Commercial and industrial property tax: a conveyancing guide

This guide explains what CIPT is, what to do when you act for a vendor, and what to do when you act for a purchaser. It finishes with a checklist for each role. The regime is complex, so refer anything beyond your expertise for specialist tax advice.

CIPT is a new annual property tax. It replaces stamp duty for land with a qualifying commercial or industrial use. The main sources are the Commercial and Industrial Property Tax Reform Act 2024 (Vic) (CIPT Act), the Duties Act 2000 (Vic) (Duties Act), and the Taxation Administration Act 1997 (Vic) (TA Act), which governs administration and the property clearance certificate.

Land enters the regime, and becomes tax reform scheme land, on the first transaction on or after 1 July 2024 that meets all of these requirements:

• the land has a qualifying commercial or industrial use;
• an interest of 50% or more transfers, directly or indirectly through a relevant acquisition under the Duties Act landholder provisions; and
• the transaction is not exempt from duty.

The first purchaser on or after 1 July 2024 generally pays the last stamp duty on the land, as long as it keeps a qualifying use. Some non-standard dealings can still attract duty, such as leases, interests in fixtures and economic entitlements, so seek specialist advice.

Once the property has entered into the CIPT regime, there is a 10-year transitionary period where the CIPT does not apply. CIPT then applies annually from the eleventh calendar year after the tenth anniversary of the entry transaction. CIPT is charged at 1% of the land's site value, or 0.5% for qualifying build-to-rent land, with no tax-free threshold.

The vendor's practitioner has two jobs: making the section 32 disclosure, and getting the contract's CIPT recovery position right.

Disclose the CIPT information in the section 32 statement

Section 32A of the SL Act requires the statement to disclose, for all land including residential:

• whether or not the land is tax reform scheme land within the meaning of the CIPT Act;
• the Australian Valuation Property Classification Code (AVPCC) most recently allocated to the land, whatever the land’s zoning or use; and
• if the land is tax reform scheme land, its entry date within the meaning of the CIPT Act.

Also disclose any CIPT amount affecting the land, as a financial outgoing under the same section. These obligations apply even where section 10G of the SL Act applies to the sale.

Below the ‘threshold amount’ as defined under section 10I of the SL Act (indexed annually, and a sum of $10,700,000 as at 1 January 2026), a contract term that makes the purchaser pay or adjust the vendor's CIPT is prohibited and unenforceable (section 10G of the SL Act). Where the contract price is at or above the threshold amount, apportionment of the CIPT or recovery of any amount of CIPT from the purchaser, is permitted.

• The purchaser's practitioner should advise on:
• whether the purchase brings the land into the CIPT regime,
• how the duty is paid (if any),
• when will the CIPT tax commence (if the property is in transition period)

will the client’s intended use bring the property out of the CIPT regime?

Check the section 32 disclosure and the SRO property clearance certificate. They show whether the land is already tax reform scheme land. Then assess whether this purchase is itself the entry transaction.

Watch indirect acquisitions. A relevant acquisition of 50% or more in a landholder company or unit trust can bring the underlying land into the regime, even though no land is directly transferred.

Where the purchase is the entry transaction, the purchaser pays the final stamp duty. The purchaser can pay it upfront, or use a government-facilitated transition loan. The loan runs for up to ten years and carries interest, and it must be repaid sooner if the property is sold within that period. Eligibility criteria apply.

If the price is below the threshold amount under section 10I of the SL Act, the vendor cannot pass a CIPT liability to the purchaser through the contract. At or above the threshold amount, review any apportionment special condition contained in the contract, and provide the appropriate advice to the purchaser client about the consequences any such special condition.

Either way, advise the client on when the annual CIPT will commence, so that the client can factor the tax cost into their purchase decision and the holding costs.

Practitioners should also ask the purchaser what they intend to use the property for. This is particularly relevant if a commercial or industrial property is within the transition period, and for example the purchaser intends to convert the commercial property into a residential development.

In this scenario, the purchaser’s proposed development and the property may cause the property to exit the CIPT regime, and as a consequence the purchaser’s change of use could trigger a duty liability under section 69AR of the Duties Act.

If a practitioner becomes aware that the purchaser may intend to develop or alter the property that may cause the property to exit the CIPT regime, practitioners should check the application of section 69AR of the Duties Act, and provide the client with written advice warning about potential duty implications. In some circumstances the client may need to obtain specialised state taxation advice.

Clients also need to be aware that there is an obligation to notify the SRO within 30 days of the change of use, where the property is no longer a qualifying use under the CIPT Act.

• Screen at matter opening for a qualifying commercial or industrial use, and for any indirect or landholder acquisition that could trigger entry, using a standard prompt.
• Check the legislation and current SRO guidance before advising, and keep a record confirming the advice given.
• Identify complexities beyond your expertise, such as non-standard dealings or landholder transactions, and refer the client for specialist tax advice.
• Confirm advice in writing, using an advice letter you maintain and adapt for each matter.

More information on CIPT

Commercial and Industrial Property Tax | State Revenue Office

Changes of use of property | State Revenue Office

Commercial and Industrial Property Tax reform in Victoria — What you need to know | LPLC

Commercial and Industrial Property tax questions and answers | LPLC