Land Titles Office - Fraud / rort!!??

I am speechless

I have a property settling on 20 January 2017 (in victoria)

LTO claim I owe $2132 Land tax for 2017
My conveyancer advises me that LTO will give me a deduction of $435, so I am really only paying $1690 odd dollars.

STEAM is coming out of my ears.!!
1. LTO - apparently determine their calculations for the year based on if you owned the property at 31 December of the previous year!!!!
2. As I am only in ownership possession of the property for 20 days of the year - I should only pay approx 6% or 7% . But they are still charging me approx ie: 80% as if I was owning the property up until October 2017!!
3. I should not have to pay this tax until the normal due date in June 2017

Can someone explain how this is fair.
What re course I may have (probably none)
There needs to be a royal commission into this

I should really only be paying approx $150 not $1690 odd !!!!!!!

 

Why it fraud let alone a rort? Why a royal commisison!

And why are they giving you a discount?

Land tax is payable on land held at mid night on 31 Dec. You pay for the full year ahead. This is the law.

Did you contract with the purchaser to adjust for land tax paid?

 

And buyers wonder why the vendor is keen to settle before Christmas.

@Keentolearn77

Why didn't you have the solicitor tick the land tax adjustment?

Was it an IP? were you living there until settlement?

Had you recently bought and moved into the new property?

Did you speak with your accountant before selling?

Did settlement get postponed?

If it's an IP, the land tax will reduce your capital gain.

 

@Terry_w
For NSW is it settlement date or contract exchange date
(Assuming no special provisions on contract)

I think my answer is in this thread - Settlement date.
Tax Tip 95: Land Tax in NSW Between Exchange and Settlement

 

Why didn't your conveyancer advise you of this beforehand? Did you ask them the question?
In NSW there is a "Land tax adjustable" box
Sounds like someone screwed up.

 

There is no rort. Its a tax liability for state taxes applied to all property owners at 31 December of each year. Land tax in Victoria has operated since at least 2005 as that was when the law was last rewritten . Its older than that. The OSR have just bought the assessment to the settlement instead of waiting - Since you wont own it later. Thats part of the process. Same as pro rata doesnt operate for land tax. Its based on the owner at midnight on 31 Dec. Your conveyancer didnt draft contract to pass on land tax is the only error I see here.

Conveyancer that gives tax advice - Thats convenient. Did they guarantee its deductible ?

 

In Vic the standard contract allows for adjustment of land tax.

 

There is a thread for these types of problems.

First world problems!!

Before a tenant moves into a rental property they have to pay 2 weeks rent in advance when they are not even living in the property! How is this fair? Because they have to pay rent in advance. Land tax works the same.

You have none because LTO is following the law. You can write to your local MP and lobby to have the law changed. It won't be changed though.

There really doesn't need to be a royal commission into this

No, you need to pay the amount that the law requires you to pay. Land tax, council rates, water and sewer rates, landlord insurance, insurance, property management fees, repairs and maintenance are some of the costs of owning a rental property. Hence the return on investment is not spectacular.

 

Unfortunately this is how land tax works in Victoria. You pay in full for the year as of who owns the property at 31st of December the previous year. Hence a lot of developers want to settle prior to Christmas (we had one on the 28th) and many charge large penalties if you're late.

There might be some way around this, but you'd need to talk to your accountant.

 

Depends on if you have access or getting the proceeds/benefit such as rent....

 

Didn't think access was relevant.

 

I think in NSW it would be more correct to say benefit, access may just mean allowing a tradesman in to measure up, benefit may be getting the rent.

 

So am I !

I am surprised anyone is offering any discount !

 

I may talk till I'm blue in the face.
I understand its the law but maybe the law is wrong.

I guess its the same as settlement apportions monies re council rates based on the time frame you had possession of the property.
I am shocked and it is unfair that land tax is'nt the same.
But I'm not going to lose sleep over it
Cheers

 

I think it may be the same - check you agreement

 

Sorry, it's 100% clear, own it on 31st Dec, pay your taxes next year or contract to pro rata.
Thread closed - no legal challenge, no royal commission.

 

It is also for period already held.....not in advance AFAIK

You can adjust with buyer possibly.....gov let's you sort that out though.

 

It makes no difference if it is in advance or in arrears - the owner is liable at the taxing date.