Land Tax PPOR Question VIC

lilyesp on 04/01/2024 - 20:41
Last edited 04/01/2024 - 21:10

Hi All

I bought a property which will settle in February 20th 2024 that will be my principal place of residence from the start. However, the previous owners used it as an investment property so at settlement, I have been asked to pay land tax for the period of Feb 2024-Dec 2024 onwards (the amount that was prepaid by the previous owners). Since I am not using it as an investment property, can I get a refund on this land tax?

Thanks, confusing..i googled about this not much infor- info is from other areas, Will ask my solicitor tomorrow but then wanted to have some further advice

addit i think what has happened is that the previous vendors- have used it as a PPOR and then during settlement they have changed it to an investment property (seems dodgy) and now it was assessed on Dec 31st as an investment property and hence the land tax. What is unsual is the contract I have signed states that the "Current land tax" is zeo dollars as it is a PPOR. But then the 'new property clearance certificate' is not included in the contract- so is that something i am liable to pay ..that wasnt in the contract I signed..hmm

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Comments

  • Drakesy on 04/01/2024 - 20:48
    +3

    I have been asked to pay land tax for the period of Feb 2024-Dec 2024 onwards (the amount that was prepaid by the previous owners

    Wait the previous owners want you to reimburse them for a future tax payment they'll claim back anyway when they sell the place?

    • lilyesp on 04/01/2024 - 20:52

      yeh thats what my solicitor told me initially hm..i thought i could get a refund from the state revenues office (hardly fair if im using land i should not be paying the land tax ?>

      • Drakesy on 04/01/2024 - 20:53

        Sounds like their accountants problem.
        But don't take my advice for it.

        • Dollar General on 04/01/2024 - 21:19
          -1

          VIC gov changed the legislation recently to double dip here to pay back all the debt

          • EightImmortals on 05/01/2024 - 07:12

            @Dollar General: The scamdemic, the gift that keeps on taking. A gang of complete criminals. Was reading about that yesterday and the first thing that popped into my head was a memory of reading about how communist China used to shoot dissidents and then send a bill for the bullet to their relatives.

            Anyway, I digress (again) not sure what this latest thievery applies to, from what I read the govcrims reduced the applicable land value from 300K to 50K so it might refer to that. But if you are paying the previous owners tax bill then you might want to push back a bit. Surely your conveyancer/accountant can give you some proper advice?

            Might be some info here: https://www.tickboxconveyancing.com.au/2023/12/05/understand…

            (edit: "It’s important to note that properties traditionally exempt from land tax, such as your primary residence, will continue to enjoy this status under the new system. This means the value of these exempt properties will not contribute to your total landholdings calculation for the purpose of this surcharge." So you might be OK going forward, still not sure what they want you to pay up front though.)

      • Muzeeb on 04/01/2024 - 20:55
        +1

        yeh thats what my solicitor told me initially

        Solicitor or conveyancers assistant helper work experience person?

        • lilyesp on 04/01/2024 - 21:28

          lol yeah not sure…

    • Muzeeb on 04/01/2024 - 20:53
      +1

      Agree. It's up to the vendors to seek reimbursement from the SRO when all the settlement paperwork is complete.

      • lilyesp on 04/01/2024 - 20:58

        my solicitor is making me reimbuse them - is there any information on the SRO website about this or where you got your information from? thanks

        • Muzeeb on 04/01/2024 - 21:00
          +2

          IANAL

          Try here

          Maybe you can seek reimbursement after settlement but seems unfair that you absorb the effort and possible risk of claim denial.

          Edit: I'm also not a lawyer

          • lilyesp on 04/01/2024 - 21:28
            +1

            @Muzeeb: Thanks so much for that information ..useful
            it does state "Before you start

            Exemptions, concessions and reductions should be claimed during the property transfer process. This form is for people who overpaid duty or were unaware of an exemption, concession or reduction at the time of transfer.

            To avoid claiming a refund, apply for the exemptions, concessions or reductions via the Digital Duties Form at the time of purchase so you pay the correct amount of stamp duty"

            so i thought wouldnt it be the vendor's responsbility to obtain the refund hmm

            • Muzeeb on 04/01/2024 - 21:30

              @lilyesp: Show that info to your solicitor to seek further directions.

          • lilyesp on 04/01/2024 - 21:40

            @Muzeeb: Though the link you sent— seems to be more for stamp duty not land tax?

            • Muzeeb on 04/01/2024 - 21:44
              +1

              @lilyesp: I just read the form title.

              This form can be used to apply for a refund of money that was overpaid to the State Revenue Office.

              I know even less than your solicitor so take my advise advice with a grain of salt.

        • trustnoone on 04/01/2024 - 21:37

          I could be wrong but I had a contract check done recently where it asked that I pay for the land tax. And Conveyancer told me that we should update the contract because they should pay for it and not me.
          Is this in the contract already that says you'll pay for it?
          I'm not a lawyer though.

          • lilyesp on 04/01/2024 - 23:06

            @trustnoone: i read the whole contract- no where it states i have to pay or the land tax is adjustable

  • rambutann on 04/01/2024 - 21:43

    I would be contacting another conveyancer to get a second opinion. They probably wont charge you for asking the question, mine wouldnt at least.

    Seems silly to have to pay it…. Unless it was explicitly in the contract beforehand, then its on you.

  • Shame on 04/01/2024 - 22:12
    +6

    Since you're paying other people's bills, my grinder subscription renews in January for $120 USD so I'll send you the invoice

  • djkelly69 on 04/01/2024 - 22:58
    +1

    Neither you or the vendor can be 'reimbursed' any amount by the SRO - if a property is liable for land tax on 1 Jan 2024, it is liable for the whole year's worth of land tax.

    Your contract will state whether or not a land tax adjustment is required at settlement, and this should have been explained by your solicitor/conveyancer prior to signing the contract.

    Incidentally there is actually new legislation which has just come in which expressly prohibits this sort of adjustment being required, but I believe it only applies to contracts entered into from 1 Jan 2024. I assume your contract was not entered into this year.

    • lilyesp on 04/01/2024 - 23:07

      yep thats right it was entered into last year- i looked through my whole contract and no where it states a land tax adjustment is required at settlement

  • lilyesp on 05/01/2024 - 10:41

    looking at the contact of sale – there is no proportional tax adjustment clause, or clause to state that I am liable for adjusted land tax. (in fact when i signed the contract of sale- the land tax clearance certificate stated that the property is a PPOR and not liable- i suppose the vendor changed this last minute). However as said- no clause i can see ,
    However there is clause "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 adjustment paid and received as appropriate. " so im not sure if that is suffice to include adjusted land tax or a separate land tax clause is requried.

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