Vic land tax on PPOR, bought from a landlord?

A colleague of mine has just bought a new PPOR in Melbourne. The property is currently tenanted and therefore the owner pays land tax.

Her conveyancer is telling her that she has to pay the remainder of the 2010 land tax assessment, even though it's her genuine PPOR? She will settle in about May/June.

I've seen clauses in contracts before that state that the purchaser agrees to pay the land tax bill for the remainder of the asessment year upon settlement, but I've always assumed that is only relevant is the property continues to be used as an investment?
 
Hmmmm doesn't sound right to me. Sounds like the vendor is trying it on.

I bought a IP about 18 months ago and the vendor had built up quite a land tax bill of around 26K (from memory) and tried to get us to take over the debt. My conveyancer who looks very meek and mild but bites like a rotwiler, was very quick to quash that demand! (Anyone in Newcastle need a conveyancer, I'd highly recommend him!)


Although this IP is in NSW, so Vic may be different.


Still, it doesn't seem right. How experienced is the conveyancer? I'd be getting another opinion and possibly forking out for a solicitor instead of a conveyancer, could save your friend big $.
 
That sounds like bull**** to me. The following is copied from the state revenue office land tax clearance certificate that my lawyer sent to me when I last bought a couple of years ago. It told us how much money the vendor owed SRO for land tax so we just made a cheque for that amount to SRO and deduct it from the amount due to the vendor at settlement in the adjustment.

"NOTES TO CERTIFICATES UNDER SECTION 105 OF THE LAND TAX ACT 2005
1. Under Section 96 of the Land Tax Act 2005 (the Act), land tax is a first charge on the land to which it relates and should the vendor default, payment will be obtained from the purchaser. The purchaser should take into account the possibility that the vendor may default where land tax has been assessed but not paid.
...
3. The amount of land tax on this certificate relates to the amount of land only and not to any future liability or the tax status of the land.
...
10. If the vendor refuses to be bound by an amount stated by the Commissioner and does not agree to the amount being withheld and remitted at settlement, the purchaser cannot rely on such refusal as a defence to an action by the Commissioner to recover the outstanding amount from the purchaser under Sections 96 or 98 of the Act."

We did not have to pay a single cent of land tax ourselves. I think your colleague need to get a better conveyancer or better yet get a proper lawyer.
 
That sounds like bull**** to me. The following is copied from the state revenue office land tax clearance certificate that my lawyer sent to me when I last bought a couple of years ago. It told us how much money the vendor owed SRO for land tax so we just made a cheque for that amount to SRO and deduct it from the amount due to the vendor at settlement in the adjustment.

Yes, good point. You jogged my memory. We had to have a cheque made out to the NSW SRO for the amount owed BUT it came off the agreed purchase price. We did not pay any extra on top of the agreed price.

Maybe this is what the conveyancer means and your friend has misunderstood. Either way I would be getting it absolutely crystal clear that I wasn't paying any extra on top of the contract price.
 
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