Browse Forums Home Finance 1 Feb 14, 2011 4:03 pm Hi, Hopefully this is the right place to ask, myself and my partner recently settled our land in Melbourne. We missed the initial settlement date through no fault of our own. Basically the bank couldn't provide formal approval, mortagage docs etc until valuation was done, which is fair enough. However valuation could not be done until land was pegged which we were advised had happened on the date of registration of plan of subdivision. This happened on the 15th of december and we were told to be ready for settlement on or around the 29th of Dec. Of these 14 days only about 6 were business days due to christmas period, not enough time for bank to order vaulation, valuer to get out there, get report back , mortgage docs out , signed etc. With people on holidays, fomal approval did not come back until 31 december, we had missed settlement. LMI had also approved the incorrect amount , so it had to go back to them and new docs re-issued .By the time we settled it was mid January. Hence we were charged penalty interest of approx $1500 which is understandable, however we also were charged proportionate land tax of $6500!!! as it had crossed over into new year.. We are first home buyers and should not be liable under normal circumstances. I was after some advice as to how to claim this back or who to attemppt to get this cost back from, the bank blames the developer for stalling things, they blame the bank, and some blame conveyancer who they say should have argued this for us and admittedly was hopeless the whole time. Is the vendor they obliged to give 14 BUSINESS DAYS notice to settlement or just 14 days? Any help is much appreciated thanks Dom Re: Land Tax Penalty - Advice please!! 3Feb 14, 2011 6:51 pm http://www.sro.vic.gov.au/SRO/SROCalcs. ... ment&#calc I calculated on $500k land value for the full year and it was $775. Unless Land tax hasn't been paid for years and years and fees + interest and all that on top would still be short of $5k... Better see if someone made a boo boo or is having a lend of you! Where you are coming from is where you are going to... Re: Land Tax Penalty - Advice please!! 4Feb 14, 2011 7:26 pm Domizm Hi, Hopefully this is the right place to ask, myself and my partner recently settled our land in Melbourne. We missed the initial settlement date through no fault of our own. Basically the bank couldn't provide formal approval, mortagage docs etc until valuation was done, which is fair enough. However valuation could not be done until land was pegged which we were advised had happened on the date of registration of plan of subdivision. This happened on the 15th of december and we were told to be ready for settlement on or around the 29th of Dec. Of these 14 days only about 6 were business days due to christmas period, not enough time for bank to order vaulation, valuer to get out there, get report back , mortgage docs out , signed etc. With people on holidays, fomal approval did not come back until 31 december, we had missed settlement. LMI had also approved the incorrect amount , so it had to go back to them and new docs re-issued .By the time we settled it was mid January. Hence we were charged penalty interest of approx $1500 which is understandable, however we also were charged proportionate land tax of $6500!!! as it had crossed over into new year.. We are first home buyers and should not be liable under normal circumstances. I was after some advice as to how to claim this back or who to attemppt to get this cost back from, the bank blames the developer for stalling things, they blame the bank, and some blame conveyancer who they say should have argued this for us and admittedly was hopeless the whole time. Is the vendor they obliged to give 14 BUSINESS DAYS notice to settlement or just 14 days? Any help is much appreciated thanks Dom $6,500 land tax!! wow...you must have bought in a rich area....whats the postcode? and land value? - you will have to check your contract about the 14days....it's not standard. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Land Tax Penalty - Advice please!! 5Feb 14, 2011 8:31 pm There is a clause in the contract stating that " The purchaser is liable for all supplementary rates or outgoings assessedon the property on or after the settlement date". This includes rates, Land taxes etc. It also states that the property is part of a large subdivision and it is nominally assessed under bulk assesment. I think the issue is that the vendor, a very large volume builder owns multiple lots and land tax is calculated on all of them rather than just our block. I just think it is a convenient time of year for them to choose to settle and in turn pass the bill on to us. We requested an extension, according to our conveyancer this was declined. He then gave us two hours notice on settlement day that we needed $7k more than we thought we would, didn;t really want to argue as a notice to rescind was already issued. Not really a rich area at all, it is in Lyndarum estate in Epping , VIC. Land price was $225k. Obviously it is a lot of money we paid for literally nothing and would really like it back, thanks for thehelp Re: Land Tax Penalty - Advice please!! 6Feb 14, 2011 8:45 pm Assessment Year: 2010 Total Unimproved Value ($): 255000 Individual Tax Total Unimproved Value: $255,000 Net Tax Liability: $285.00 Where you are coming from is where you are going to... Re: Land Tax Penalty - Advice please!! 7Feb 14, 2011 8:54 pm Domizm - I dont know how you will get this back...if you can! It a legal issue then anything else, speak to a experience solicitor( some offer free initial consultation) But based on your land value....6k is a bit rich for land tax i would say- I have a IP in NSW with land value at $550,000 in a "rich" area ; and my land tax was only $4,900 But end of the day speak to a solicitor. Sorry. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Land Tax Penalty - Advice please!! 8Feb 14, 2011 9:14 pm This calculator will estimate the amount of your land tax liability in NSW. This calculator does not include calculations for land owned by special trusts or related companies. View land tax rates. Combined taxable land value:550000 (whole dollars)Tax year:2010 Estimated land tax payable: (If you are liable, OSR will assess you based on the appropriate land value.) $2,884.00 Note: this calculator provides an estimate only and should not be used to calculate the amount required to obtain a clear land tax certificate. If you require an amount to clear, please contact us. If the land tax payable is less than $100, you will not be issued with a land tax assessment. Check your land tax here: ...a PPR (pinciple place of residence) is not taxed http://www.osr.nsw.gov.au/taxes/land/calculator/ Check your land value here: http://www.lpma.nsw.gov.au/valuation/land_value_search The penalty for accidental non-payment 25% of the tax imposed Where you are coming from is where you are going to... Re: Land Tax Penalty - Advice please!! 9Feb 14, 2011 9:20 pm onc_artisan - AWESOME! thanks for that! Will help in buying the next IP... Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Land Tax Penalty - Advice please!! 10Feb 14, 2011 9:23 pm You might be paying too much shape, but you probably know that... ...since you are in the biz Where you are coming from is where you are going to... Re: Land Tax Penalty - Advice please!! 11Feb 14, 2011 9:52 pm ahah thanks makes me feel better that i might have paid $2k more then required Dw i done the calculation it's all correct, the property is in Bondi ( house) so land value is quite expensive there....based on the formula they use.. Dom- I just remembered something ( but please clarify with your accountant first)- everyone is entitled to $300,000 land value Tax free every year ( no land tax) - the $300,000 is total global limit. This is what i have my on last tax return- but confirm with accountant or maybe there is a accountant on this forum?? Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Land Tax Penalty - Advice please!! 12Feb 14, 2011 10:43 pm hi dom Are you sure this is not stamp duty that you had to pay? I paid $4k at settlement on land bought 3 years ago for $140k. It was a separate check that had to be paid to the state revenue office. Re: Land Tax Penalty - Advice please!! 13Feb 14, 2011 10:46 pm Angel- you made a good point...$220k purchase price and $6k fee...sounds like Stamp duty. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Land Tax Penalty - Advice please!! 14Feb 14, 2011 11:33 pm Oops! Where you are coming from is where you are going to... Re: Land Tax Penalty - Advice please!! 16Feb 15, 2011 10:21 am Our developer tried to pull the same thing on us, asking us to settle at christmas. Exactly the same as you - notification on the 15th, settlement must be by the 29th. The days are calendar days, not business days. The full story is in my blog. Luckily we had a solicitor handling the transaction, as well as a very competent mortgage broker, and they were able to get everything done on time. $6500 for a few days sounds a bit ridiculous. Maybe you should look for a solicitor familiar with handling land transactions. I recall all the taxes in the settlement being pro-rated. Metricon Riva 33 - http://herlihy-riva.blogspot.com Site start 15/03/2010 - Handover 23/12/2010 9 months and 8 days (284 calendar days) from site start to handover Re: Land Tax Penalty - Advice please!! 18Feb 15, 2011 10:39 am Definetly not stamp duty, paid that as well. We are paying the developers land tax for the year 2011, he was the owner still on 31/12/2012 howver as we missed settlement this amount is passed on to us as per contract. SRO won't refund due to it being principal place of residence as we were not the owner when the liablity was due to be paid, only the owner can apply for exemption. We paid single occupier land tax of $328 for 2010 and then proportionate land tax for 2011. I don't really know where to go, who to blame etc. I might try the accountant idea and claim back on Tax thanks. Like I said the Occupancy Certificate is not the tollgate that marks the completion of the house. The contract defines… 7 10720 the exemption applies only to your principal place of residence - so you must live in it. The 200 days is continuous. You also have to apply for the exemption. 2 13316 If it's your primary residence then there is no tax deductions to be made. 4 125266 |