Commercial and Industrial Property Tax (CIPT) Victoria: A Plain-English Guide for Buyers and Sellers

If you are buying or selling commercial or industrial property in Victoria, you have probably heard the letters CIPT and felt your eyes glaze over. You are not alone. Victoria’s biggest property tax reform in a generation came into force on 1 July 2024, and most buyers, sellers and even some property professionals are still finding their footing.

This guide is the plain-English version. No legal jargon. Just what CIPT is, how it works, and what it means for you when you sign a contract.

What is CIPT?

CIPT stands for the Commercial and Industrial Property Tax. It is Victoria’s new way of taxing commercial and industrial property, and it replaces stamp duty on those property types over time.

Under the old system, every time a commercial property changed hands, the buyer paid stamp duty. A full lump sum, every sale, forever. Under CIPT, a property pays stamp duty one final time, and then never again. Instead, a smaller annual tax kicks in after a 10-year wait.

The reform applies to commercial and industrial property in Victoria only. It does not apply to residential property, and it does not apply outside Victoria.

Why Victoria changed the rules

Stamp duty has long been criticised as a tax that punishes people for moving. Every transaction triggers a fresh lump sum, which discourages business owners from relocating, expanding or selling when the time is right.

The Victorian Government’s case for CIPT was that an annual land-based tax is more predictable, more efficient, and removes the upfront barrier that stamp duty creates. The reform was legislated through the Commercial and Industrial Property Tax Reform Act 2024 and commenced on 1 July 2024.

How a property enters the CIPT system

This is the bit that confuses most people, so it is worth slowing down.

A commercial or industrial property is not automatically in CIPT just because the reform has started. It enters the system at its next sale on or after 1 July 2024.

That sale is called the entry transaction. The buyer pays stamp duty on that sale, one final time. From the moment that sale settles, the property is in CIPT for good.

If a property has not been sold since 1 July 2024, it is still in the old stamp duty system. The old rules will keep applying until it is next sold.

The 10-year deferral

Once a property enters CIPT, nothing else happens for 10 years.

The annual CIPT does not start straight away. There is a 10-year deferral, built into the legislation, that gives buyers time to settle in before the annual tax begins. For properties that entered the system in 2024-25, that means no annual tax until 1 July 2034 at the earliest.

This 10-year window is set in legislation. It was not changed by the 2026-27 Victorian Budget.

The annual 1% tax

After the 10-year deferral runs out, the property attracts an annual Commercial and Industrial Property Tax. The tax is calculated on the property’s unimproved land value, not the building value.

From that point on, the annual tax is paid every year for as long as the property stays in commercial or industrial use. But there is no further stamp duty payable, ever, no matter how many times the property is sold.

The current rate and the rules for taxable value are administered by the State Revenue Office and published at sro.vic.gov.au.

The tax follows the property, not the owner

Here is the part most buyers miss.

Once a property is in CIPT, it stays in CIPT no matter who owns it next. If Buyer A pays the entry-transaction stamp duty and sells in year five, Buyer B pays no stamp duty on that purchase. But Buyer B inherits the clock that is already running. Buyer B will start paying the annual tax in year 11, not year 21.

The fresh start is per property, not per owner.

This matters when you are buying. You need to know exactly where in the CIPT cycle a property sits, because it changes what you pay at settlement and what you will pay in the years ahead.

The transition loan option

For buyers triggering the entry transaction, paying a final lump-sum stamp duty can be a cash flow hit. To soften the landing, the Victorian Government introduced a 10-year transition loan, facilitated by the Treasury Corporation of Victoria.

In simple terms: instead of paying the final stamp duty upfront, eligible buyers can spread the cost over 10 years in annual instalments. There is interest, and there are eligibility conditions. It is not the right choice for every buyer, but it can be a useful option, particularly for smaller business owners and first-time commercial purchasers.

Your conveyancer can walk you through whether the transition loan stacks up for your situation.

How long you hold the property changes the maths

CIPT does not give every buyer the same deal as the old stamp duty system. Whether you come out ahead depends on how long you hold the property.

In broad terms:

Short-hold buyers tend to win. If you buy and sell within a few years, paying one annual CIPT instalment or two costs less than a full lump-sum stamp duty would have.
Long-hold owner-occupiers and generational holds can end up paying more. Over 20 or 30 years, the annual CIPT bills add up beyond what a one-off stamp duty would have cost.

There is a tipping point, and it sits somewhere around the 10 to 11 year mark for many properties, but the exact answer depends on land value, purchase price and what you intend to do with the property.

This is one of the most important conversations to have before you sign, not after.

What changes when you sell

If you are selling a property that is already in CIPT, no further stamp duty is payable by your buyer. That is a real positive in marketing terms, and buyers often factor it into what they are willing to offer.

If you are selling a property that has not yet entered CIPT, your buyer will be the one paying the final stamp duty and triggering the entry transaction. That changes the cash flow your buyer is planning for, and it needs to be reflected in the contract.

Either way, disclosure is critical. The contract needs to be accurate about where the property sits, and your conveyancer’s job is to make sure it is.

What happens if a property changes use

CIPT only applies to property in commercial or industrial use. If a property’s use changes, for example, an industrial site that is rezoned and redeveloped as residential, the rules around whether the property stays in CIPT or drops out of it become important.

The 2026 amendments allow the State Revenue Office Commissioner to make provisional determinations of qualifying use, even before formal valuation classification is finalised. In plain terms, that reduces the amount of administrative limbo for buyers and sellers waiting on confirmation.

If you are considering a change of use, or buying a property where the use might change in the next few years, this is a conversation to have early.

What changed in 2025 and 2026

The CIPT reform is still relatively new, and the rules have been tightened in two important ways since launch:

June 2025 subdivision rule. Subdividing a property in CIPT no longer resets its CIPT status. Child lots inherit the parent lot’s position in the system. This closes off a structuring loophole.
2026 provisional determinations. The State Revenue Office Commissioner can now make provisional determinations of qualifying use, reducing delays for buyers and sellers.
Entry-transaction tightening, retrospective to 1 July 2024. The definition of an entry transaction was tightened to require duty payable on at least 50% of the dutiable value, blocking partial-interest structuring designed to avoid CIPT entry.

The direction of travel is anti-avoidance and tighter administration, not changes to the rate. The 2026-27 Victorian Budget did not announce any new CIPT measures.

For Tick Box’s full summary of the 2026-27 Budget position on CIPT, see our Commercial and Industrial Property Tax Victoria 2026-27 update.

What buyers should ask their conveyancer

Before you sign on a commercial or industrial property in Victoria, you want clear answers to these questions:

Is this property already in CIPT, or is mine the entry transaction?
What stamp duty applies on settlement, and is the transition loan worth using?
Where does this property sit in the 10-year deferral, and when does the annual tax kick in?
Is the seller’s disclosure about CIPT status accurate?
Does the contract have any CIPT-specific clauses I need to understand?
How does my hold-period plan stack up against the maths?

A good conveyancer answers all six before contract signing, not after.

Frequently asked questions

Do I still pay stamp duty when I buy commercial property in Victoria? Yes, if your purchase is the property’s first sale on or after 1 July 2024. That is the entry transaction. Stamp duty is paid one final time, then the property moves into CIPT. Future buyers of that property pay no further stamp duty.

What is the entry transaction? It is the first sale of a commercial or industrial property on or after 1 July 2024. That sale triggers entry into CIPT, the final stamp duty payment, and the start of the 10-year deferral.

When does the 1% annual tax start? Ten years after the entry transaction. For properties that entered the system in 2024-25, the first annual CIPT payment is due no earlier than 1 July 2034.

How is CIPT calculated? The annual CIPT is calculated as a percentage of the property’s unimproved land value, not the building or improvements. The current rate is published by the State Revenue Office.

Can I pay the final stamp duty in instalments? Yes. The Treasury Corporation of Victoria facilitates a 10-year transition loan for eligible buyers, allowing the final stamp duty to be spread over annual instalments with interest. Your conveyancer can advise whether it is the right option for you.

Does CIPT apply to mixed-use property? The treatment of mixed-use property depends on its qualifying use under the legislation. The 2026 provisional determination powers help speed up classification questions, but mixed-use cases need to be assessed individually.

What if I bought before 1 July 2024, am I in CIPT? No. If your property has not been sold since 1 July 2024, it is still in the old stamp duty system. It will enter CIPT at its next sale.

Does CIPT replace land tax? No. CIPT sits alongside existing land tax. They are separate taxes, administered separately.

Is CIPT cheaper than stamp duty? It depends on how long you hold the property. Short-hold buyers tend to come out ahead. Long-hold owner-occupiers and generational holds can pay more over time.

Do I need to disclose CIPT status when I sell? Yes. The contract of sale must accurately reflect where the property sits in the CIPT system. Disclosure is your conveyancer’s job to get right.

Talk to a Victorian commercial conveyancer

CIPT changes how stamp duty applies to commercial and industrial property in Victoria, and it adds a future annual tax that needs to be planned for. The right time to have the conversation is before you sign, not after.

Tick Box Conveyancing handles commercial and industrial transactions across Victoria, with offices in Moonee Ponds, Mornington, Geelong and Dromana. Director Martin Galea has more than 30 years of experience in conveyancing and property law, sits on industry advisory bodies, and has presented to industry groups on the CIPT reform.

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