Hi, we sold an IP at auction in December in VIC.
Settlement will be later in February.
Question: who will pay the land tax bill, us or buyer?
Thanks!Ask your solicitor, but I would assume it is dealt with like Council rates, being apportioned according to what proportion of the year each owner has the property, and accounted for at settlement.
Yes, no and maybe Trakka. As land tax is levied on the owner as at 31/12/0X then the vendor is still the owner of the property (CGT works on the contract date however land tax works on the owner as at that date).
So, if you had marked the contract for sale with a notation that a land tax adjustment was required, then the purchaser would be repaying the balance of the land tax assessed (from the date of settlement). If there is no adjustment, then, you will get an invoice in a couple of months seeking payment.
Is it due to be paid before or after settlement date??????
justgjt wrote:Is it due to be paid before or after settlement date??????Shouldn't make much of a difference justgjt, if there is no recovery/clawback provision. You could still get the purchaser to pay this directly and reduce the amount you get at settlement.
Thanks Scott No Mates. Could you confirm that I got this clear :
– Landtax 2007 (which was assessed at 31.12.06) and which we are paying in installments: need to continue to pay remaining installments
– Landtax 2008 (which was assessed at 31.12.07) as we did not put a provision in sales contract: we as sellers will have to pay this as well, although this invoice will only be send out in couple of months (OUCH)
CheersYes, that sums it up.
Hello Scott
Did you check with your solicitor that asking for an adjustment on land tax when you sell a property is legal? Tammys post on your thread about this topic was pretty clear.
Thanks
Elkatammy wrote:Hi 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
TammyOn the NSW contract for sale (2005) there is a box noting whether or not the following are applicable:
GST Y/N
Margin Scheme
Why GST is not applicable – Residential/Going Concern etc
Land Tax Recovery Y/NRaising the land tax issue means may get reimbursed for some of what you have paid out (balance to end of calendar year) – this is perfectly legal to request & or reject. (If no-one queries it, then you will get reimbursed – as I am getting no benefit from paying someone else's land tax bill, I refuse to reimburse the vendor).
Your solicitor will ask for a Land Tax Clearance Certificate on the day of settlement to ensure that there is no land tax outstanding as at the day of settlement. In Tammy's case, it would seem like they had exchanged contracts and no Land Tax Clause was used.
Thanks Scott. I wonder if that's true for all states.
. She then cheerfully informed me that I would not get a bill in Jan of 2008!!!!You must be logged in to reply to this topic. If you don't have an account, you can register here.
