Land Tax clause for new apartment contract

Discussion in 'Legal Issues' started by Nikhil Dhar, 14th Jan, 2020.

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  1. Nikhil Dhar

    Nikhil Dhar Member

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    Hi

    I have decided to buy a new apartment in Brisbane and about to sign the contract. There is land tax clause in the contract which shows land tax is part of outgoings (body corp, council rates etc.)
    The land tax is apportioned between buyer and seller based on the settlement date.
    Now I am getting advise to get this clause removed as it should be completely sellers responsibility. But my property agent is completely against it and said this clause is there in the contract of all the buyers who have purchased apartment in the building but at the same time she is not telling how much it is going to cost me annually.
    So, I just want advice from the forum here if this is normal to have this land tax clause in apartment contract and who is responsible for land tax in case of apartment complex. And how much it would be (some ballpark numbers)?
    I am also attaching screenshots of actual clauses for reference.

    Thanks

    PS: Not sure if it is important but this is not investment property and I will be living there if purchased
     

    Attached Files:

  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    It is irrelevant what the property agent says.
     
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  3. JDM

    JDM Well-Known Member

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    Deleting the land tax adjustment is the most common amendment to a contract for the purchase of a new unit.

    What harm is there in requesting the land tax adjustment be deleted? Worst case, they don't agree.

    Remember that the agent works for the seller.
     
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  4. Nikhil Dhar

    Nikhil Dhar Member

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    Thanks for the responses. If seller doesn't agree to remove then how much it is going to cost me annually?
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    Who could say? No one knows any details. Best to ask your solicitor
     
  6. Trainee

    Trainee Well-Known Member

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    What do you mean ‘my property agent’?
     
  7. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    This is why you get legal advice prior to signing. Ask the lawyer for their view before signing.

    Is this OTP as a new build ? Its seems so. Its like the developer wants to clawback the unit entitlement for all the land tax based on a period of time. Not unusual for developers to do that. You may be right to argue this point
     
  8. thesuperman

    thesuperman Well-Known Member

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    Maybe the OP has engaged a buyer's agent to act on his/her behalf in sourcing the property and negotiating the deal.
     
  9. Nikhil Dhar

    Nikhil Dhar Member

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    I mean property agent representing seller
     
  10. Trainee

    Trainee Well-Known Member

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    then they are not working for you and all their advice needs to be taken with a big grain of salt.
     
  11. Nikhil Dhar

    Nikhil Dhar Member

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    Agreed. That is the reason I am here and careful when she says this cannot be changed. Just want to understand what is the norm when it comes to land tax on apartment complexes.
     
  12. Nikhil Dhar

    Nikhil Dhar Member

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    This is completed project and as advised will be seeking legal advise before signing. Just wanted to check if it is normal to include this in contract
     
  13. Trainee

    Trainee Well-Known Member

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    Thats not the point. Are you just going to accept anything that is ‘normal’?
     
  14. Scott No Mates

    Scott No Mates Well-Known Member

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    I'm in the "cross it out boat" as well however I will add that if this is a deal breaker (though it shouldn't be), the fallback position could be "land tax on a single-holding basis" or wording to that effect by your solicitor. That way the vendor must deduct the threshold from the land value if the unit. This would generally reduce any liability to close to zero.

    How much will land tax be in the future? Is it your PPOR or an IP?
     
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