Hayton Kosky Lawyers | Commercial Property Update
Brett Hayton | May 2026
Victoria is in the middle of the most significant reform to commercial property taxation in a generation. Since 1 July 2024, the stamp duty regime that has applied to every transfer of commercial and industrial property has begun its phased abolition — replaced by an annual Commercial and Industrial Property Tax (CIPT) of 1% of site value, payable after a 10-year transition period.
For property owners, investors, and their advisers, understanding how and when a property enters the reform is no longer optional. The rules are technical, the consequences of getting them wrong are significant, and the window to plan effectively is open now.
The Core Mechanism — One Final Duty, Then Annual Tax
The reform works in two stages. The first time a qualifying commercial or industrial property is transferred after 1 July 2024 — pursuant to an agreement entered into on or after that date — stamp duty is paid for the last time. That transaction is the entry transaction. From that point, the 10-year transition clock starts running.
During the transition period, subsequent transfers of the property are generally exempt from stamp duty, provided the property retains its commercial or industrial use. Once the 10 years expire, annual CIPT of 1% of the property’s site (unimproved) value becomes payable each year.
The financial implications are substantial. A purchaser of a $5 million commercial property entering the reform today (2024) pays stamp duty once — and then nothing further until 2034, when annual CIPT commences. A purchaser of the same property in 2030 pays stamp duty once and commences CIPT in 2040. The timing of entry matters.
Not Every Transaction Triggers Entry — The Rules Are Precise
Entry into the reform is not automatic. A transaction must satisfy a series of cumulative requirements: it must be a qualifying dutiable or landholder transaction; it must be pursuant to an agreement entered into on or after 1 July 2024; the property must have a qualifying use (broadly, commercial or industrial as classified under the AVPCC system); the transaction must relate to a qualifying interest of 50% or more; and duty must be chargeable on at least 50% of the property’s unencumbered value.
Each of these requirements has nuance. Mixed-use properties require analysis of whether the qualifying use is the “sole or primary” use. Landholder transactions require application of a specific formula. Interests of associated persons may be aggregated. Pre-existing options and arrangements can prevent entry even where the transaction itself occurs after 1 July 2024.
Use Our Interactive Tools to Navigate the Reform
To assist clients and practitioners, Hayton Kosky has published a comprehensive CIPT reference guide . The guide covers every aspect of the reform — from qualifying use and entry logic through to the TCV Transition Loan, administrative obligations, and practitioner due diligence checklists.
Two features are worth highlighting.
The 10-Year Transition Timeline is an interactive scenario calculator that allows you to select the year your property entered (or will enter) the reform and immediately see when the transition period ends and when annual CIPT commences. It also illustrates the full property lifecycle — from the entry transaction and final stamp duty payment, through the duty-free transition period, to the commencement of annual assessments. For clients comparing acquisition timing, or for advisers preparing long-term financial projections, this tool provides immediate, visual clarity.
The CIPT Decision Tree is a five-question diagnostic tool — the CIPT Logic Engine — that steps through each of the entry requirements in sequence. Answer yes or no to each question and the tool identifies whether your transaction is an entry transaction, why it may not be, or whether further analysis is required. It also summarises your answers and provides tailored next steps. The Decision Tree links directly to the Timeline, so once you confirm entry, you can immediately calculate when CIPT will commence for that property.
A Critical Warning for SMSF Trustees
One aspect of the reform that warrants specific attention is the position of self-managed superannuation fund (SMSF) trustees. The Victorian Government has made available a facilitated loan through the Treasury Corporation of Victoria (TCV) to assist purchasers in funding the final stamp duty payment on an entry transaction — up to $1,930,000 per property. However, SMSF trustees are ineligible for this loan.
The loan is secured by a statutory charge registered on the title of the property. SISR Regulation 13.14 prohibits a trustee of a regulated superannuation fund from granting a charge over an asset of the fund. An SMSF trustee that accepts the loan and permits the charge to be registered risks contravening this provision, with potentially severe consequences for the fund’s complying status. SMSF trustees acquiring commercial property must fund the stamp duty from the fund’s own resources and should obtain specialist SMSF legal and financial advice before proceeding.
Conveyancing Implications — Due Diligence Has Changed
The reform has materially altered the due diligence obligations that apply to every commercial property acquisition in Victoria. Practitioners must now check the SRO register to determine whether a property has entered the reform, obtain a property clearance certificate, confirm the entry date and calculate when CIPT will commence, and check the title for any TCV Transition Loan charge. Section 32 vendor’s statements must disclose the property’s reform status, any TCV loan, and the CIPT commencement date.
Failure to conduct this due diligence — or to advise clients of the ongoing 30-day change of use notification obligation — exposes practitioners to significant professional risk.
For specific advice on how the CIPT reform applies to your property or transaction, contact Hayton Kosky Lawyers on (03) 9557 3355 or visit our CIPT guide
This article is intended as general information only and does not constitute legal advice. The CIPT reform involves complex rules and individual circumstances vary. Always obtain specific legal advice in relation to your transaction.
Hayton Kosky Lawyers Level 1, 300 Centre Road, Bentleigh VIC 3204 (03) 9557 3355 | haytonkosky.com.au Commercial & Property Law