Starting from Monday 1 July 2024, when someone buys a commercial or industrial property, they will need to pay stamp duty one final time. After that, stamp duty will not apply on subsequent sales if the property continues to be used for commercial or industrial purposes. Instead, starting 10 years after the sale, a tax of 1% of the property’s site value will apply each year. If the same property sells again (within or after the 10-year period), no stamp duty will apply if the property continues to be used for commercial or industrial purposes.

This change will allow businesses to invest in buildings and infrastructure to match their business size, as the upfront cost of stamp duty can deter some business owners from upgrading or changing premises.

The Commercial and Industrial Property Tax is separate from land tax, which will continue to apply. There are no changes to existing land tax arrangements. Exemptions available under land tax will also apply to the Commercial and Industrial Property Tax.

Transition Loan

If you are considering purchasing a commercial or industrial property you may be eligible for a government transition loan provided by Treasury Corporation of Victoria, to fund the final stamp duty payment.

Key features:

• loan is available for commercial or industrial property purchases up to $30 million
• interest rate is fixed for the life of the loan
• 10 annual fixed repayments on the principal and interest, providing certainty on future repayments.

Purchasers who receive the loan will transition to an annual repayment from the time of purchase, freeing up capital that could be used to invest in their business.

This is a summary only. Purchasers should read the full terms and conditions carefully before deciding to apply for a transition loan.

For more information about the loan program, including eligibility criteria, please visit the Treasury Corporation of Victoria page on Commercial and Industrial Property Tax Reform.

The Victorian Chamber of Commerce and Industry welcomed this change. Similar tax changes have been proposed by the Henry Tax Review, the Productivity Commission, and the Grattan Institute.

The State Revenue Office is running webinars for Victorian businesses to understand the new tax and how it will be applied. To enrol, go to the Customer education page.

The Department of Treasury and Finance website also provides further information. Visit the Commercial and industrial property tax reform page.