For Practitioners

CIPT Practitioner Risk Guide

Due diligence checklists, section 32 disclosure obligations, and risk management guidance for legal and tax professionals advising on commercial property transactions.

At a Glance

CIPT creates significant new due diligence obligations for practitioners advising on commercial property transactions.
Practitioners must obtain a property clearance certificate on every commercial property acquisition — there is no publicly searchable SRO register of properties that have entered the reform.
Section 32 vendor's statements must disclose CIPT reform status, TCV Transition Loan details, and CIPT commencement date.
SMSF clients require specialist advice — the TCV Transition Loan is unavailable to SMSF trustees.
The 30-day change of use notification obligation is a critical ongoing compliance requirement for property owners.
Anti-avoidance provisions impose significant penalties for artificial arrangements designed to avoid CIPT.

Due Diligence Checklist — Purchaser's Solicitor

The following checklist should be completed on every acquisition of commercial or industrial property in Victoria. Items marked as critical represent minimum due diligence requirements.

Check the property's AVPCC on the council rates valuation noticeCritical

Apply for a property clearance certificate from the SRO (owner, purchaser or mortgagee may apply, fee payable). A purchaser cannot rely on a certificate obtained by the vendor — obtain your own.Critical

Note: A clearance certificate that is silent on CIPT reform status does not confirm the property has not entered the reform — the SRO may identify reform entry after the certificate is issued (Note 6, SRO Clearance Certificate Notes). Make direct enquiry of the vendor and review the section 32 statement.Critical

Check the entry date — calculate when CIPT will commence (entry date + 10 years)Critical

Confirm whether a TCV Transition Loan is secured over the property (check the title)Critical

If a TCV Transition Loan exists, obtain a payout figure and arrange discharge at settlementCritical

Review the section 32 vendor's statement for CIPT disclosures

For mixed-use properties, assess whether the qualifying use is the sole or primary use

If the client is an SMSF trustee, advise on the TCV Transition Loan ineligibilityCritical

Consider whether the transaction involves associated persons and whether aggregation applies

Check whether the transaction is pursuant to a pre-1 July 2024 agreement (which would prevent entry)

Confirm the property retains a qualifying use — review current use and any planned changes

Advise the client on the 30-day change of use notification obligation

For landholder transactions, apply the A × B formula to confirm whether the 50% threshold is met

Consider whether the transaction is a non-standard dealing that may attract duty

Section 32 Vendor's Statement — CIPT Disclosure Obligations

The Sale of Land Act 1962 (Vic) requires a vendor to provide a section 32 vendor's statement to a prospective purchaser before a contract of sale is signed. The following CIPT-related matters should be disclosed in the section 32 statement:

CIPT Reform Status

Disclose whether the property has entered the CIPT reform. If it has, provide the entry date and a copy of the property clearance certificate. Note that there is no public SRO register — the vendor's disclosure is the primary source of this information for a purchaser, supplemented by the purchaser's own clearance certificate application.

TCV Transition Loan

Disclose the existence of any TCV Transition Loan secured over the property, including the amount outstanding and the terms of the loan. The statutory charge must be disclosed as an encumbrance.

CIPT Commencement Date

Disclose the date on which CIPT will commence (entry date + 10 years). This is material information for a purchaser assessing the ongoing cost of ownership.

Change of Use Risk

If the property has a mixed use or the qualifying use is marginal, disclose this risk. A purchaser should be aware that a change of use may cause the property to exit the reform and attract stamp duty on the next transfer.

Annual CIPT Liability

Provide an estimate of the annual CIPT liability based on the current site value (1% of site value). This assists the purchaser in assessing the ongoing cost of ownership.

Key Risk Areas for Practitioners

High Risk

Pre-1 July 2024 Agreements

A transaction pursuant to an agreement entered into before 1 July 2024 will not be an entry transaction. Carefully review the date of any option, contract, or arrangement. A right of first refusal does not constitute an 'arrangement' for this purpose.

Critical Risk

SMSF Acquisitions

SMSF trustees cannot access the TCV Transition Loan. The statutory charge contravenes SISR Regulation 13.14. Advise SMSF clients to fund stamp duty from the fund's own resources and seek specialist SMSF legal and financial advice.

Medium Risk

Mixed-Use Properties

For properties with multiple AVPCCs, the qualifying use must be the sole or primary use. This is a factual determination by the Commissioner. Consider seeking a private ruling if the position is uncertain.

Medium Risk

Change of Use After Entry

If a property changes from a qualifying to a non-qualifying use, the owner must notify the SRO within 30 days. Failure to notify attracts penalties. Advise clients of this ongoing obligation at the time of acquisition.

Medium Risk

Non-Standard Dealings

Transfers between associated persons for inadequate consideration may attract duty. This includes gifts, transfers to related entities, and transactions below market value. Seek specific advice before any non-arm's length transfer.

Medium Risk

Aggregation of Interests

Interests of associated persons may be aggregated to meet the 50% threshold. This can have unexpected consequences where multiple parties are acquiring interests in the same property. Analyse all related acquisitions carefully.

Key Legislation and Resources

Primary Act

Commercial and Industrial Property Tax Reform Act 2024 (Vic)

Land Tax Act

Land Tax Act 2005 (Vic) — as amended

Duties Act

Duties Act 2000 (Vic) — as amended

SRO Guidance

SRO — Commercial and Industrial Property Tax

TCV Loan Information

Treasury Corporation of Victoria — Transition Loan

SMSF Compliance

SISR Regulation 13.14 — Charges over SMSF assets

Need Specific Advice?

Hayton Kosky Lawyers

Specialist commercial and property law advice for CIPT transactions, SMSF acquisitions, and complex due diligence.

(03) 9557 3355

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