Entry Logic Hub
When and How a Property Enters the CIPT Reform
CIPT does not apply automatically. A property enters the reform only when a specific entry event occurs on or after 1 July 2024.
At a Glance
- CIPT is triggered by an 'entry transaction', 'entry consolidation' or 'entry subdivision' — not automatically from 1 July 2024.
- The transaction must occur pursuant to an agreement entered into on or after 1 July 2024.
- The property must have a qualifying use (AVPCC 200–499 or 600–699).
- The transaction must relate to a qualifying interest of 50% or more in the property.
- Duty must be chargeable on at least 50% of the property's unencumbered value.
Entry Transactions
An entry transaction is the most common way a commercial or industrial property enters the CIPT reform. It is a transaction that meets all of the following requirements:
Date
The transaction occurs on or after 1 July 2024 pursuant to an agreement entered into on or after 1 July 2024.
Qualifying Use
The property has a qualifying use (AVPCC 200–499 or 600–699) on the date of the transaction.
Qualifying Interest
The transaction relates to a qualifying interest of 50% or more in the property (alone or aggregated).
Duty Threshold
Duty is chargeable on at least 50% of the unencumbered value of the property (the D ÷ U × 100 formula).
Qualifying Dutiable Transactions
Most dutiable transactions qualify, including a standard transfer of property. However, the following are excluded:
Qualifying Landholder Transactions
A relevant acquisition in a landholder (private company or unit trust) can also be an entry transaction if it relates to a 50% or greater interest in the landholder's property. The following are excluded:
Aggregation of Interests
Separate interests acquired by the same person or associated persons may be aggregated to determine whether the 50% qualifying interest threshold is met. Aggregation applies where:
- The dutiable transactions would be aggregated under section 24 of the Duties Act; or
- The dutiable transactions occur within 3 years and the transferee under each is the same person or associated persons.
Associated persons include relatives, related bodies corporate, trustees of trusts with a common beneficiary, and persons associated with the same person. However, associated persons may be disaggregated if the Commissioner is satisfied their interests were acquired and will be used independently and not for a common purpose — except where the association arises from being related bodies corporate.
The Landholder Interest Formula
A × B
- A = The interest acquired in the landholder on which duty is chargeable
- B = The interest the landholder holds in the land at the time of the relevant acquisition
The result must be 50% or more for the transaction to be an entry transaction.
The Duty Eligibility Formula
D ÷ U × 100 ≥ 50%
- D = The dutiable value of the land subject to the qualifying dutiable transaction
- U = The unencumbered value of the whole of the land at the time of the transaction
Note: The 50% regional Victoria duty concession is disregarded when applying this formula.
Entry Consolidations & Subdivisions
Entry Consolidation
Where multiple parcels of qualifying use property are consolidated after 1 July 2024, the consolidated parcel enters the reform on the earliest date any constituent parcel entered the reform — but only if 50% or more of the consolidated area is already tax reform scheme land.
Entry Subdivision
Where a parent lot that has entered the reform is subdivided into child lots, each child lot inherits the parent lot's entry date. The 10-year transition period runs from the parent lot's original entry date, not from the date of subdivision.
Pre-1 July 2024 Agreements
A transaction will not be an entry transaction if it occurred pursuant to an agreement or arrangement entered into before 1 July 2024. An "arrangement" requires a concerted plan between parties that is captured in writing, sufficiently certain, and envisages the specific transaction. A pre-emptive right such as a right of first refusal does not constitute an arrangement for this purpose.
Example — Deceased Estate
On 1 December 2024, the legal personal representative of a deceased person transfers a commercial property to a beneficiary in accordance with the will. The transfer is a dutiable transaction but is exempt from land transfer duty under the deceased estate exemption. Because the transaction is not chargeable with duty, it is not a qualifying dutiable transaction and therefore does not cause the property to enter the CIPT reform.