8th August 2024 | Tax
The Victorian Government is gradually eliminating stamp duty (land transfer duty) on commercial and industrial properties and replacing it with an annual tax called the ‘Commercial and Industrial Property Tax’ (CIPT).
Transition Loan Program
Starting July 1, 2024, eligible first-time buyers of commercial or industrial properties affected by the reform can use a government transition loan to cover the upfront stamp duty cost.
The Treasury Corporation of Victoria will offer this loan with standard commercial terms, including a fixed interest rate. This rate is made up of a base rate (reflecting government borrowing costs) plus an annual risk margin set by the Treasurer (2.25% for 2024-25). Borrowers will have fixed annual payments over 10 years, providing them with financial certainty. The loan will be secured by a first-ranking charge on the purchased property.
Additional details about the loan’s key features, including an example interest rate, are available below.
Here is a summary of the key terms for the Transition Loan. Purchasers should review the full terms and conditions carefully before applying for a Transition Loan.
More detailed information on the Transition Loan Agreement’s key terms is provided below.
|
Term |
Summary key terms |
|
Lender |
Treasury Corporation of Victoria (TCV). |
|
Loan Amount |
Eligible applicants can apply for a loan equal to or less than the amount of stamp duty payable on the purchase of an eligible property. The loan amount will not exceed $1.93 million. There is no minimum loan value. |
|
Interest Rate |
The interest rate will be fixed for the life of the loan and will be equal to a base rate (based on government borrowing costs) plus a risk margin determined annually by the Treasurer (set at 2.25 per cent for 2024-25), provided the repayments are made annually in accordance with the terms of the Transition Loan. |
|
Loan Term |
10 years. |
|
Interest Only |
No. |
|
Redraw |
No. |
|
Secured |
Yes, by a first ranking statutory charge. |
|
Payment Frequency |
Annual. |
|
Repayment Instalments |
10 equal annual payments (of interest and principal) to repay the loan in full. |
|
Application Fee |
Nil. |
How do I apply?
To ensure your application has addressed all the necessary requirements, please make sure that:
-
the applicant and property meet the eligibility requirements
- You have all the information required to complete your application.
To begin your application for a Transition Loan, click on the button below.
Once you have submitted your application and all required documents, TCV will start assessing it and contact you if anything else is required for us to consider it. If you have any questions when completing the application online or require any assistance, please contact us on 1300 659 430 or via email at loanenquiries@cipt.tcv.gov.au.
1. Submit your application
After you submit your completed application, we check if all necessary information and documents have been provided. We will contact you if anything is missing.
2. Your application is assessed
Your application will be assessed in according with the eligibility criteria and credit criteria.
Please allow sufficient time for your application to be assessed in advance of the proposed settlement of your property purchase.
3. Decision and documentation
If your application is approved, we will prepare documents for signing including the Loan Agreement and a Direct Debit Agreement in relation to payments of the annual instalments.
4. Settlement
TCV will arrange a settlement with the solicitor/conveyancer acting for you on the property purchase. This will require us to participate in the settlement of the property purchase (in PEXA), as the loan amount will be paid at settlement.
To check your eligibility and Fact sheets, Click here
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