Property types and how they will transition to the new tax.
Key information
Commercial and industrial property tax (CIPT) is an annual tax on the land value of commercial and industrial properties in Victoria. It applies after a 10-year transition period, which begins with a relevant entry transaction on or after 1 July 2024.
After the 10-year transition period, CIPT will apply to properties with a qualifying use, which is usually identified by their Australian Valuation Property Classification Code in the latest valuation.
Common qualifying uses include:
- retail premises
- offices
- warehouses
- factories
- vacant commercial or industrial land.
Once a property begins the 10-year transition to CIPT, future transactions may be exempt from land transfer (stamp) duty and landholder duty. These exemptions can support businesses that are expanding or relocating.
Learn more about the qualifying use for a property.
Starting the transition to CIPT
CIPT does not automatically apply to a commercial or industrial property. A property starts the 10-year transition to CIPT if it:
- has a qualifying use
- is involved in a specific type of transaction on or after 1 July 2024.
These transactions are known as entry transactions. They include certain dutiable transactions and relevant acquisitions in a landholder. If an exemption or concession results in duty payable on less than 50% of the market value of the property, the property does not qualify.
An entry transaction starts the 10-year transition period before CIPT applies.
Learn more about how a property starts the transition to CIPT.
Transition loan program
Eligible purchasers may be able to get a transition loan through the Treasury Corporation of Victoria. This loan helps cover the cost of land transfer (stamp) duty on entry transactions.
Visit the Treasury Corporation of Victoria to find out more about the loan’s eligibility criteria and terms and conditions, call 1300 659 430 or send them an email.
Rates and calculations
The tax begins in the first calendar year after the 10-year period has finished. For example, if an entry transaction occurs on 1 July 2024, the first year CIPT will apply is the 2035 tax year. If the entry transaction occurs on 1 August 2034, the tax will start in the 2045 tax year.
CIPT is assessed on a calendar year basis. CIPT generally applies at a flat rate of 1% of the property’s site (unimproved) value each year, provided the property continues to have a qualifying use. A reduced rate of 0.5% applies to eligible build-to-rent properties.
Exemptions and concessions
Duty concessions
Land transfer (stamp) duty applies to an entry transaction. For a transaction to qualify as an entry transaction, duty must be payable on at least 50% of the property’s’s market value. If a concession reduces the duty payable below this threshold, the property will not qualify. The 50% duty concession for eligible commercial and industrial property in regional Victoria can apply, but only if the remaining duty still meets the 50% requirement.
CIPT exemptions
CIPT is separate from land tax. During the 10-year transition to CIPT, land tax may still apply. Once the 10-year transition to CIPT is complete, the land owner may be liable for both taxes. But if a property is exempt from land tax, it will generally also be exempt from CIPT.
Transactions involving properties already transitioning to CIPT
After an entry transaction occurs, future dutiable transactions or relevant acquisitions involving that property may be exempt from duty. Duty exemptions may apply to transactions that occur during or after the 10-year transition period.
This depends on the property continuing to have a qualifying commercial or industrial use and meeting specific conditions.
The conditions vary depending on the type of transaction. These include:
- standard transactions
- non-standard transactions
- relevant acquisitions
- entry transactions involving a partial interest (less than 100%).
Learn more about:
CIPT administration
There are key administrative processes to help land owners manage CIPT obligations. These include:
- property clearance certificates that show a property's qualifying use, entry date and CIPT status
- private rulings to clarify how CIPT applies to specific transactions
- provisional determinations to assess qualifying use if there is no Australian Valuation Property Classification Code
- notification obligations if a property changes from a qualifying to a non-qualifying use.
Learn more about CIPT administration.
