The State Taxation Acts Amendment Act 2019 (Act) received Royal Assent on 18 June 2019. Among other taxation changes, the Act introduces a transfer duty (formerly known as stamp duty) concession for acquisition of commercial and industrial properties in regional Victoria.

The concession applies to contracts entered into on or after 1 July 2019.

What qualifies as commercial and industrial property

To be eligible for the concession, the property being acquired must fall into one of the accepted categories in the Australian Valuation Property Classification Code (AVPCC). The accepted codes include:

  • retail;
  • office premises;
  • car parking;
  • advertising or public information screens;
  • manufacturing; and
  • warehouses and storage yards.

This is not an exhaustive list but note that it does not include agricultural land..

The property is to be used solely or primarily for the qualifying use, so mixed use properties may be eligible. The use must be for a continuous period of at least 12 months, commencing within 2 years after acquisition. Failure to comply may result in a reassessment of duty at the non-concessional rate.

The concession can also be applied to aggregated transactions if at least one of the transactions is eligible for the concession. The Act sets out a formula for calculating the pro rata application of the concession to an aggregated transaction.

What qualifies as regional Victoria

The Act defines regional property to include property located in one of the municipal districts listed in Schedule 1 of the First Home Owner Grant Act 2000, which includes 48 Council areas, including the cities and surrounds of Ballarat, Bendigo, Geelong, the areas surrounding Gippsland, the Bass Coast and Macedon Ranges.

Gradual increase of concession

The concession is to be gradually increased between 2019 and 2023. Contracts entered into between 1 July 2019 and 1 July 2020 will be 10%. For Contracts entered into from 1 July 2020 to 1 July 2021 the concession will be 20%, continuing at 10% increase annually until a 50% increase will apply for Contracts entered into from 1 July 2023.

Restrictions

This concession cannot be applied in conjunction with any other concession. If the property acquisition is eligible to receive another exemption or concession under the Duties Act 2000, the purchaser must elect at the time of stamping which concession to apply.