Lump-sum stamp duty phase out: Wind farm hosts excluded

An annual tax on commercial and industrial properties will replace upfront stamp duty. But farmers hosting wind-farms will be excluded.

The July 1 replacement of up-front stamp duty with an annual commerical and industrial property tax will not apply to farmers hosting wind turbines.

Farmers hosting wind farms have been excluded from the Victorian Government’s new Commercial and Industrial Property Tax reform, which from July 1 replaces lump-sum stamp duty with an annual tax set at one per cent of the site’s unimproved land value.

Business groups have welcomed the move, but members of the Wind Farm Living Group have raised questions on whether the tax reform would apply to landholders who derive the majority of their income from hosting wind farms – an industrial use.

Victorian Department of Treasury and Finance CIPT fact sheets state a primary use test will be applied to mixed-use properties to determine if the tax applies on a property purchase.

“The sole or primary use test can be in reference to factors such as the land or floor area of each use; the relative intensity, economic and financial significance of each use, and the length of time of each use, with ‘primary’ ascertained by the Commissioner of State Revenue,” the DTF fact sheet states.

But when questioned on whether the tax would apply to landholders, who derived the majority of their income from leasing land to a wind farm developer, a DTF spokesman said it “would not bring a property into the reform.

“Any property with a land tax exemption will also be exempt from CIPT - ...(if) it is a principal place of residence (someone’s home) or primary production land.”

Asked if renewable energy developments -- wind, solar and battery -- were exempt from CIPT, the DTF spokesman said “there is no specific exemption from CIPT for renewable energy developments”.

But he said that the renewable development would not be brought in under the new tax regime if it was “eligible for a land tax exemption”.