A commercial property transaction is a transaction where the relevant property will be used, wholly or partly, for commercial purposes. Commercial purposes include industrial, business or retail use of property, including property with mixed uses. Examples of commercial properties and non-commercial properties include:
Commercial purposes don’t include:
Meaning of ‘used or will be used’, ‘partly and wholly’
This refers to the purchaser’s proposed use of the property, and whether the property will be fully, or only partly used for a particular purpose.
The use or proposed use may not necessarily be the permitted use as specified in a Crown lease.
The following scenarios are examples where a property is used or will be used by the purchaser, partly or wholly, for commercial purposes. In each of these scenarios, the new Commercial Transfer duty rate will be used in calculating the duty amount payable.
1. Mr Smith buys land on which there is an existing office building.
2. Mr Jones buys land on which there is an existing building comprised of a suite of offices on the ground floor, and three levels of apartments on levels one, two and three.
3. Ms Chen buys land on which there is an existing farm. She plans to build chalets on part of the land from which to run her bed and breakfast business, while retaining the remainder of the land as a farm.
4. Baker Pty Ltd buys an old warehouse with the intention of converting it into an apartment tower and shopping complex.
Declaring your land use – transactions from 18 September 2017
In 2017, the ACT Government introduced the Barrier Free model as part of its tax reform. It applies to transactions which happen on or after 18 September 2017.
Under the Barrier Free model, you have (and your agent has) 14 days to lodge your transfer instrument for title registration with Access Canberra(external site). On the transfer instrument you’ll need to tick the ‘Commercial’ box under ‘Land Use’.
This will be your declaration to the ACT Revenue Office that the land will be used wholly or partly for commercial purposes.
Remember that we will charge you the commercial level of rates if you declare a commercial land use.
Giving false or misleading information is a serious offence.
Declaring your land use – transactions before 18 September 2017
If the transaction date of the contract is on or after 7 June 2017, but before 18 September 2017, you need to declare your land use as commercial in the SmartForm . The transaction date is the date of the grant, transfer or agreement for transfer – whichever comes first (not the settlement date).
The SmartForm must be completed:
- within 90 days of the transaction date for commercial transactions, or
- for an off-the-plan agreement, within 14 days of whichever comes first:
- the agreement is completed
- the buyer’s interest is transferred
- it’s been one year since the date of the agreement, or
- a Certificate of Occupancy and Use has been issued.
You will still need to tick the ‘Commercial’ box on the transfer instrument when you lodge it for registration.
Commercial duty rate for transactions from 6 June 2018
Value of Commercial Property
|less than or equal to $1,500,000||nil|
|More than $1,500,000||A flat rate of $5.00 per $100 applied to the total transaction value|
Commercial duty rate for transactions between 7 June 2017 and 5 June 2018
Value of Commercial Property
|up to $200,000||$20 or $0.70 per $100 or part thereof, whichever is greater|
|$200,001 to $300,000||$1,400 plus $1.20 per $100 or part thereof by which the value exceeds $200,000|
|$300,001 to $500,000||$2,600 plus $1.90 per $100 or part thereof by which the value exceeds $300,000|
|$500,001 to $750,000||$6,400 plus $2.39 per $100 or part thereof by which the value exceeds $500,000|
|$750,001 to $1,000,000||$12,375 plus $3.15 per $100 or part thereof by which the value exceeds $750,000|
|$1,000,001 to $1,499,999||$20,250 plus $3.40 per $100 or part thereof by which the value exceeds $1,000,000|
|$1,500,000 and over||A flat rate of $5.00 per $100 applied to the total transaction value|