Victoria takes next step in abolishing stamp duty for businesses
From 1 July 2024, commercial and industrial properties in Victoria will no longer pay stamp duty.
The Allan government has stated it is “delivering a fairer go for Victorian businesses” as they move forward on plans that were first announced in last May’s 2023–24 budget.
Yesterday, the long-promised legislation was introduced to Parliament as the Commercial and Industrial Property Tax Reform Bill 2024. Once passed, stamp duty on commercial property purchases will be replaced with “a more efficient Commercial and Industrial Property Tax”.
The state government intends for this change to make it “easier for businesses to set up, invest in new land and buildings, and move to new locations”.
Paul Guerra, Victorian Chamber of Commerce and Industry CEO, stated: “This bold move to stimulate commercial property investment signals the Victorian government’s willingness to further the conversation about tax reforms in a way that can benefit business growth in Victoria.”
According to the government’s forecasts, the reform will 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, when a property is sold it will transition to the new system. Stamp duty will be payable one final time, and then after 10 years owners will be charged of Commercial and Industrial Property Tax at a rate of 1 per cent of the property’s unimproved land value.
Eligible purchasers will be provided with a transition loan from the Treasury Corporation of Victoria in order to free up capital for businesses.
The stamp duty reform will not apply to owners of residential, primary production, community services, sport, heritage or cultural property.
All current stamp duty concessions and land tax exemptions for commercial and industrial properties will still apply for the final stamp duty payment.
Treasurer Tim Pallas stated that “while others talk about productivity reform, we’re getting on with abolishing one of the least efficient taxes in the Federation to back Victorian businesses”.
“We’ve worked closely with industry to deliver these changes, supporting Victorian businesses to grow and expand faster without the burden of stamp duty,” Pallas remarked.
The consultation with business and industry bodies was finalised in December 2023. At the time, Pallas said the consultation was an essential step to “get the design right and look forward to the transition beginning”.
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