June 7, 2023

Volume XIII, Number 158


June 06, 2023

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June 04, 2023

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Abolition of Duty on Commercial and Industrial Properties in Victoria

The Victorian Government has announced that it plans to abolish transfer duty on sales of commercial and industrial properties. The proposed measures will not apply to residential premises. We have summarised the proposal and some initial questions below.


At present, there is no draft legislation and there is scant detail beyond a high level press release. However, our current understanding is as follows:

  • Transfer duty will continue to apply in the usual manner until 30 June 2024.

  • The comments which follow apply to a purchase of a commercial or industrial property on or after 1 July 2024:

    • A purchaser who acquires a commercial or industrial property on or after 1 July 2024 will be required to pay a final amount of transfer duty on that purchase. They will be given the choice to either:

      • Pay the final duty amount in a lump sum (as per normal); or 

      • Pay the final duty amount, plus interest, in 10 equal instalments over 10 years (with the Government providing a "loan" and presumably placing a charge on the land).

    • Ten years after settlement, the owner of the commercial or industrial property will commence paying property tax at a rate of 1% based on the unimproved land value.

    • Once a property is in the property tax net, it will stay within that net in perpetuity and transfer duty will not apply to any future sales of the same property.

The Government intends to provide more guidance on the transition arrangements by the end of this year following consultation.


At this stage, the proposal raises more questions than answers, including the following:

  • Will commercial and industrial properties acquired before 1 July 2024 remain outside the property tax net indefinitely (until next sold)?

  • How will "commercial and industrial properties" be defined? Does it include retail premises? What about primary production land?

  • Will property tax be payable in addition to land tax and council rates?

  • How will the property tax work for a property that is a mixture of both residential and commercial premises (say, a tower with office and residential premises)?

  • What happens if land subject to property tax is merged with land that is not subject to property tax?

  • Will landholder duty be abolished for the purchase of shares in a company or units in a trust which owns commercial or industrial property that is within the property tax net?

  • What happens if a commercial or industrial property subject to property tax is converted for residential use?

Copyright 2023 K & L GatesNational Law Review, Volume XIII, Number 144

About this Author

Matthew Cridland, KL Gates Law Firm, Tax Law Attorney

Mr. Cridland is a Sydney based indirect tax lawyer. He advises clients in relation to all indirect taxes, including goods and services tax (GST), stamp duty, land tax, payroll tax, wine equalisation tax (WET), luxury car tax (LCT), customs duty and excise.

With respect to clients and sectors, his areas of experience include: real property, financial services, corporate mergers and acquisitions, energy and resources, public private partnerships (PPPs) and infrastructure, telecommunications, retail, insolvency and restructuring, and inbound...

Will Grinter, KL Gates Law Firm, Real Estate Attorney

Mr. Grinter has extensive experience assisting clients in the property industry, with an emphasis on development, telecommunication and infrastructure projects. He also has experience advising clients in respect of planning and environment matters.