The Victorian government has announced a tax reform that will see commercial and industrial properties pay an annual tax from 1 July 2024 instead of the lump sum figure.
The government says the significant tax reform will help businesses create new jobs and add $50 billion to the Victorian economy through enhanced business growth.
The changes do not impact residential property. First-home buyers in Victoria currently receive an exemption from stamp duty for properties valued under $600,000 and a reduced rate charged for properties worth up to $750,000.
The new annual tax will be 1% of a commercial property’s unimproved land value.
The introduced annual tax will not apply to existing owners but only to commercial and industrial properties sold from 1 July 2024. The annual property tax will be payable from 10 years after the transaction.
The government said to ensure a smoother transition, the first purchaser of the property after 1 July 2024 would be able to choose to either pay the property’s final stamp duty liability as an upfront sum or transition to an annual payment by opting to pay fixed instalments over ten years equal to stamp duty and interest with a government-facilitated loan.
Victoria Premier Daniel Andrews said while “everybody would like to pay less stamp duty,” it helps fund essential public services, including wages for teachers, nurses, and police.
Suppose you want to discuss the possibility of purchasing a commercial property. Don’t hesitate to contact us today regarding the tax implications of mergers and acquisitions or investment opportunities.