Hi there,
I am new to the world of vendor finance and the was wondering whether any one of the experts on here knows anything about the payment of land tax by the a vendor that sells a parcel of land under an instalment contract?
If there is an exemption from the OSR (in NSW), do you have any references to information that might clarify the ruling? In addition, what are the steps that a vendor (who is listed on the title as the owner) must take in order to be granted an exemption (if applicable under an instalment contract sale) by the OSR to pay the land tax.
Any help would be much appreciated.
Liam.
Hi Liam
The NSW Government consider land is disposed of when exchange of contracts takes place. With an Instalment Contract (IC) exchange of contracts does take place but, of course, the title stays in the vendor's name until completion of the Contract.
As vendors under an IC, we put in a Land Tax variation form, found at:
http://www.osr.nsw.gov.au/lib/doc/forms/olt002.pdf
and the land tax liability moves to the purchaser under the IC. I've got to admit it is nice to see our land tax liability disappear in this manner
Just to clarify, this is not the case with a Lease/Option and in Vic the Government doesn't regard the property as having been disposed of until title transfers.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thanks for the Response Paul,
That is really useful information. Do you wait for the OSR to issue you with a land tax assessment or do you send a variation to ownership form in once you have on-sold the property under an instalment contract to a new owner?
Thanks again,
Liam.
Hi Liam
We send in the variation once the IC has "exchanged" and the new buyers have taken possession. At this point our solicitor, sends us a letter outlining all that has taken place, along with a variation form and instructions on how to fill it out.
We complete the variation form, send it to the OSR and they come back with a letter requesting more information. We forward this letter from the OSR to our solicitor and he supplies the OSR with the information they need..
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
