Will I have to pay the commercial and industrial property tax?

Description

Commercial and industrial property tax will not apply in certain circumstances.

Transcript

From 1 July 2024, commercial and industrial property in Victoria is moving from land transfer duty, otherwise known as stamp duty, and landholder duty, to an annual tax – the commercial and industrial property tax.

Commercial and industrial properties will only 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’.

Transactions or acquisitions under a contract or arrangement entered into before 1 July 2024 are not affected by the transition. The reform will also not apply to transfers of commercial or industrial property that receive an exemption from stamp duty or landholder duty, for example, due to being a transfer from a deceased estate or a change of trustee from a trust.

Nor does it apply to properties that aren’t used for commercial or industrial purposes, such as properties used for residential occupation primary production like farms, community services, sport, or heritage and cultural purposes.

Once a commercial or industrial property does enter the CIPT reform, it will commence a 10-year transition period to a new annual property tax, known as the CIPT. After that 10-year transition period elapses, the property will become CIPT taxable land if it continues to have a qualifying commercial or industrial use. CIPT will begin to apply to the land at a flat rate of 1% of the land's site value each year.

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 generally be exempt from CIPT.

For more information about the commercial and industrial property tax and what it means for you, visit our website: sro.vic.gov.au/cipt