Further Victorian CIPT And State Taxes Amendments

Introduction

On 15 October 2025, the Victorian Government proposed a suite of amendments to existing taxation acts as part of the State Taxation Further Amendment Bill 2025 (the Bill). The Bill and explanatory notes can be viewed here.

Commercial and Industrial Property Tax (CIPT)

From 1 July 2024, the CIPT came into effect, replacing stamp duty on subsequent transactions concerning commercial and industrial properties which have entered the CIPT scheme and continue to qualify for it (CIPT Land). The key changes include:

• Entry Transaction (Dutiable Transactions): an amendment to the definition of 'entry transaction' such that for a property to enter the CIPT regime the duty payable on the relevant dutiable transaction (but not landholder duty which remains unchanged) must amount to the duty that would be payable on 50% or more of the unencumbered value of the land. The exclusion for an exemption from transfer duty is replaced by this new provision (the exclusion for corporate reconstruction relief remains).This means that transactions which relate to an interest of 50% or more of the relevant land, but the dutiable value of those transactions is lower (e.g. such as through the applications of concessions), will not cause the relevant property to enter the CIPT regime. The calculation is complex where aggregated transactions are involved. The changes do not impact the regional duty concession (which is a 50% reduction in duty payable) as that concession reduces the duty payable directly, not the 'dutiable value' of the transaction (section 64B, Duties Act 2000 (Vic) (Duties Act)).

• Entry Transaction (Landholder Duty): The requirement that a relevant acquisition is not eligible for an exemption from duty under the Duties Act to be a qualifying landholder transaction is substituted for a requirement that duty is chargeable on the relevant acquisition under the Duties Act.

Duty

• Custodian Transfer: in good news, a concession has been added to the Duties Act which exempts a transfer of dutiable property between—

1. a trustee of a trust and a custodian in relation to the trust; or
2. a custodian in relation to a trust and another custodian in relation to the trust; or
3. a custodian in relation to a trust and a sub-custodian in relation to the trust; or
4. a sub-custodian in relation to a trust and another sub-custodian in relation to the trust

The effect of s 89D of the Duties Act should also mean that the concession extends to landholder duty transactions. This is a positive change as it resolves the technical issue which often arises when changing the custodian of the trust where property must be transferred but there is no change in beneficial ownership and the circumstances for a change in trustee do not apply.

• Consequential Amendments to Entry Interest: the Duties Act is also proposed to be amended to reflect the changes to the CIPT entry test(explained above) so that in determining the duty implications of subsequent transactions, concessions can only be claimed to the extent the relevant property has entered the new regieme by reference to the same formulation regarding duitable value.

• New Zealand Citizens and Foreign Purchaser Duty: a bespoke definition of foreign person for New Zealand citizens has been introduced to resolve anomalous outcomes that can occur due to unique arrangements arising under the special category visa within the meaning of section 32 of the Migration Act 1958 (Cth). The new test requires the person to ordinarily reside in Australia for a continuous period of at least 6 months within a period commencing 12 months prior to, and ending 12 months after, the date of the dutiable transaction or relevant acquisition.

Other amendments

Other proposed amendments to Victorian Taxation Acts include:

Amendments to Land Tax in respect of:

• New Zealand citizens to mirror the reforms to the Duties Act; and
• providing a new exemption from land tax for certain land occupied as a principal place of residence;
• the imposition of vacant residential land tax; and
• applications for relief from liability to pay land tax where the amount in issue does not exceed $5,000.

Amendments to Congestion Levy to:

• exclude parking spaces used exclusively for residential purposes from the operation of that Act; and
• increase the amount of the congestion levy imposed under that Act;
• provide an exemption in relation to parking spaces on the premises of a Government school or on Government school boarding premises;
• modify and expand the area in which the congestion levy is imposed;
• provide a concession for parking spaces within the category 2 levy area that are located on, or adjacent to, retail premises or retail shopping centers; and
• provide for the map of the levy area to be removed from that Act and to be published by the Commissioner of State Revenue on an appropriate website instead.

Amendments the Building Act 1993 (Vic) to further provide for the building permit levy imposed under that Act and to address defects in estimates and calculations for the purposes of the building permit levy and the imposition and collection of the building permit levy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.