Pepper Money been appointed to administer the new commercial and industrial property tax (CIPT) Transition Loan Program in conjunction with Treasury Corporation of Victoria (TCV).
This program is designed to assist Victorian businesses with the tax reform measures that have taken effect from today as stamp duty is slowly stamped out on commercial and industrial properties in the state.
Pepper Money has been engaged by TCV to assist with the administration of this new Transition Loan Program.
“We are proud to be entrusted with such an integral role in the administration of the new commercial and industrial property tax reform Transition Loan Program,” said Mario Rehayem (pictured above), CEO of Pepper Money.
In the 2023–24 State Budget, the Victorian government announced that land transfer duty (stamp duty) on commercial and industrial property will be abolished and replaced with the commercial and industrial property tax (CIPT).
This tax will apply 10 years after the property is next sold.
The reform will give prospective purchasers of commercial and industrial properties the temporary option to pay stamp duty on a property upfront (as per current standard) or apply to borrow the funds via a government transition loan.
The transition loan will allow purchasers to make annual loan repayments over 10 years, equivalent to the property’s final stamp duty liability plus interest allowing them to spread out payments over time with a fixed, market-based interest rate, calculated at the start of the loan.
Given the potential for clients to free up cash flow, the FBAA’s Steven Ragany had previously urged commercial and asset finance brokers to brush up on the reform and its implications to clients.
In a recent interview with Australian Broker, Ragany walked through the scenarios.
Detailed information on the transition loan including how to apply, loan terms and eligibility and can be found on TCV’s website.
Pepper Money has been engaged by TCV to assist with administering this new Transition Loan Program.
Rehayem said that not only is this a promising policy for Victorian SMEs, but “our involvement appropriately aligns with Pepper Money's ongoing commitment towards helping people succeed”.
“We are leveraging our expertise in credit and loan servicing, along with our in-house purpose-built technology to implement the program,” Rehayem said.
“This will include loan establishment, credit assessment, settlement, and ongoing servicing of the transition loans, as well as administration services for TCV.”
Pepper Money said the provision of a “frictionless customer experience” during credit decisioning and settlement was a core value proposition offered by the non-bank lender.
TCV transition loan applicants will have access to the end-to-end digital application experience that can be executed at their convenience at any time of the day or night.
“This technology will be integral to the TCV Transition Loan Program, leveraging Pepper Money’s experience in both building and maintaining digital platforms,” Rehayem said.
“Approved applicants will be managed using Pepper Money’s purpose-built technology solutions and experienced customer service teams.”
Pepper Money has extensive experience and sophisticated capabilities in third party servicing with over 30 third party originators who use Pepper Money to facilitate their branded loan portfolio.
Michael Larkin, CEO of TCV said, “We are very excited to be working with Pepper Money to deliver the Transition Loan Program to help benefit Victorian businesses.”
Rehayem added, “We welcome and support the reform which aligns to our mission of helping people to succeed, the transition loan spreads payments out over ten years to help Victorian businesses manage cash flow.
“The loan now offers eligible businesses greater opportunity to invest, grow and expand. The capital could be invested in expanding operations sooner, hiring more staff, or simply alleviating some of the pressures businesses are currently facing.”
Rehayem said the CIPT reform is a major change to Victoria’s tax system and industry practitioners should be prepared to support their Victorian based SME clients.
“It's crucial for finance professionals including brokers, accountants, financial planners, conveyancers, and solicitors to understand the new reform and be capable of articulating the options with their clients."
