At settlement all council rates, water rates, land tax (if applicable) and body corporation/owners corporation levies need to be adjusted and calculated. The purchaser becomes liable for rates as from the settlement date to the end of the rating period. Usually calculated to the end of the financial year ie 30 June.
The Vendor is liable from the commencement of the rating period to settlement date.
Our office prefers to comply with the Local Government Act whereby the adjustment of rates are calculated as paid in full. Purchasers should take into consideration the added cost of the rate adjustments.
The Council rates are applicable from 1st July to 30th June (full financial year). The water rates are struck quarterly with quarters beginning 1st July, 1st September, 1st January and 1st April. All amounts owing on the property (including arrears and interest) will be deducted from the Vendor at settlement.
In the case of land settlements, the adjustments will vary and may be applicable from the date of sale or date the plan of subdivision was registered. Some vacant land properties are not rated separately as at settlement date, therefore only a proportion will be adjusted.