The Victorian Government has introduced into Parliament new legislation to abolish stamp duty on commercial and industrial properties.
The Commercial and Industrial Property Tax Reform Bill 2024 will abolish the upfront cost of stamp duty and replacing it with a Commercial and Industrial Property Tax – which the government said will make it easier for businesses to set up, invest in new land and buildings and move to new locations.
The commercial stamp duty reform is expected to add thousands of jobs to Victoria’s economy and benefit the state’s economy by up to $50 billion in cumulative net present value terms over the next 40 years.
From 1 July 2024, when a property is sold, it will transition into the new system, with stamp duty being payable one final time on that property, and then after ten years the Commercial and Industrial Property Tax applying at a rate of one per cent of the property’s unimproved land value.
To fund their final stamp duty payment, eligible purchases can access a transition loan provided by the Treasury Corporation of Victoria on commercial terms, freeing up capital for businesses so they can expand or employ more workers.
Treasurer Tim Pallas said stamp duty is one of the “least efficient taxes in the Federation”.
“We’ve worked closely with industry to deliver these changes, supporting Victorian businesses to grow and expand faster without the burden of stamp duty.”
Owners of residential, primary production, community services, sport, heritage or cultural properties will not be affected by the reforms.
Existing stamp duty concessions for commercial and industrial properties, including the regional concession, will all continue to be available for the final stamp duty payment – and existing land tax exemptions will also apply to the Commercial and Industrial Property Tax.
Ahead of the 1 July 2024 start date, the government will provide educational support on the reform, including helping industry and taxpayers navigate the transition to the new scheme.