Starting from 1 July 2024, stamp duty on commercial and industrial properties in Victoria will be abolished for future sales. Instead, a 1% annual tax on the property’s site value will apply 10 years after the initial purchase.
Changes to Stamp Duty on Commercial and Industrial Properties in Victoria
The Victorian Government is making significant changes to how stamp duty applies to commercial and industrial property purchases. Starting from 1 July 2024, businesses purchasing such properties will pay stamp duty for the last time on the initial sale. From then on, stamp duty will no longer apply to future sales of the same property, as long as it continues to be used for commercial or industrial purposes.
Instead, from 10 years after the purchase date, a new annual tax of 1% of the property’s site value will be introduced. This tax will continue to apply each year moving forward. If the property is sold again, no further stamp duty will be payable if its commercial or industrial use remains unchanged.
Benefits for Business Owners
This reform provides businesses with greater flexibility to invest in properties that align with their operational needs. The elimination of stamp duty on future sales reduces the upfront costs that have historically deterred business owners from upgrading or expanding their premises.
Commercial and Industrial Property Tax
This new tax, known as the Commercial and Industrial Property Tax, is separate from land tax, which will remain unchanged. All current land tax exemptions will also apply to the new tax, ensuring consistency for property owners.
Transition Loan Program
For businesses purchasing a commercial or industrial property, the government is offering a Transition Loan through the Treasury Corporation of Victoria. This loan helps with the final stamp duty payment, allowing businesses to allocate more capital towards their operations.
Key Features of the Loan:
- Available for property purchases up to $30 million
- Fixed interest rate for the loan’s term
- 10 annual fixed repayments covering both principal and interest, offering payment certainty
This loan shifts businesses toward an annual tax model from the outset, freeing up funds for growth and investment.
Additional Resources and Support
For those considering applying for the Transition Loan or wanting more information, be sure to visit the Treasury Corporation of Victoria’s page on Commercial and Industrial Property Tax Reform.
The Victorian Chamber of Commerce and Industry has expressed strong support for these changes, noting that they align with recommendations from the Henry Tax Review, the Productivity Commission, and the Grattan Institute.
The State Revenue Office is also hosting webinars to help Victorian businesses understand the new tax and how it will be applied. To sign up, visit the Customer Education page on their website.
For further details, you can also explore the Department of Treasury and Finance website.
