Obligations & Administration
CIPT Administrative Obligations and Compliance
Once a property enters the CIPT reform, ongoing administrative obligations apply — including change of use notifications, assessments, and objection rights.
At a Glance
- Property owners must notify the SRO within 30 days if the property's use changes from a qualifying to a non-qualifying use.
- The SRO issues annual CIPT assessments based on the Valuer-General's site value at 1 January of the assessment year.
- Taxpayers have 60 days from the date of assessment to pay CIPT and 60 days to lodge an objection.
- A property clearance certificate confirms the property has entered the reform and is available from the SRO.
- Anti-avoidance provisions apply to arrangements designed to avoid CIPT or the entry into the reform.
- Penalties apply for failure to notify a change of use, late payment of CIPT, and other contraventions.
Change of Use — 30-Day Notification Obligation
If a property that has entered the CIPT reform ceases to have a qualifying use, the registered proprietor must notify the SRO within 30 days of the change of use. This is one of the most critical ongoing obligations under the reform.
30-Day Deadline — Strictly Enforced
The 30-day notification period runs from the date the property's use changes — not from the date the owner becomes aware of the change. Failure to notify within 30 days attracts a penalty. The SRO may also impose interest on any unpaid duty that becomes payable as a result of the change of use.
Consequences of a Change of Use
During Transition Period
If the property ceases to have a qualifying use during the 10-year transition period, the duty exemption for future transfers is lost. The next transfer of the property will attract stamp duty at the standard rate. The property may re-enter the reform on a subsequent qualifying transaction.
After CIPT Commences
If the property ceases to have a qualifying use after CIPT has commenced, CIPT is no longer payable from the date of the change of use. The property exits the reform. If the property later returns to a qualifying use, it may re-enter the reform on a subsequent qualifying transaction.
Partial Change of Use
Where only part of a property changes to a non-qualifying use, the Commissioner will reassess whether the property as a whole still has a qualifying use under the sole or primary use test. If the qualifying use is no longer the sole or primary use, the property exits the reform.
Temporary Change of Use
A temporary change of use (e.g. a property under renovation that is temporarily vacant) may not constitute a change of use if the property is genuinely being prepared for return to a qualifying use. Seek advice if the property is temporarily non-qualifying.
Property Clearance Certificate
A property clearance certificate is issued by the SRO and confirms that a property has entered the CIPT reform. It is a critical document for conveyancing purposes and should be obtained as part of due diligence on any acquisition of commercial or industrial property.
CIPT Assessments
Once the 10-year transition period has expired, the SRO will issue annual CIPT assessments. The assessment is based on the property's site (unimproved) value as determined by the Valuer-General of Victoria at 1 January of the assessment year.
Assessment Basis
1% of the site (unimproved) value at 1 January of the assessment year. For BTR properties: 0.5% for 30 years from BTR commencement.
Payment Deadline
60 days from the date of the CIPT assessment. Late payment attracts interest and penalties.
Objection Period
Objections must be lodged within 60 days of the assessment. Grounds for objection include incorrect site value, incorrect entry date, or incorrect qualifying use determination.
Objections and Reviews
A taxpayer who is dissatisfied with a CIPT assessment may lodge a formal objection with the SRO. The objection must be lodged within 60 days of the date of the assessment and must set out the grounds of objection in writing.
Grounds for Objection
An objection may be made on the grounds that the site value used in the assessment is incorrect; the entry date is incorrect; the property does not have a qualifying use; or the CIPT rate applied is incorrect (e.g. the BTR rate should apply).
SRO Review
The SRO must consider the objection and issue a notice of decision within a reasonable time. The SRO may allow, partially allow, or disallow the objection.
VCAT Review
If the taxpayer is dissatisfied with the SRO's decision on an objection, they may apply to the Victorian Civil and Administrative Tribunal (VCAT) for a review of the decision.
Valuer-General Objections
Where the objection relates to the site value, the taxpayer may also lodge a separate objection with the Valuer-General of Victoria under the Valuation of Land Act 1960. The Commissioner must then reassess CIPT based on the revised valuation.
Anti-Avoidance Provisions
The CIPT reform includes robust anti-avoidance provisions designed to prevent artificial arrangements that seek to avoid CIPT or the entry of a property into the reform.
General Anti-Avoidance Rule
If the Commissioner determines that a taxpayer has entered into a scheme or arrangement for the dominant purpose of avoiding CIPT or the entry of a property into the reform, the Commissioner may disregard the scheme and assess CIPT as if the scheme had not been entered into. The Commissioner may also impose a penalty of up to 75% of the tax avoided.
Non-Standard Dealings
Transfers between associated persons for inadequate consideration, gifts of property, and other non-arm's length transactions may attract duty notwithstanding that the property has entered the reform. The SRO will assess duty on the unencumbered value of the property.
Artificial Use Changes
Artificially changing the use of a property to avoid CIPT (e.g. temporarily converting a commercial property to residential use to exit the reform) may be disregarded by the Commissioner under the anti-avoidance provisions.
Disaggregation of Interests
Where associated persons seek to disaggregate their interests to avoid the 50% threshold, the Commissioner may aggregate the interests and treat the transaction as an entry transaction.
Penalties
Penalties for tax avoidance range from 25% to 75% of the tax avoided, depending on the nature and severity of the avoidance. Interest also applies from the date the tax was due.