A dutiable transaction involving a property that has entered the commercial and industrial property tax (CIPT) reform may be exempt from land transfer duty (also known as stamp duty) if it is a ‘tax reform scheme transaction’ that meets certain criteria including that the property has a qualifying use.
A comparable exclusion from landholder duty may apply, in certain circumstances, to a relevant acquisition in a landholder whose land holdings include a property that has entered the CIPT reform and has a qualifying use at the time of the acquisition.
A property that has entered the CIPT reform is known as tax reform scheme land.
What is a tax reform scheme transaction?
From 4 December 2024, there are 2 types of tax reform scheme transactions:
- a standard transaction; or
- a non-standard transaction.
Different exemption criteria apply to standard and non-standard transactions. Most dutiable transactions are standard transactions, including a transfer of tax reform scheme land.
Non-standard transactions include transactions involving dutiable leases, certain fixtures and the acquisition of an economic entitlement. An exemption from duty was not available for non-standard transactions prior to 4 December 2024.
Learn more about non-standard transactions.
Duty exemptions for standard transactions
A standard tax reform scheme transaction will be exempt from duty if it involves tax reform scheme land that has a qualifying use on the date of the transaction and:
- at least 3 years have elapsed between:
- the date when the tax reform scheme land first entered the CIPT reform (i.e. the entry date for the land); and
- the date of the contract or other agreement or arrangement for the standard transaction.
- the ‘entry interest’ for the tax reform scheme land was a 100% interest;
- the ‘entry interest’ and one or more ‘further interest(s)’ for the tax reform scheme land was a 100% interest; or
- the interest acquired in the tax reform scheme land under the standard transaction is the same or substantially the same as the ‘entry interest’ and/or any ‘further interest(s)' in the land.
Only one of the above criteria must be satisfied for the standard transaction to be exempt from duty. A partial exemption may apply in certain circumstances.
In this context:
- an ‘entry interest’ means the interest in the tax reform scheme land that was obtained under the entry transaction (or any interest that was aggregated together with the entry transaction). It does not matter if the entry interest was acquired under a qualifying dutiable transaction or a qualifying landholder transaction
- a ‘further interest’ means an interest in the tax reform scheme land that is different to the entry interest (and any other further interest), was subject to duty, and was obtained under a qualifying dutiable transaction or a qualifying landholder transaction that occurred after the entry transaction but before the subject standard transaction.
Learn more about entry transactions, including qualifying dutiable transactions and qualifying landholder transaction.
Example 1
On 1 January 2025, James acquires a 100% interest in a retail premises that satisfies all the requirements to be an entry transaction. Accordingly, the entry interest for the retail premises is 100%.
On 1 January 2026, Melinda acquires a 100% interest in the retail premises from James. The retail premises has a qualifying use at settlement of the transfer. The transfer is a tax reform scheme transaction and will be exempt from duty because the entry interest for the property was 100%.
Example 2
Joshua owns a 100% interest in a factory with a qualifying use.
On 1 January 2025, Ravi acquires a 60% interest in the factory from Joshua. The transfer satisfies all the requirements to be an entry transaction and the entry interest for the factory is Ravi’s 60% interest.
On 1 December 2027, Tahlia enters into a contract of sale to acquire a 40% interest in the factory from Joshua. Settlement occurs on 1 February 2028.
Ravi continues to hold his 60% interest in the factory.
Tahlia is not entitled to a duty exemption for her purchase because:
- Tahlia acquired her 40% interest under a contract entered into within 3 years of the entry transaction
- the entry interest for the factory was not a 100% interest; and
- Tahlia’s 40% interest in the factory is not the same or substantially the same as the entry interest for the property (i.e. it is not Ravi’s 60% interest in the factory).
Example 3
Philip owns a 100% interest in a warehouse with a qualifying use.
On 15 August 2026, Liying acquires a 70% interest in the warehouse from Philip. The transfer satisfies all the requirements to be an entry transaction and the entry interest for the warehouse is 70%.
On 30 August 2026, Liying acquires a further 20% interest in the factory from Philip. Liying pays duty on this transfer.
On 3 November 2026, Rebecca acquires 100% of the property from Liying (90%) and Philip (10%). The warehouse has a qualifying use at settlement of the transfer.
Duty is chargeable on the 10% interest in the property transferred to Rebecca. No duty is chargeable on the remaining 90% interest in the property because this interest is the same as the entry interest for the property (70%) and a further interest acquired in the property (20%).
Exclusion of tax reform scheme land from a landholder duty assessment
The land holdings of a landholder may include tax reform scheme land.
If a person makes a relevant acquisition in a landholder whose land holdings include tax reform scheme land, the unencumbered value (or part of the value) of the tax reform scheme land may be excluded from the calculation of duty on the relevant acquisition in certain circumstances.
This will occur if the tax reform scheme land has a qualifying use on the date of the relevant acquisition and:
- at least 3 years have elapsed between:
- the date when the tax reform scheme land first entered the CIPT reform (i.e. the entry date for the land); and
- the date of the contract or other agreement or arrangement for the relevant acquisition.
- the entry interest for the tax reform scheme land was a 100% interest; or
- the entry interest and one or more further interest(s) in the land was a 100% interest.
Only one of the above criteria must be satisfied for the value of the land to be excluded from the assessment of duty on the relevant acquisition.
The unencumbered value (or part of the value) of tax reform scheme land held by the landholder will also be excluded from the calculation of duty on a relevant acquisition to the extent that the interest a person is taken to have obtained in the property under the relevant acquisition is the same or substantially the same as either or both of the following:
- the entry interest for the tax reform scheme land; or
- any further interest taken to have been obtained in the tax reform scheme land before the relevant acquisition.
The value of tax reform scheme land is always taken into account in determining if the relevant entity is a landholder, irrespective of whether those land holdings are excluded from duty or not.
Example 4
On 1 January 2026, a private company takes transfer of a 100% interest in an industrial property with a qualifying use (and value above $1,000,000). This transfer satisfies all the requirements to be an entry transaction and the entry interest for the property is 100%.
On 1 January 2027, Amira acquires a 100% interest in the private company, which still holds its 100% interest in the industrial property. The property has a qualifying use at the date of the relevant acquisition.
The value of the property is taken into account to determine that the private company is a landholder. However, the value of the property is excluded from the assessment of duty on Amira's acquisition. As the company had no other land holdings at the date of the acquisition, Amira's acquisition is not subject to duty.
Example 5
On 30 December 2024, Hiroshi makes a relevant acquisition of a 100% interest in a landholder that is a private company. The landholder has 2 land holdings - a 100% interest in a Property 1 that has a qualifying use (valued at $2,000,000) and a 100% interest in a Property 2 that does not have a qualifying use (valued at $500,000).
Hiroshi pays duty on the relevant acquisition, which is calculated with reference to Properties 1 and 2. The acquisition satisfies all requirements to be a qualifying landholder transaction and an entry transaction in respect to Property 1, meaning Property 1 has entered the CIPT reform. The entry interest for Property 1 is 100%.
On 3 July 2026, Fatima acquires a 100% interest in the private company under a relevant acquisition. The private company continued to hold the same interests in Property 1 and Property 2 (which has not entered the CIPT reform). Based on the combined values of those properties, the private company is a landholder.
The value of Property 1 is excluded from the assessment of duty on the relevant acquisition because the entry interest for Property 1 was a 100% interest. Duty is only charged on the relevant acquisition by reference to the value of Property 2.
Example 6
Jasmine holds a 100% interest in a landholder that is a private unit trust. The only land holding of the landholder is a 100% interest in a commercial property with a qualifying use.
On 30 April 2025, Michael acquires a 60% interest in the landholder from Jasmine under a relevant acquisition. Michael pays duty on the relevant acquisition. The acquisition satisfies all requirements to be a qualifying landholder transaction and an entry transaction. The entry interest for the property is 60%.
On 14 January 2026, Sam acquires a 100% interest in the landholder from Michael and Jasmine. The only land holding of the landholder is the 100% interest in the commercial property.
The value of the commercial property is to be excluded from the calculation of duty on Sam’s relevant acquisition to the extent that the interest acquired by Sam is the same, or substantially the same, as the entry interest for the property (Michael’s 60% interest). Accordingly, 60% of the value of the property is excluded for the purposes of assessing duty on the relevant acquisition. Duty is chargeable on the relevant acquisition by reference to 40% of the value of the property.
Dealings in subdivided tax reform scheme land
From 24 June 2025, new deeming principles apply where tax reform scheme land is subdivided into smaller lots (child lots). The new deeming principles ensure that the duty exemptions for standard and non-standard transactions can apply appropriately if a child lot is sold or otherwise the subject of a dutiable transaction.
The new deeming principles can apply in the following circumstances:
- a property enters the CIPT reform under an entry transaction (the first transaction);
- the property is subdivided into smaller lots (child lots); and
- a child lot is the subject of a tax reform scheme transaction (e.g. a transfer of a child lot).
In these circumstances, each child lot is taken to inherit the parent lot’s entry interest (and any further interest) for the purposes of applying the duty exemptions to the tax reform scheme transaction of the child lot. Each interest inherited by a child lot has the same quantum, characteristics and duty consequences as the interest acquired in the parent lot.
Example 7
Rosie acquires a 100% interest in a commercial development property that has a qualifying use. The transfer satisfies all the requirements to be an entry transaction, and the entry interest is 100%.
Rosie registers a plan of subdivision to subdivide the property into 4 lots (the child lots). Shortly after, Adam acquires the child lots under 4 transfers of land. The child lots have a qualifying use at the time of settlement (e.g. the Commissioner makes a provisional determination).
Each of the 4 transfers is a tax reform scheme transaction and will be exempt from duty because the entry interest for each child lot is taken to be 100%.
Example 8
Ketut owns a 100% interest in an industrial property with a qualifying use.
On 1 January 2026, Usman acquires a 50% interest in the property. The transfer satisfies all the requirements to be an entry transaction and the entry interest is 50%.
Usman and Ketut register a plan of subdivision to subdivide the property (the parent lot) into 2 lots (the child lots).
On 1 July 2027, Sofia purchases a 50% interest in each child lot from Ketut under 2 transfers of land. The child lots have a qualifying use at the time of settlement (e.g. the Commissioner makes a provisional determination to that effect). Usman continues to hold his 50% interest in the factory.
Sofia is not entitled to a duty exemption on the purchase of a 50% interest in each child lot because:
- the entry interest for each child lot is taken to have the same quantum (50%), characteristics (acquired by Usman) and duty consequences as the entry interest for the parent lot; and
- the 50% interest acquired by Sofia is not the same, or substantially the same, as the entry interest (Usman’s 50% interest).
Relevant acquisitions in landholders whose land holdings included subdivided tax reform scheme land
There are similar deeming principles for relevant acquisitions in landholders whose land holdings included subdivided tax reform scheme land. The deeming principles are similar to the principles described above.
Example 9
On 1 January 2026, Jules acquires a 100% interest in a landholder under a relevant acquisition. The landholder holds a 100% interest in land with a qualifying use. The acquisition satisfies all requirements to be a qualifying landholder transaction and an entry transaction. The entry interest for the property is 100%.
The landholder subsequently registers a plan of subdivision to subdivide the property (the parent lot) into 2 lots (the child lots).
On 1 January 2027, Eugenie acquires a 100% interest in the landholder under a relevant acquisition. The landholder’s land holdings include the 2 child lots that have a qualifying use (e.g. the Commissioner makes a provisional determination to that effect).
In assessing duty on the relevant acquisition, the value of the 2 child lots are excluded because the entry interest for each child lot is taken to be a 100% interest. Accordingly, no duty is payable on Eugenie’s relevant acquisition.
Example 10
Company A holds a 100% interest in a landholder. The only land holding of the landholder is a 100% interest in a property with a qualifying use.
On 1 January 2026, Company B acquires a 50% interest in a landholder under a relevant acquisition. The landholder holds a 100% interest in a property with a qualifying use.
The acquisition satisfies all the requirements to be a qualifying landholder transaction and an entry transaction. The entry interest for the property is the 50% interest in the land taken to be acquired by Company B.
Shortly after Company B’s relevant acquisition, the landholder registers a plan of subdivision to subdivide the property (the parent lot) into 4 lots (the child lots).
On 1 January 2028, Company C acquires a 50% interest in the landholder from Company A. The land holdings of the landholder include the 4 child lots that have a qualifying use. The value of the 4 child lots is not excluded from the calculation of duty on this relevant acquisition on the basis that:
- each child lot is taken to have an entry interest of the same quantum (50%), characteristics (acquired by Company B) and duty consequences as the entry interest for the parent lot; and
- the interest acquired by Company C is not the same, or substantially the same, as that entry interest for the child lot.
