Published: July 1, 2025
The Victorian Government has recently passed the State Taxation Acts Amendment Act 2025, introducing several important changes to state taxation laws. Following its Royal Assent on June 24, 2025, the act brings updates that will affect property buyers, developers, businesses, and landowners across the state.
Here’s a breakdown of the key amendments you need to know.
Extension of the Temporary Off-the-Plan Duty Concession
In a significant move to support the housing industry, the government has extended the temporary off-the-plan land transfer duty concession for an additional 12 months.
- What’s Changed: The eligibility period for the concession on purchases of eligible new apartments and townhouses now runs until October 21, 2026.
- The Benefit: This concession allows purchasers to reduce the duty payable by excluding the costs of construction that occur on or after the contract date from the property’s dutiable value.
Commercial and Industrial Property Tax (CIPT) Reform
The new act introduces amendments to the Commercial and Industrial Property Tax Reform Act 2024 to ensure a smooth transition for properties entering the new tax system.
- Child Lot Alignment: The duty payable on a subdivided property (a ‘child lot’) will now align with the tax treatment of the original property (‘parent lot’).
- Provisional Determinations: The Commissioner of State Revenue can now provisionally determine if a property has a ‘qualifying use’ for the CIPT reform, even if an official Australian Valuation Property Classification Code has not yet been assigned. This change is retrospective to July 1, 2024, ensuring properties transacted since then can enter the reform as intended.
Land Tax Amendments
Several changes have been made to the Land Tax Act 2005, primarily affecting the Principal Place of Residence (PPR) exemption and trustee obligations.
- Partial PPR Exemption: A partial PPR exemption can now apply to land where the owner has passed away or can no longer live independently, even if part of the land is used to generate income.
- Extended Exemption for Unfit Residences: The initial exemption period for a PPR on land that has become unfit for occupation due to an event like a fire or flood has been extended from two to four years, with a maximum possible exemption of six years.
- Streamlined Trustee Notifications: From January 1, 2026, notification requirements for trustees when land is transferred between trusts (with the same trustee) or when a trustee disposes of land to themselves in another capacity will be simplified.
New Penalty Rate under the Taxation Administration Act
To deter reckless non-compliance, a significant new penalty has been introduced.
- What’s Changed: A new base penalty tax rate of 50% will apply to tax and notification defaults that are determined to be the result of recklessness by the taxpayer or their representative.
Expanded Support for Trust for Nature
The Victorian Conservation Trust Act 1972 has been amended to broaden the use of funds for conservation efforts.
- Broader Criteria: The Vacant Land Conservation Covenant Account (VLCCA) can now allocate funds to a wider range of conservation covenants. This includes land that contains a dwelling, is zoned for non-residential use, or is located outside of metropolitan Melbourne.
These amendments represent a mix of targeted relief, administrative streamlining, and stricter enforcement. It is crucial for individuals and businesses involved in property and land transactions to familiarize themselves with these updates to ensure they meet their obligations and take advantage of available concessions.