Victoria’s Commercial and Industrial Property Tax (CIPT) Explained for Investors

Victoria’s commercial and industrial property tax (CIPT) is an annual tax on the land value of commercial and industrial property that is gradually replacing stamp duty. The reform began on 1 July 2024: a property enters when it is sold under a qualifying entry transaction, the buyer pays stamp duty one last time, and after a 10 year transition the owner pays CIPT, generally at 1% of the site value each year. Later sales of that property may then be exempt from stamp duty.

Key takeaways

• CIPT started on 1 July 2024 but does not apply to a property until it has an entry transaction on or after that date.
• An entry transaction needs a qualifying commercial or industrial use, an interest of 50% or more, and duty charged on at least 50% of the property’s value.
• The tax starts in the first calendar year after the 10 year transition. An entry on 1 July 2024 means CIPT first applies in the 2035 tax year.
• The State Revenue Office (SRO) says CIPT generally applies at a flat 1% of site value each year, with 0.5% for eligible build to rent property.
• Land tax still applies during the transition, and both taxes can apply afterwards.
• Eligible first purchasers can apply to Treasury Corporation of Victoria for a transition loan to fund the final stamp duty.

What is the commercial and industrial property tax?

For decades, buyers of Victorian commercial property have paid a large stamp duty bill upfront every time a property changed hands. The commercial and industrial property tax reform changes that. The Victorian Government is progressively abolishing stamp duty on commercial and industrial property and replacing it with an annual tax based on the land value.

The SRO describes CIPT as “an annual tax on the land value of commercial and industrial properties in Victoria”. The key word is progressively. Each property moves into the new system only when it is sold in a particular way, and the annual tax only starts 10 years after that.

When did CIPT start in Victoria?

The reform commenced on 1 July 2024. The SRO is clear that commercial and industrial properties “do not automatically enter the CIPT reform from 1 July 2024”. A property enters only through an entry transaction, or in some cases through a consolidation or subdivision involving land already in the reform.

Timing of the agreement matters as well as the transfer. The SRO says a transaction is not an entry transaction if it happens under an agreement or arrangement entered into before 1 July 2024. Its examples include a contract dated 1 May 2024 that settled in December 2024; it did not cause the property to enter.

How does a property enter the CIPT reform?

According to the SRO, an entry transaction must meet all of these requirements:

• it happens on or after 1 July 2024, under an agreement or arrangement entered into on or after that date
• it is a qualifying dutiable transaction, such as a transfer of the property, or a qualifying landholder transaction, such as buying a controlling interest in a company or unit trust that owns land
• the property has a qualifying use on the date of the transaction
• the interest acquired is 50% or more, either on its own or when combined with certain related interests
• for a dutiable transaction, duty is charged on 50% or more of the property’s unencumbered value.

The last point means a transfer that is fully exempt from duty, such as most transfers from a deceased estate to a beneficiary, does not trigger entry. A concession that cuts the duty below the 50% test also stops the property entering. The 50% duty concession for eligible commercial and industrial property in regional Victoria is disregarded when the SRO applies this test, so it does not by itself prevent entry.

Interests bought by associated people, such as relatives or related companies, can be added together. For example, two siblings each buying 25% of a factory together reach 50%.

Which properties have a qualifying use?

The SRO assesses qualifying use title by title, usually by the Australian Valuation Property Classification Code (AVPCC). That is a number between 100 and 991 that the Valuer General gives each occupancy, and it appears on your council rates valuation notice. A property qualifies if all its codes fall in these ranges:

• 200 to 299, commercial. Retail premises, shops, cafes, offices, hotels, motels, medical centres and commercial vacant land.
• 300 to 399, industrial. Manufacturing, factories, warehouses, storage facilities and industrial vacant land.
• 400 to 499, extractive industries. Mines and quarries.
• 600 to 699, infrastructure and utilities. Waste disposal and recycling facilities.

Mixed use property, such as a shop with a residence above on one title, is judged on its sole or primary use. The SRO looks at factors including floor area, intensity of use, investment, returns and zoning. If more than half the floor space is designed for a qualifying use, that points towards the property qualifying. Eligible student accommodation can also qualify.

What changed in 2025?

The rules have been refined since the start date. One change investors may meet is in the State Taxation Acts Amendment Act 2025, which commenced on 25 June 2025. The SRO says that before this change there was no way to decide whether a property with no AVPCC, often a newly subdivided lot sold before a council valuation, had a qualifying use.

The Commissioner of State Revenue can now make a provisional determination of qualifying use, with regard to matters such as the actual use, the parent lot’s code and the zoning. That determination applies until the Valuer General allocates a code. If the new code says the property does not qualify, duty can be reassessed.

The SRO’s CIPT guidance pages we relied on were last updated on 29 September 2026. Rules in this area are detailed and still being refined, so always check the current SRO pages, or get a private ruling, before relying on a particular outcome.

How does the 10 year transition work?

The entry transaction is the last time stamp duty is paid on the property under the normal rules. The buyer pays duty as usual, which you can estimate with our stamp duty calculator. The 10 year transition clock then starts.

The SRO says the tax “begins in the first calendar year after the 10-year period has finished”. Its examples are:

• an entry transaction on 1 July 2024 means CIPT first applies in the 2035 tax year
• an entry transaction on 1 August 2034 means CIPT first applies in the 2045 tax year.

During the transition, the property is not charged CIPT. However, the SRO says future transactions involving that property may already be exempt from stamp duty, as long as it keeps a qualifying use and meets specific conditions. That is the trade the reform offers: one final duty payment, then an annual tax in place of future duty.

What is the CIPT rate?

CIPT is assessed on a calendar year basis. The SRO says it “generally applies at a flat rate of 1% of the property’s site (unimproved) value each year”, provided the property keeps a qualifying use. A reduced rate of 0.5% applies to eligible build to rent property.

Here is a hypothetical example with round numbers only. If a warehouse has a site value of $1,000,000 in a year when CIPT applies, the annual CIPT at 1% would be $10,000. Site value is the land value only, without buildings, so it is usually lower than the price paid for an improved property.

Does land tax still apply?

Yes. The SRO says CIPT is separate from land tax. Land tax may still apply during the 10 year transition, and once the transition is complete the owner may be liable for both taxes. If a property is exempt from land tax, it will generally also be exempt from CIPT.

When you model holding costs for a Victorian commercial property, include land tax now and CIPT later in your long range numbers. Our guide to how income tax, land tax and CGT interact covers the other taxes in the picture.

What is the CIPT transition loan?

To ease the final stamp duty payment, eligible first purchasers of a property entering the reform can apply for a transition loan from Treasury Corporation of Victoria (TCV). TCV states these key terms:

• Purpose. The loan can cover up to the stamp duty payable on the entry purchase, capped at $1.93 million.
• Term. 10 years, repaid in 10 equal annual payments of principal and interest, with no interest only or redraw option.
• Security. A first ranking statutory charge recorded on the title of the property.
• Property limits. The property must have a qualifying use, a sale price of no more than $30 million, and must not already be in the reform.
• Who is excluded. Self managed super funds cannot apply. Individuals must confirm the property will not be used mainly for residential or residential investment purposes.
• Other conditions. Applicants need finance approval from an approved lender and pass a TCV credit assessment.

The interest rate is set by TCV and fixed for the life of the loan. Read the full terms on the TCV website, and speak to your broker and accountant about whether it suits your plans. Lenders usually assess commercial loans differently from home loans, and they will want to know about a charge that ranks ahead of their own security.

What should buyers of commercial property in Victoria check?

CIPT now affects the cost and future duty position of most commercial purchases in Victoria. Before you sign, work through these checks with your conveyancer:

• Has the property already entered? The SRO’s property clearance certificate shows a property’s qualifying use, entry date and CIPT status. It is usually attached to the vendor’s Section 32 statement.
• If it has entered, will your purchase be duty exempt? The SRO says exemptions depend on the property keeping a qualifying use and meeting specific conditions, which vary with the type of transaction.
• If it has not entered, will your purchase be the entry transaction? If so, you pay duty now and the 10 year transition starts from that transaction.
• What is the AVPCC? Check the code on the rates notice. A mixed use or newly subdivided property needs closer attention.
• When is the contract dated? Arrangements made before 1 July 2024, including options and heads of agreement, can stop a purchase being an entry transaction.
• What is the long term holding cost? Budget for land tax now and CIPT later, both based on site value.
• Is the price right for the tax position? A property already in the reform may offer a duty saving on purchase, but it will move to CIPT sooner.

If you are buying in Melbourne or regional Victoria, our pages on property investment in Melbourne and property investment across Victoria explain how we approach purchases in the state.

Frequently asked questions

When did the commercial and industrial property tax start?

The reform commenced on 1 July 2024. Properties do not enter automatically; they enter through an entry transaction on or after that date, under an agreement made on or after that date.

What is the CIPT rate in Victoria?

The SRO says CIPT generally applies at a flat rate of 1% of the property’s site (unimproved) value each year, provided the property keeps a qualifying use. A reduced rate of 0.5% applies to eligible build to rent property.

When do I start paying CIPT?

CIPT begins in the first calendar year after the 10 year transition ends. If the entry transaction was on 1 July 2024, CIPT first applies in the 2035 tax year.

Do I still pay stamp duty when buying commercial property in Victoria?

If your purchase is the entry transaction, yes, you pay stamp duty one last time. If the property has already entered the reform, your purchase may be exempt from duty if it meets the SRO’s conditions.

Does land tax still apply to commercial property in the reform?

Yes. Land tax may still apply during the transition, and after it the owner may be liable for both land tax and CIPT. A property exempt from land tax is generally also exempt from CIPT.

Can I borrow to pay the stamp duty on an entry transaction?

Eligible first purchasers can apply for a transition loan from Treasury Corporation of Victoria to cover the stamp duty, repaid over 10 years. Self managed super funds are excluded and other conditions apply.

Sources

• State Revenue Office Victoria: Understanding commercial and industrial property tax
• State Revenue Office Victoria: Entry into the reform
• State Revenue Office Victoria: Determining qualifying use for CIPT
• Treasury Corporation of Victoria: Commercial and Industrial Property Tax Reform transition loan

Citadel Agency is a licensed buyers agency that also buys commercial property for investors, including industrial, retail and medical or childcare property.

Looking at a commercial purchase in Victoria? Book a free strategy call with our team.

General information only. It does not take into account your objectives, financial situation or needs. Speak to a qualified professional before acting.

General information only. It does not take your objectives, financial situation or needs into account and is not financial, tax, credit or legal advice.