Regardless of who
actually pays the rates to the government or council an agreement
under a typical standard contract for the sale of a house ensures
that the seller and the buyer as between themselves make a money
adjustment in proportion to the time each is the owner. That is, pro
rata adjustment.
Excess water rates
are payable by the owner who used the water. It is therefore
important to establish before completion what the exact situation is
with regard to such rates. Where necessary, a special water meter
reading should be ordered.
In NSW, a local
council is bound by the answer it gives in relation to rates even if later, it proves to
have been mistaken. If you can later show the rate adjustment on
completion was wrong, you still have legal rights against the seller,
although that would be expensive to enforce in comparison to the claim.
Some pensioners
are eligible to have their rates (not including excess water) either
deferred or remitted. If you may be eligible, alert your solicitor so
that they can advise you on the up to date position on your
eligibility.
Land
tax will be payable if the home is being used as an investment. A
tax deduction for rates is available only if the property is bought
to gain assessable income. An investor can claim only the proportion
of rates actually borne.