Australia: Draft legislation to repeal stamp duty on commercial, industrial property and replace with property tax

Victoria introduced a bill that would repeal stamp duty on commercial, industrial property and replace it with commercial and industrial property tax

Draft legislation to repeal stamp duty on commercial, industrial property and replace it

Article Posted date 22 March 2024

The Victorian government on 21 March 2024 introduced the Commercial and Industrial Property Tax Reform Bill 2024 that would repeal stamp duty on commercial and industrial property and replace it with a commercial and industrial property tax (CIPT).

  • The CIPT regime would apply to commercial and industrial property transactions on or after 1 July 2024.
  • For properties entering the CIPT regime, stamp duty would be paid on the transaction, and the new CIPT would be payable 10 years after the final stamp duty payment, regardless of whether that same property has transacted again.
  • Once land has transitioned into the CIPT regime, exemptions from transfer duty and landholder duty would apply to eligible subsequent transactions in respect of the land, if it still has a qualifying use.
  • The CIPT rate is a flat 1% of the property’s unimproved land value, although certain built-to-rent (BTR) property may be eligible for a concessional 0.5% CIPT rate.

Exclusions from the CIPT regime include:

  • Property primarily used for residential purposes
  • Property primarily used for primary production, community services, or sport, heritage or culture purposes
  • Transfers of commercial or industrial property that are exempt from stamp duty (e.g., charities and corporate reconstruction relief)
  • Dutiable leases, economic entitlements, fixtures, and goods transactions

 

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