In 2024, the State Revenue Office (SRO) announced significant changes to stamp duty for commercial properties, and changes to land and payroll tax as part of the state’s COVID Debt Repayment Plan.

We have briefly described these changes below.  Please give us a bell if you need more information about how they may impact you.

1. Stamp duty reforms for commercial and industrial properties

Since July 2024, the Victorian Government has abolished land transfer duty (stamp duty) on newly acquired commercial and industrial property and has moved to an annual property tax called the Commercial and Industrial Property Tax (CIPT).

The reform states that for commercial or industrial properties transacted after 1 July 2024, stamp duty will be paid one final time.  Taxpayers can pay the final stamp duty amount upfront or, if eligible, in annual instalments over a 10-year period.  After the 10 year period, CIPT will apply (currently set at 1% of the land’s unimproved value). 

As long as the property continues to be used for commercial or industrial purposes, stamp duty will not apply to future transactions of the same property. 

Taxpayers who owned industrial or commercial property prior to 1 July 2024 should not be affected by CIPT.  The property will only enter the CIPT regime if sold after 1 July 2024.

For more information, please call us on (03) 8790 7700 or refer to this article on Commercial and industrial property tax https://www.sro.vic.gov.au/commercial-and-industrial-property-tax from the State Revenue Office of Victoria.

2. Land tax changes

Land tax is an annual tax paid for investment properties, vacant land, holiday homes, and commercial properties. This tax is calculated on a sliding scale and is based on the “site value” as of midnight on December 31 each year.

From 1 July 2024, land tax will apply when the site value of all land you own in Victoria is $50,000 or more (previously $300,000).

Note that land held on trust is assessed at trust surcharge rates of land tax.  The trust surcharge rates apply once the total taxable land is $25,000 or more.  There has been no change to this threshold.

Find out more about current land tax rates here. https://www.sro.vic.gov.au/rates-taxes-duties-and-levies/land-tax-current-rates

Depending on the use of the land and the owner of the land, there may be some exemptions available (e.g. primary production land or charitable organisations).  Please talk to us to find out more.

Please note, your principal place of residence is not subject to land tax.

3. Payroll tax changes

From 1 July 2024, the payroll tax free threshold increased from $700,000 to $900,000 for annual returns, and from $58,333 to $75,000 for monthly returns. 

From 1 July 2025, the payroll tax free threshold will increase again from $900,000 to $1,000,000 for annual returns, and from $75,000 to $83,333 for monthly returns.

From 1 July 2024, employers with annual wages between $3,000,000 and $5,000,000 are eligible for a reduced deduction. 

Employers with annual wages in excess of $5,000,000 are not eligible for any deduction.

We’re here to help you

Give us a bell and we’ll help you understand and make sense of these changing tax laws, and how they affect your business. Call us on (03) 8790 7700 or Send us an email. Our accountants are located in Mt Eliza, and we support local businesses on the Mornington Peninsula and throughout Melbourne.