Scenario (in Victoria) is this:
1. Seller is using a property as an investment and has paid land tax up until 31st December.
2. Buyer purchases the property to use as a Principal Place of Residence, and hence isn't subject to land tax.
3. Buyer is told he/she must pay the proportional land tax for the period between settlement and the 31st December.
4. Victoria State Revenue Office has no specific requirements for who pays in this case - it must be sorted out between the seller and buyer.
5. Only guidance is Condition 15 of the Standard Contract of Sale, which states:
15. Adjustments
15.1 All periodic outgoings payable by the vendor, and any rent and other income received in respect of the property must be apportioned between the parties on the settlement date and any adjustments paid and received as appropriate.
15.2 The periodic outgoings and rent and other income must be apportioned on the following basis:
(a) the vendor is liable for the periodic outgoings and entitled to the rent and other income up to and including the day of settlement; and
(b) the land is treated as the only land of which the vendor is owner (as defined in the Land Tax Act 2005); and
(c) the vendor is taken to own the land as a resident Australian beneficial owner; and
(d) any personal statutory benefit available to each party is disregarded in calculating apportionment.
Am I right in reading that the land tax can be apportioned anywhere between 0% and 100% depending on what's appropriate, this being the key word?
In such a scenario, is it strictly the case that the purchaser must pay the proportional land tax?
Appreciate any advice!
1. Seller is using a property as an investment and has paid land tax up until 31st December.
2. Buyer purchases the property to use as a Principal Place of Residence, and hence isn't subject to land tax.
3. Buyer is told he/she must pay the proportional land tax for the period between settlement and the 31st December.
4. Victoria State Revenue Office has no specific requirements for who pays in this case - it must be sorted out between the seller and buyer.
5. Only guidance is Condition 15 of the Standard Contract of Sale, which states:
15. Adjustments
15.1 All periodic outgoings payable by the vendor, and any rent and other income received in respect of the property must be apportioned between the parties on the settlement date and any adjustments paid and received as appropriate.
15.2 The periodic outgoings and rent and other income must be apportioned on the following basis:
(a) the vendor is liable for the periodic outgoings and entitled to the rent and other income up to and including the day of settlement; and
(b) the land is treated as the only land of which the vendor is owner (as defined in the Land Tax Act 2005); and
(c) the vendor is taken to own the land as a resident Australian beneficial owner; and
(d) any personal statutory benefit available to each party is disregarded in calculating apportionment.
Am I right in reading that the land tax can be apportioned anywhere between 0% and 100% depending on what's appropriate, this being the key word?
In such a scenario, is it strictly the case that the purchaser must pay the proportional land tax?
Appreciate any advice!
