Stamp Duty Threshold on Commercial Property Increased to $1.6 Million

The times – they are a-changin!

From 1 July 2021, the ACT Government announced that commercial property purchases valued at $1.6 million or less will incur no stamp duty in the ACT.

Where the value of the purchase is greater than $1.6 million, a flat rate of 5% applies.

All eligible purchasers must ensure that the commercial property will be used, wholly or partly, for commercial purposes. These include industrial, business or retail use of the property.

What about GST?

Glad you asked! Duty is always calculated on the GST-inclusive price of commercial property.

Therefore, your purchase must be:

  • $1,454,545.50 excluding GST or less, if the purchase is a taxable supply and subject to GST
  • $1.6 million or less, being GST-free as a going concern

Beware your going concern purchase. If it turns out that the purchase is not GST-free for any reason, the Contract for Sale may operate to require the Buyer pay GST to the Seller in addition to the purchase price.

If this increases the total GST-inclusive purchase price to exceed the $1.6 million threshold, duty is payable at the full 5%. Additionally, the Buyer will have an obligation to report this change to the ACT Revenue Office, even if the parties have already received a nil duty assessment.

Made a transaction before 1 July 2021?

For transactions from 6 June 2018 to 30 June 2021, purchasers do not have to pay any conveyance duty for commercial properties valued at $1.5 million or less. If greater than $1.5 million, a flat rate of 5% applies.

Commercial Property – It’s Our Thing!

Commercial property can be a great opportunity to invest or protect your business by owning your own premises.

The nature of commercial property purchases is that they are entirely caveat emptor (Buyer beware!). Because the Seller of commercial property is required to disclose very little, it is so important to have an experienced, dedicated legal team on your side, to ensure you have the right advice and due diligence completed before you purchase.

If you’re ready to take the leap and would like a multi-awarded team to assist you with this next fantastic adventure, contact us now!

CLICK HERE to start your property journey!