Buying commercial property in Victoria: paying the stamp duty under the new CIPT rules, and the fast ways to fund it

Most owners buying a shop, office or warehouse in Victoria have heard that stamp duty on commercial property is “being abolished”. That’s half right. For most buyers it hasn’t gone yet. If you’re the first buyer of a qualifying property since the reform began, you’ll probably pay duty one more time. Then you have three ways to fund it, and each one runs on a different clock.

This guide covers what the reform means for the money you need at settlement, the catch in the government’s transition loan, and which short-term structure fits if the duty money isn’t ready on the day.

What changed for commercial property in Victoria?

From 1 July 2024, Victoria began moving commercial and industrial property off stamp duty and onto an annual tax. The State Revenue Office explains that a property enters the reform only when it has a qualifying use and goes through an “entry transaction” on or after that date. It doesn’t happen automatically.

Here’s the sequence in plain terms:

1. The entry transaction. The first qualifying sale from 1 July 2024 is a normal dutiable purchase. Duty has to be payable on at least 50% of the property’s market value, and the buyer pays it.
2. The 10-year transition. Nothing changes for 10 years, apart from land tax, which carries on as usual.
3. Commercial and industrial property tax (CIPT) starts. It begins in the first calendar year after the 10 years end. According to the SRO’s CIPT guide, the rate is generally a flat 1% of the site value each year while the property keeps a qualifying use.
4. Later sales. A future buyer of the same property may be exempt from duty, during the transition or after it. The SRO is clear that this is not automatic. It depends on the property keeping a qualifying commercial or industrial use, plus conditions that differ by type of transaction.

Qualifying uses include retail premises, offices, warehouses, factories and vacant commercial or industrial land. These are usually identified by the property’s land-use classification code in its latest valuation.

Which duty position is your purchase in?

Before you work out funding, find out which of three positions you’re in. The answer changes the settlement figure, sometimes by a lot.

Your purchase	Duty at settlement	What to check
First qualifying sale since 1 July 2024 (entry transaction)	Full duty payable, and the 10-year clock starts with you	Whether you’re eligible for the TCV transition loan, and whether to apply
Property already entered the reform, and the conditions are met	May be exempt from duty	Your conveyancer confirms the exemption with the SRO. Don’t assume it
Contract signed before 1 July 2024, or the property doesn’t qualify	Duty under the old rules	The usual duty estimate from your conveyancer

Ask your conveyancer to confirm your position in the first week after signing, not the last. If you’ve budgeted for an exemption that doesn’t apply, the shortfall arrives at the worst possible moment.

How does the TCV transition loan work, and what’s the catch?

The Victorian Government offers a transition loan through the Treasury Corporation of Victoria (TCV) so buyers don’t have to pay the entry duty in one hit. Going by TCV’s property tax reform page, the main features are:

• Purpose: it covers the land transfer duty on the entry transaction, up to the duty payable, capped at $1.93m.
• Repayment: 10 equal annual instalments of principal and interest, set upfront, with no interest-only period and no redraw.
• Eligibility: you must be the first purchaser, under a contract signed on or after 1 July 2024. The property must have a qualifying use and a sale price of no more than $30m. Loan-to-value can’t exceed 75%, and TCV assesses whether you can service the loan.
• Approval first: you need finance approval from an approved lender, which TCV describes as an APRA-regulated bank or a qualifying ASIC-licensed lender. You apply online with the contract, a property clearance certificate and proof of that approval.
• Timing: you apply before settlement and allow “sufficient time” for assessment. TCV pays the duty at settlement through PEXA.
• Security: TCV takes a first-ranking statutory charge over the land, ranked ahead of all other encumbrances.

That last point is the catch for anyone mixing funding sources. If TCV’s charge sits in front of everything else, any other lender on the same title is behind it, including your bank. Banks that are approved lenders know how to handle this. A private lender lending over the same premises is a different question, and TCV’s eligibility rules may not cover that arrangement at all. Ask TCV directly before you build a plan around it.

For speed, the more practical problem is the timetable. The transition loan needs your purchase finance approved first, then its own assessment, and both have to finish before settlement. If the bank is running late, the transition loan runs late with it.

Three ways to fund the duty

Most Victorian premises buyers end up in one of these lanes.

1. Cash or business reserves. It’s the simplest option, with no extra security and no application. But it drains the working capital the business will need for the move, the fit-out and the first few months in the new space.

2. The TCV transition loan alongside your bank. This suits buyers whose bank approval is solid and early, with weeks to spare before settlement. It’s a long, structured repayment rather than a quick fix.

3. A short-term private loan, sized to the gap. This fits when the duty money is short, the bank is slow, or the transition loan won’t be ready in time. In Victoria, the quickest version is usually a caveat loan over another Victorian property, such as your home or an investment property. It sits behind the existing bank loan on that property and leaves the premises purchase alone. If the bank won’t fund the purchase at all by the date, a short-term first mortgage over the premises itself can settle the whole purchase, with the bank refinancing later. Our guide to settling premises when the bank is ten days behind walks through that version day by day.

If you’d like a real person to tell you which lane fits your contract, send us the settlement date and the duty figure. It takes about a minute.

Why a caveat over other property is often the cleanest fix

When the only problem is the duty, there’s a good case for keeping the short-term money off the premises entirely.

• The purchase stays simple. Your bank’s mortgage over the premises doesn’t change, and nothing has to compete with a statutory charge.
• It’s fast. Caveat loans don’t need a registered mortgage, so the paperwork is lighter. Property-secured amounts from $20k to $250k can be possible the same day, and up to $5m within 24 to 48 hours once the valuation and title checks are done.
• The size fits the problem. You borrow the duty and costs, not the purchase price.

The trade-off is that short-term loans are measured in months, not decades. You need a believable way to repay it, such as a property sale already under way, a top-up from your bank once the premises are valued, money due to the business, or a refinance. Before you commit, run your plan through our exit date check. If your other property is outside Victoria, the same job is done with a short-term registered second mortgage, usually just as quickly.

An illustrative example

Made-up scenario with rounded numbers. Your conveyancer will calculate the real duty.

A joinery business is buying the Bayswater factory it has leased for six years. The price is $1.6m. It’s the first sale of the property since 1 July 2024, so this purchase is the entry transaction. The conveyancer estimates the duty at about $88,000.

The bank has approved 70% of the price, and the owners have the deposit. They had planned to use the TCV transition loan for the duty. But the bank’s formal approval landed just eight days before settlement, which leaves no realistic time for a separate transition loan assessment.

Their home in Ringwood is worth $1.4m, with $520,000 owing to their bank. A caveat loan of $110,000 covers the duty and settlement costs, bringing total lending on the home to roughly 45% of its value. It funds four days before settlement. The factory settles on the contract date with the bank’s mortgage only, and the caveat is repaid a few months later from an equipment sale and a business account that rebuilds over the next two quarters.

The 10-year clock started with their purchase. Their accountant has noted the year the annual CIPT will begin, so it doesn’t arrive as a surprise.

What to line up in the first 48 hours after signing

• Confirm the duty position with your conveyancer: entry transaction, exempt, or old rules.
• Get the duty estimate in writing, including any regional concession. A regional concession only works under the reform if the duty still payable meets the 50% requirement.
• Ask your bank for a realistic approval date, not a hopeful one.
• If you want the transition loan, call TCV now and confirm your eligibility and the documents you’ll need.
• Pick your fallback. Gather details of any other property you could offer as security, including its address, owners and current loan balance, then check your room with our borrowing calculator.

If the shortfall turns out to be bigger than the duty, for example because a valuation came in low, our settlement shortfall page covers that situation. Our commercial and industrial property page explains how lenders read premises as security.

Get the premises settled, then get on with business

Buying your own premises is a big step, and a duty bill shouldn’t be the reason it slips. We work with Victorian property every day, and a caveat behind your bank is exactly the sort of short, tidy job a duty gap calls for.

The enquiry takes about 60 seconds, and there’s no credit check when you first enquire. Your details aren’t passed around a long list of lenders, so your phone won’t start ringing off the hook. A real person looks at your purchase, your other property and your settlement date, then calls you to talk it through. Please fill the form in accurately. The property’s address and state, the contract price, the duty figure and the settlement date tell us which structure to put up first.

See if you qualify →