Victoria passes legislation to phase out stamp duty on commercial and industrial properties

Victoria’s transition from a stamp duty to a property tax regime for commercial and industrial properties will begin from the new financial year after legislation enacting the change was passed in State Parliament.

From 1 July 2024, stamp duty across the state will be payable one final time on commercial and industrial properties as they are transacted – with no stamp duty applicable to any future sale of those properties.

The government says the transformational reform is aimed at helping Victorian businesses set up, invest in new land and buildings, and employ more workers. 

The government estimates the reforms will lead to a $266 million tax cut in the first your years, while adding 12,600 jobs and benefiting Victoria’s economy by up to $50 billion over the next 40 years in cumulative net present value terms.

The new commercial and industrial property tax will apply 10 years after the next transaction and will be set at a flat rate of 1 per cent of a property’s unimproved land value per annum.

As part of the transition, eligible purchasers will have the option of accessing a government transition loan for the final stamp duty payment, allowing them to avoid any up-front lump sum payment, which the government says will free up capital to invest and employ more workers.

“We’re encouraging more businesses to set up and expand through this transformational reform of Victoria’s property tax system,” says Victorian Treasurer Tim Pallas.

“This reform is all about supporting business and growing the economy – it provides a $266 million tax cut in the first four years that will encourage businesses to set up, invest and employ more Victorians.”

The Victorian Chamber of Commerce and Industry has welcomed the new legislation as a “milestone moment for Victorian business that will encourage and promote growth”.

“The Victorian Chamber of Commerce and Industry has worked with the State Government to achieve this significant tax reform and we look forward to the increased activity that this change will stimulate,” says the chamber’s CEO Paul Guerra.