I have recently purchased a house in Victoria and settlement is next week. The house is currently tenanted (i.e. the vendor has paid land tax) but the sale will be with vacant possession, and it will be my Principal Place of Residence (i.e. not subject to land tax).
Up until now I have been advised by my solicitor that I will not be paying any land tax. However, my solicitor sent out the Statement of Adjustments to the vendor's solicitor (without first consulting me), with me to pay the apportioned land tax for the rest of the year. I asked if this was correct, they responded immediately to say the vendor is paying the land tax, but when I insisted they double check the statement, they did an about face and said I must pay.
I have spoken to the State Revenue Office and have been advised that there is no specific responsibility in this case as to who pays, and it must be agreed between the purchaser and seller (but commonly in cases where the property will become a Principal Place of Residence, the vendor pays).
My solicitor advises that I have to pay as per General Condition 15 of the Standard Victorian Contract of Sale, which is:
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.
I see nothing relevant in this condition except that adjustments must be paid and received as appropriate, this being the key word. What's appropriate is that the seller and buyer must come to an agreement over who pays the land tax - am I right?
Perhaps my solicitor just doesn't want the trouble of having to argue with the vendor's solicitor over who pays, now they've already sent the Statement of Adjustments? Should the solicitor be permitted to send the Statement of Adjustments without me having reviewed it first?
As I have not agreed to pay the land tax, and my solicitor has taken the liberty of giving my money away without my permission (and is now ignoring me), what can I do in this situation?
Happy for a fight but also happy to let it all go if I am completely wrong about this.
Appreciate any comments!
Up until now I have been advised by my solicitor that I will not be paying any land tax. However, my solicitor sent out the Statement of Adjustments to the vendor's solicitor (without first consulting me), with me to pay the apportioned land tax for the rest of the year. I asked if this was correct, they responded immediately to say the vendor is paying the land tax, but when I insisted they double check the statement, they did an about face and said I must pay.
I have spoken to the State Revenue Office and have been advised that there is no specific responsibility in this case as to who pays, and it must be agreed between the purchaser and seller (but commonly in cases where the property will become a Principal Place of Residence, the vendor pays).
My solicitor advises that I have to pay as per General Condition 15 of the Standard Victorian Contract of Sale, which is:
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.
I see nothing relevant in this condition except that adjustments must be paid and received as appropriate, this being the key word. What's appropriate is that the seller and buyer must come to an agreement over who pays the land tax - am I right?
Perhaps my solicitor just doesn't want the trouble of having to argue with the vendor's solicitor over who pays, now they've already sent the Statement of Adjustments? Should the solicitor be permitted to send the Statement of Adjustments without me having reviewed it first?
As I have not agreed to pay the land tax, and my solicitor has taken the liberty of giving my money away without my permission (and is now ignoring me), what can I do in this situation?
Happy for a fight but also happy to let it all go if I am completely wrong about this.
Appreciate any comments!
