Conveyancing and three key issues

The Commercial and Industrial Property Tax Reform Bill (the Bill) was introduced into the Victorian Parliament on 20 March 2024. The reforms are expected to pass into law in early May before commencing on 1 July 2024 (Note: the Act was passed in the same terms as the Bill).

Changes to stamp duty and the introduction of an annual property tax on commercial and industrial land under the Commercial and Industrial Property Tax Reform Act commenced 1 July 2024. Practitioners acting in matters involving commercial or industrial land in Victoria need to be aware of the full extent of these significant reforms.

LPLC has provided comprehensive information about the reforms in the article Commercial and Industrial Property Tax reform in Victoria — What you need to know, and a webinar Commercial and Industrial Property Tax (CIPT): Navigating the new reform.

Here we provide some additional answers to specific questions we have received from practitioners. We recommend practitioners use this information to gain a full understanding of the reforms and their practical application.

'Foreign purchaser additional duty' (FPAD) provisions have now been in place in the Duties Act 2000 (Vic) (Vic Duties Act) since 2015.

From 1 March 2020, the Victorian State Revenue Office (SRO) changed its approach to FPAD in the context of acquisitions of residential property made by 'family' discretionary trusts. The change of approach has meant there has been, and will be, an increase in discretionary trusts found by the SRO to be foreign trusts liable to pay FPAD when acquiring residential property.

Practitioners practicing in conveyancing matters need to be aware of the way the FPAD regime works for discretionary trusts so that clients can be advised of its application.