What you need to know about the CIPT reforms

Under these reforms, stamp duty for Victorian commercial and industrial property will be transferred to an annual property tax known as the CIPT reform.

As outlined by Victoria’s State Revenue Office: “The CIPT reform is detailed in the Commercial and Industrial Property Tax Reform Act 2024 (the Act) and includes amendments to several Acts including the Duties Act 2000 (the Duties Act) and the Taxation Acts Amendment Act 1997. The CIPT reform will be effective from 1 July 2024.”

Stamp duty is to be phased out progressively for commercial and industrial property, with the CIPT to apply 10 years after the property is next sold.

Assisting buyers, the Treasury Corporation of Victoria (TCV) has established the Transition Loan Program, with “annual repayments over 10 years will be set upfront to provide borrowers with certainty and the loan will be secured by a first ranking statutory charge on the land being purchased.”

Pepper Money has been asked to assist in the administration of the loan program, with CEO Mario Rehayem excited about the partnership.

“We are proud to be entrusted with such an integral role in the administration of the new Commercial and Industrial Property Tax Reform Transition Loan Program. Not only is this a promising policy for Victorian SMEs, but our involvement appropriately aligns with Pepper Money’s ongoing commitment towards helping people succeed,” he said.

“We are leveraging our expertise in credit and loan servicing, along with our in-house purpose-built technology to implement the program. This will include loan establishment, credit assessment, settlement, and ongoing servicing of the transition loans, as well as administration services for TCV.”

The loan will make things easier for investors in managing cash flow. Rehayem said that these reforms could help businesses thrive by alleviating financial burden.

“We welcome and support the reform which aligns to our mission of helping people to succeed, the transition loan spreads payments out over 10 years to help Victorian businesses manage cash flow,” Rehayem said.

“The loan now offers eligible businesses greater opportunity to invest, grow and expand. The capital could be invested in expanding operations sooner, hiring more staff, or simply alleviating some of the pressures businesses are currently facing.”

These changes are significant for the state and will require those involved to get up to speed on what the reforms entail.

“It’s crucial for finance professionals including brokers, accountants, financial planners, conveyancers, and solicitors to understand the new reform and be capable of articulating the options with their clients,” Rehayem said.

[Related: Victorian property tax to affect investment decisions]

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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