction. This formula is relevant to determine whether the interest taken to be acquired is a qualifying interest (of 50% or more) in the property.
The formula is:
A × B where:
- A is the interest acquired in the landholder under the qualifying landholder transaction on which duty is chargeable under Part 2 of Chapter 3 of the Duties Act. If a relevant acquisition that is the qualifying landholder transaction results from the aggregation of interests acquired by a person, associated persons and/or other persons in an associated transaction, then variable A will reflect all the interests acquired by those persons on which duty is chargeable on the relevant acquisition under Part 2 of Chapter 3 of the Duties Act.
- B is the interest the landholder holds in the land at the time the relevant acquisition is made. This interest is to be determined in accordance with Part 2 of Chapter 3 of the Duties Act.
One effect of this formula, in combination with the requirement that an entry transaction must relate to an interest of 50% or more in a property, is that duty must be chargeable on 50% or more interest in the relevant property under a qualifying landholder transaction (or qualifying landholder transactions that are aggregated).
Example 2
A landholder that is a private company holds a 100% interest in an industrial property that has a qualifying use.
On 15 January 2025, Miguel acquires a 10% interest in the landholder.
On 15 January 2035, Miguel acquires another 40% interest in the landholder.
Miguel’s acquisition on 15 January 2035 is a relevant acquisition as Miguel has acquired a significant interest of 50% in the private company. However, landholder duty is only chargeable on the 40% interest acquired by Miguel on 15 January 2035. Duty is not charged on the 10% interest acquired on 15 January 2025 (despite it comprising part of the relevant acquisition).
Miguel’s relevant acquisition is a qualifying landholder transaction but is not an entry transaction. This is because the interest in the property that is taken to have been acquired under the qualifying landholder transaction is 40% and therefore not a qualifying interest of 50% or more. The 40% interest is calculated using the formula A × B where:
- A = 40%. The 10% interest acquired on 15 January 2025 is not counted for this purpose as duty was not charged on this interest.
- B = 100%.
This example illustrates that the interest acquired in a landholder for determining whether a person has made a relevant acquisition (50%) may be different to the interest taken to be acquired in a property for the purpose of determining whether the property enters the CIPT reform (40%).
Example 3
A landholder that is a private company holds a 50% interest in a property.
On 12 January 2023, Jesse acquired a 25% interest in the landholder.
On 12 August 2025, Jesse acquired another 25% interest in the landholder.
Jesse’s acquisition on 12 August 2025 is a relevant acquisition as it amounts to a significant interest of 505 in the landholder when aggregated with the interest acquired on 12 January 2023. Jesse subsequently pays landholder duty on the relevant acquisition.
Jesse’s relevant acquisition is a qualifying landholder transaction. However, it is not an entry transaction as the interest in the property taken to be acquired for CIPT is 25% (i.e. 50% × 50%) and therefore not a qualifying interest of 50% or more.
Can separate interests in the same property be aggregated?
In certain circumstances, separate interests in the same property acquired under 2 or more qualifying dutiable transactions must be aggregated together to determine if the aggregated interest amounts to a qualifying interest of 50% or more. Similar aggregation rules apply for interests taken to be acquired under 2 or more qualifying landholder transactions.
Separate interests in a property acquired under 2or more qualifying dutiable transactions must be aggregated if:
- the dutiable transactions would be aggregated under section 24 of the Duties Act; or
- the dutiable transactions occur within 3 years and either:
- the transferee under each dutiable transaction is the same person, or
- the transferees under the dutiable transactions are associated persons.
Associated persons include, among other things: relatives; related bodies corporates; trustees of different trusts that have a common beneficiary; and persons who are associated persons of the same person. However, these persons will not be associated persons (and their interests disaggregated) if the Commissioner is satisfied that the interests of the persons:
- were acquired, and will be used, independently; and
- were not acquired, and will not be used, for a common purpose.
This disaggregation does not apply if the persons are associated persons because they are related bodies corporate.
Example 4
Sam owns a factory that has a qualifying use.
On 1 December 2024, Jack acquires a 25% interest in the factory from Sam (Transaction A). On 1 July 2026, Renee acquires a separate 25% interest in the factory from Sam (Transaction B).
Jack and Renee are siblings and hence associated persons. Jack and Renee’s interests in the property are aggregated and together amount to a qualifying interest (i.e. a 50% interest). Therefore, Transaction B is an entry transaction that will cause the factory to enter the CIPT reform.
Example 5
A landholder that is a private unit trust holds a 100% interest in a warehouse with a qualifying use.
On 15 December 2024, Kwame makes a relevant acquisition of a 25% interest in the landholder under a qualifying landholder transaction (Acquisition A). Kwame is taken to have acquired a 25% interest in the warehouse under the relevant acquisition.
On 1 December 2027, Jamal makes a relevant acquisition of a 30% interest in the same landholder (Acquisition B). Jamal is taken to have acquired a 30% interest in the warehouse under the relevant acquisition.
Kwame and Jamal are brothers and therefore associated persons. Kwame and Jamal’s interests in the warehouse are aggregated together and amount to a qualifying interest (a 55% interest).
Therefore, Acquisition B will be an entry transaction that will cause the warehouse to enter into the CIPT reform.
Agreement or arrangement entered into on or after 1 July 2024
A dutiable transaction or relevant acquisition will not be an entry transaction if it occurred pursuant to an agreement or ‘arrangement’ entered before 1 July 2024.
An ‘arrangement’ in this context means a concerted action or plan by the relevant parties to undertake specific actions under which the dutiable transaction or relevant acquisition will be made. While an executed binding agreement is not required to show that there is a concerted action or plan between the parties, the intended actions must be captured in writing, sufficiently certain and envisage the dutiable transaction/relevant acquisition to qualify as an arrangement. In this context, an arrangement is not considered to include a pre-exemptive right such as a right of first refusal.
Example 6
A commercial property in Victoria is transferred from vendor to purchaser on 1 December 2024. This is a dutiable transaction. The transfer of the property was made pursuant to a contract of sale dated 1 May 2024. As the dutiable transaction occurred pursuant to an agreement that was entered into before 1 July 2024, it is not an entry transaction.
Example 7
Rowan is the owner of a commercial property in Victoria. On 1 July 2023, Rowan granted an option to Mei Ling to purchase the property. The terms of the contract of sale were settled at the time the option was granted, including the sale price. On 1 December 2024, Mei Ling exercises the option and enters into a contract of sale to purchase the property.
The settlement of the contract of sale occurred on 20 March 2025 when Rowan transferred the property to Mei Ling. The transfer of the property is a dutiable transaction.
As the dutiable transaction was made pursuant to an arrangement entered into before 1 July 2024, it is not an entry transaction.
Example 8
Isaac owns 100% of the shares in ABC Pty Ltd, a company that holds commercial property in Victoria with an unencumbered value of $5 million. On 1 January 2024, Isaac and Anna enter into a non-binding Heads of Agreement outlining the key terms of a proposed transfer of 100% of the shares from Isaac to Anna including the relevant parties, property, proposed purchase price and target completion date.
Anna makes a relevant acquisition when Isaac transfers the shares to her on 1 December 2024. The Heads of Agreement between Isaac and Anna will qualify as an arrangement entered into before 1 July 2024 because the document provides sufficient certainty of the terms of the proposed transfer of shares.
Example 9
Aisha acquires a 20% interest in a landholder that is a private company on 1 January 2023. On 1 August 2025, Aisha acquires another 30% interest in the landholder under an agreement or arrangement entered into on or after 1 July 2024.
The acquisition on 1 August 2025 is a relevant acquisition as it amounts to a significant interest in the landholder when aggregated with the interest acquired on 1 January 2023. Landholder duty is payable with reference to the 50% aggregated interest acquired.
The relevant acquisition will amount to a qualifying landholder transaction because the acquisition of the interest which resulted in the relevant acquisition occurred on 1 August 2025 and was made under an agreement or arrangement entered into after 1 July 2024. It does not matter that the initial 20% interest was acquired prior to 1 July 2024.
Example 10
Damian acquires a 20% interest in a landholder that is a private unit trust on 1 January 2023 (Acquisition 1). This is a relevant acquisition and Damian pays duty on the acquisition of the 20% interest in the landholder.
On 1 August 2025, Damian acquires a further 30% interest in the landholder (Acquisition 2). The acquisition on 1 August 2025 is also a relevant acquisition and duty is payable.
However, Acquisition 1 is not a qualifying landholder transaction because it occurred prior to 1 July 2024 and was a relevant acquisition in its own right. Duty was paid on Acquisition 1 with reference to the 20% interest acquired. Accordingly, it cannot be aggregated with Acquisition 2 when determining whether Acquisition 2 amounts to a qualifying interest in the property and an entry transaction for CIPT.
Example 11
A 20% interest in property with a qualifying use was transferred to Family Company Pty Ltd on 22 January 2023 (Transfer 1). Family Company Pty Ltd paid duty on the transfer.
On 28 November 2026, a further 30% interest in the same property was transferred to Family Company Pty Ltd under an arrangement entered into after 1 July 2024 (Transfer 2). The transfer of the property is a dutiable transaction. Family Company Pty Ltd paid duty on this transfer.
Transfer 1 is not a qualifying dutiable transaction because it occurred prior to 1 July 2024.
Transfer 2 is a qualifying dutiable transaction because it occurred on or after 1 July 2024 under an arrangement entered into on or after 1 July 2024. However, Transfer 2 is not an entry transaction because it:
• does not of itself relate to a 50% or more interest in the property; and
• does not amount to a 50% or more interest in the property when aggregated with other interests obtained under another relevant qualifying dutiable transaction. The interests in the property obtained under Transfer 1 and 2 cannot be aggregated together because Transfer 1 is not a qualifying dutiable transaction.
Entry consolidations
A consolidation of 2 or more properties into one property will not, of itself, cause the consolidated property to enter the CIPT reform.
A consolidation of 2 or more properties into one property will cause the consolidated property to enter the CIPT reform if:
- one or more of the properties that is being consolidated is already in the CIPT reform (e.g. it entered via an earlier entry transaction); and
- 50% or more of the area of the property that is being consolidated was already in the CIPT reform.
This type of consolidation is known as entry consolidation. A consolidated property that enters the CIPT reform via an entry consolidation is taken to have entered the CIPT reform on the earliest date on which a property that formed part of the consolidation entered the CIPT reform.
If a property that is in the CIPT reform is consolidated with a larger property that is not in the CIPT reform, then the consolidated property will not enter the CIPT reform. The property that was in the CIPT reform prior to the consolidation is also taken to no longer be in the CIPT reform.
A consolidation of 2 or more properties that are not in the CIPT reform will not cause the consolidated property to enter the CIPT reform.
Example 12
On 1 July 2025, four properties of the same size/area are consolidated. Three of the properties had previously entered the CIPT reform under entry transactions - one property entered on 1 January 2025, another on 1 December 2025 and the third on 1 February 2026.
The consolidation of the four properties is an entry transaction because 75% of the area of the properties being consolidated was already in the CIPT reform prior to the consolidation. The entry date for the consolidated property is 1 January 2025. This is the earliest date on which a property that formed part of the consolidation entered the CIPT reform.
Entry subdivision
A subdivision of a property that is already in the CIPT reform is known as an entry subdivision. An entry subdivision will result in in each lot created by the subdivision (a child lot) entering the CIPT reform on the date on which the property that was subdivided entered the CIPT reform.
A subdivision of a property that is not in the CIPT reform will not result in the subdivided property (its child lots) entering into the CIPT reform.
There are special rules if one plan of subdivision is registered in relation to 2 or more different properties on separate titles (i.e. parent lots). These rules are most relevant if one or more of the parent lots is already in the CIPT reform. The rules deem the parent lots to be consolidated on the date when the plan of subdivision is registered. The deemed consolidation may then be an entry consolidation if 50% or more of the area of the parent lots was already in the CIPT reform before the subdivision. If that is the case, the subdivision will be an entry subdivision and the new child lots will enter the CIPT reform via an entry subdivision. The new child lots will be taken to have entered the CIPT reform on the date on which the first parent lot entered the CIPT reform.
The Duties Act includes deeming principles that are relevant if a property in the CIPT reform is subdivided into child lots, and the child lots are transacted. These deeming principles enable the duty exemptions and exclusions to apply to a dutiable transaction involving a child lot by translating certain characteristics from the parent lot to each child lot.
Learn more about the CIPT exemptions including these deeming principles.
Example 13
A property entered the CIPT reform via an entry transaction on 1 November 2025. The property is subdivided into 4 lots (the child lots) on 1 February 2027. This is an entry transaction, and each child lot enters the CIPT reform. The entry date for each child lot is 1 November 2025.
