It is common for vendors to specify that Land Tax is adjustable on the settlement of the transaction, especially where the property was used as an investment property by the vendor.
Land Tax is a tax levied on all owners of land in New South Wales. Land Tax is based on the average value of the land over the last 2 years, and the tax is calculated and levied on midnight, 31 December, every year. Land Tax is calculated on the combined value of all the taxable land you own. This is defined as the combined value of the land less the “threshold amount”. If the combined value of all land you own does not exceed the “threshold amount”, then no land tax is payable. In 2012 the threshold amount is $396,000.
Generally, your principal place of residence is exempt from Land Tax. You are likely liable to pay land tax if you own investment property,
commercial or industrial units, or vacant land.
Both the vendors and the purchasers must ensure that Land Taxis paid before settlement.
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This website is supported by Phang Legal, an incorporated legal practice based in Parramatta CBD providing conveyancing services across Sydney and New South Wales. Kenneth Ti is an associate solicitor with Phang Legal.