I am considering another purchase and my solicitor has noted that the vendor is seeking the reimbursement of land tax paid. As we are at the start of the calendar year this would equate to 10/12 of the amount paid.
If I am not liable for land tax, can I negotiate that the vendor wear this cost (and claim it back post disposal) or do I have to pay it and claim it back? If it throws me over the land tax threshold, is it better to pay it and seek adjustment or do I wear the whole lot?
[bump:]
Hello Scott
Interesting questions and by the lack of answers it may be that most people on the forum, like myself, have never been asked for an adjustment on land tax. I guess that's not surprising on residential property as we are usually buying someones PPOR which, in Vic. at least, is exempt from land tax.
I guess your accountant and solicitor will be the best people to answer your questions but here are a couple of my thoughts.
I would imagine that the vendor is only entitled to an adjustment based on a single holding irrespective of how much they actually had to pay. If they are then entitled to a rebate for the rest then it is from the SRO and not you.
Having said that I have been searching the Vic. SRO data base to see how you can claim any land tax back if you sell a property. I haven't been able to find any information on this which either means I don't know how to search ( very likely) or it is not possible.
I would be interested to hear what you learn in this area.
Sorry not to be able to help as I find you always very helpful and knowledgeable with your answers.
Cheers
ElkaSorry. Double post.
Thx Elkam, rang the OSR this morning, PITA……They will only deal with the owner of the land (a bit hard if you are investigating). However, they levy landtax on the owner as at 31.12.XX ie the vendor. As the vendor has paid/still to pay then the vendor is passing on the cost to ourselves. I now have to negotiate down from this position – based on a single holding it should be nil.
Hello Scott
Have you asked the vendor how much the land tax is that they want reimbursed?
If you say that as a single holding the land tax should be nil ( i.e. land value under +/- $200K in Vic) then it may be better to "give" them the land tax and concentrate on getting the price of the property reduce by an extra few thousand.
Give a little, get a lot?
Good luck
ElkaHi Scott,
In my case the boot is on the other foot. I sold 2 properties, one in March 07 the other in July 07. I just recieved a land tax bill for $1700. When I called the number on the bill to say I no longer owned them I was advised that it is ownership as at the 31st Dec. I was also advised that it is not possible to pass on this tax to the new owner, either during contract or retrospectively. So I find it interesting that you have been asked to contribute to this. I was told in no uncertain terms that I have to wear the bill
. She then cheerfully informed me that I would not get a bill in Jan of 2008!!!!Ahhh such is the life of those that invest in property!!!!
Cheers
TammyHi
Everything is negotable.
Most vendor's solicitors and conveyancers mark the contract that it is subject to adjustment f Land Tax. In many cases there is no Land tax so your concerns may not be justified. Ask you solicitor to ask the vendor's solicitor if the land is subject to payment of Tax.
John Neilen
Licensed Property Convveyancer
. She then cheerfully informed me that I would not get a bill in Jan of 2008!!!!
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