You may need to pay a new annual property tax known as the commercial and industrial property tax (CIPT) if you own a commercial or industrial property that has entered the CIPT reform and completed its 10-year transition period.
What is CIPT?
CIPT is an annual property tax which is imposed on the taxable value of ‘CIPT taxable land’ as at 31 December in the year before an assessment year. Like land tax, CIPT operates on a calendar, not financial, year basis. The earliest CIPT assessment year is 2035.
CIPT taxable land is land that meets all these requirements at midnight on 31 December immediately preceding an assessment year:
- has entered the CIPT reform (land that has entered the CIPT reform is known as ‘tax reform scheme land’);
- has completed a 10-year transition period;
- has a qualifying use; and
- was taxable land for land tax purposes.
For example, land that entered the CIPT reform on 1 July 2025 can first become CIPT taxable land on 31 December 2035 and become liable for CIPT in 2036.
What are the rates of CIPT?
The rate of CIPT is generally 1% of the land’s site (unimproved) value. A reduced rate of 0.5% of the site value applies to a property that is eligible for a build-to-rent (BTR) benefit for land tax purposes.
Unlike land tax, there is no different rate for absentee owners.
Who is liable for CIPT?
You are liable for CIPT if you are the owner of CIPT taxable land at midnight on 31 December immediately preceding an assessment year.
The owner of CIPT taxable land is broadly the same as the owner of the land for land tax purposes. Joint owners of CIPT taxable land are jointly assessed for CIPT on land as if the land was owned by a single person.
CIPT notices of assessment
The Commissioner of State Revenue (Commissioner) will issue a notice of assessment for CIPT when required. As there is a 10-year transition period before CIPT applies, the earliest tax year for which a CIPT notice of assessment will be issued is 2035.
A CIPT notice of assessment will specify the date by which the assessment must be paid, which will not be less than 14 days after the day the notice is served. Further guidance about the process for the Commissioner to issue a CIPT assessment will follow in due course.
A person who is served a notice of assessment of CIPT must notify the Commissioner of any error or omission in the notice relating to:
- any tax reform scheme land owned by the person at the relevant time that has a qualifying use at that time but is not specified in the notice
- any property specified in the notice as not subject to CIPT.
Notice of the error or omission must be given to the Commissioner within 60 days after the date of the issue of the notice of assessment. Failure to notify the Commissioner of an error or omission in the notice of assessment of CIPT may result in the imposition of penalty tax.
More information
The earliest tax year in which CIPT (the annual tax) can apply to CIPT taxable land is 2035. However, you should be aware that:
- unpaid CIPT (including any interest and penalty tax) is a first charge on the land on which the CIPT is payable
- a property clearance certificate obtained from the Commissioner by a purchaser of the land will protect the purchaser against any amount of CIPT (including any interest or penalty tax) in excess of the amount set out in the certificate. A purchaser cannot rely on a property clearance obtained by the vendor
- a vendor is prohibited from apportioning or passing on CIPT to a purchaser under a contract of sale entered into on or after 1 July 2024 where the GST-inclusive purchase price is less than $10 million (indexed annually from 1 January 2025)
- a landlord (or head landlord) is prohibited from recovering CIPT from a tenant under a retail premises lease
- a landlord is also prohibited from recovering CIPT from a tenant or other renter under a residential rental agreement (such as for mixed use land or BTR land).
Objections
You may object to:
- a CIPT assessment
- a valuation used by the Commissioner in an assessment of CIPT.
Objecting to a CIPT assessment
An objection must be lodged with the Commissioner within 60 days after the date of the service of the notice of assessment or reassessment.
If you lodge your objection against your CIPT assessment after the 60-day timeframe, you must provide reasons for the delay. If no reasons are provided to explain the lateness in lodging your objection, your objection will be invalid.
Objecting to a valuation used in a CIPT assessment
You can object to the valuations used in your CIPT assessment within 2 months of the issue date on your assessment notice. There is no avenue to lodge a valuation objection late. For valuation objections, the 2-month period is a strict timeframe and applies even if you contact us to try and resolve your issue before lodging a formal objection.
No objection to provisional determination of qualifying use
In certain circumstances, the Commissioner may provisionally determine that your land has a qualifying use to enable it to enter the CIPT reform. For example, when the land has not been allocated an AVPCC.
You cannot object to a provisional determination of qualifying use. The Commissioner’s provisional determination will always be overridden by a subsequent valuation returned by the Valuer-General of Victoria (VGV). The Commissioner must assess or reassess any duty or CIPT payable as a result. You may object to the VGV’s valuation.
