Vendor asking Purchaser to pay land tax

Hi all,

Helping my in-laws to purchase a new apartment in NSW. The vendor is the builder of the apartment who is reselling the apartment as the previous buyer couldn't settle.

The vendor is insisting that my in-laws pay for the land tax but cannot tell us how much it is as the OSR hasn't advised on the amount. I've asked the lawyer to ask for a cap on the amount, as I don't want my in-laws to get hit by a big chunk of land tax.

1) Is it normal for such practise where the vendor/developer ask the purchaser to pay the land tax? To me it's a sneaky move by the vendor to get us to absorb what he should pay, hence, inflating the purchase price of the unit. I'm going to talk to the agent to get the purchase price reduced (long shot, I know).

2) Since no one could tell me the potential land tax, I went to the Valuer General's website to get the latest land value for the apartment unit, which was published late last year. It shows the total value of the land (X) and the proportion of value for the apartment unit. Then I used the OSR land tax calculator to calculate the land tax based on X, then I proportioned it to the apartment unit's entitlement to get how much my in-laws have to pay. Does this sound like the right approach?

Thanks.

 

adjust the land tax?

1. It is not so common but yes it is normal

2. yep

 

@Terry_w in the cases you have seen where the purchaser is asked to pay the land tax, has any managed to get the vendor to reduce the purchase price or any other ways to manage to extra hit on the pocket?

 

Go for a longer settlement to reduce the land tax payable.

 

Most just refuse to pay it (before contracting). But it will depend on how hot the market is and how cheap the property is.

How much are you talking about?

 

Estimated share of land tax is $3k. Purchase price is almost $820k. I won't categorise the market as hot but previous OTP buyers trying to sell similar units at $900k (no takers so far).

 

in the long run does $3k matter that much?

Sure, keep negotiating, but if it comes down to it would it be worth walking away from for $3k?

 

Sure in bigger scheme of things the amount is not a deal breaker. But if one agreed on a price then sneak in extras that were not previously agree on or mentioned, it is a different thing.

 

It must have been in the contract - they coudn't sneak in something like this.

 

Unfortunately in my case, they didn't have a contract ready until a week after our offer was accepted. We only found out through reading the contract.

 

In that case the contract is the vendor's counter offer. It is up to your parents to accept their offer or make another counter offer.