If you are a commercial or industry property owner in Victoria, mark your calendars. Starting from 1 July 2024, Victoria is rolling out the new Commercial and Industrial Property Tax (CIPT), impacting how taxes are handled for these properties. Here’s what you need to know:
The Switch
Say goodbye to stamp duty, with the CIPT, stamp duty will be a thing of the past for commercial and industrial property transactions after 1 July 2024. Instead, a new annual CIPT will take its place, payable 10 years after the initial transaction, regardless of future transactions.
Who is Affected?
- Properties initiated in a contract of sale on or after 1 July 2024, with a transaction of 50% or more.
- Properties used for qualifying commercial or industry purposes at settlement.
- Exemptions exist for residential, primary production, and other specific properties.
Transition Ease
Eligible purchasers will have a smooth transition, as you can opt for a government-facilitated transition loan instead of upfront stamp duty payments. This loan allows you to spread out payments over 10 years, making the transition hassle-free.
Stamp Duty Relief
No stamp duty on future transactions within the 10-year transition period if the property stays commercial or industrial. After the transition, no stamp duty applies, and the property becomes liable for the CIPT.
Potential Benefits
This reform aims to boost business investment by removing barriers and fostering economic growth. Estimated to have a $50 billion impact, it’s a win for the Victorian economy.
Whether you’re navigating mixed-use properties or considering transitional loans, there’s more to explore. Stay informed about eligibility, applications, and exemptions to make the most of this transition.
If you have questions or want to discuss how this reform impacts you, don’t hesitate to reach out to our Melbourne-based law firm. Our team of experienced lawyers are here to assist you navigate these changes.
