Land Tax for apartments?

Apologies if this seems a silly question. I have been looking at buying an established apartment (24 apts or less in older block) in areas such as prahran, windsor and south yarra. In most contract of sales there has been no land tax payable but for one of them I am interested in there is a land tax of $600 per year.
Is this because the value of the apartment is higher than others?
Many thanks

Tsea said:

Apologies if this seems a silly question. I have been looking at buying an established apartment (24 apts or less in older block) in areas such as prahran, windsor and south yarra. In most contract of sales there has been no land tax payable but for one of them I am interested in there is a land tax of $600 per year.
Is this because the value of the apartment is higher than others?
Many thanks

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It might be because the apartment is owned by a trust. or by a person who has many properties. Or maybe because the value of the land is high.

Terry_w said:

It might be because the apartment is owned by a trust. or by a person who has many properties. Or maybe because the value of the land is high.

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Thanks for your reply.. So if there was a deceased estate and the apartment was owned by a trust this land tax would apply?
Does that mean then if bought the land tax would then not likely need to be paid by the new vendor?

The s32 vendor statement should have a land information certificate or rates notice in it. This document will give you the Site Value that has been apportioned to the unit. You will be able to use this site value and your personal circumstances to determine if land tax would be payable.

Tsea said:

Thanks for your reply.. So if there was a deceased estate and the apartment was owned by a trust this land tax would apply?
Does that mean then if bought the land tax would then not likely need to be paid by the new vendor?

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Deceased estates have different rules to trusts. Land tax may or may not apply.

But overall it means what the vendor is currently paying is not necessarily what you will be paying in land tax for the same property.

More Info About Land Tax

Land tax is payable for various reasons, including when the property is an investment. Principal places of residence are exempt and there is a $250,000 taxable value threshold.

As the purchaser, you are liable to pay back the vendor any land tax adjusted for the days in a calendar year you own the property (land tax is levied on 31 December each year). It doesn't matter how many properties the vendor owns: you pay based on them owning only one investment property. And it doesn't matter if you are buying the property to live in and not as an investment - the vendor's use is the relevant one.

This is a great summary of land tax in Victoria, including exemptions:

http://www.sro.vic.gov.au/SRO/srona...0441F59-A6FAB6BE64979127CA2575A100441FA4?open

Good luck!

Note: the above is general information and should not be considered as legal advice.

This may apply in Victoria but is not the case in all states - there is no compulsion to pay the vendor's land tax in NSW unless it is stated and agreed on the contract of sale.

Kate Ashmor said:

As the purchaser, you are liable to pay back the vendor any land tax adjusted for the days in a calendar year you own the property (land tax is levied on 31 December each year). It doesn't matter how many properties the vendor owns: you pay based on them owning only one investment property. And it doesn't matter if you are buying the property to live in and not as an investment - the vendor's use is the relevant one.

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Bzzt wrong.

From your link (FAQ Section):

If I sell land part-way through a year, do I get a refund of part of the tax paid?

No, but the contract for the sale of your land may allow you to recover a proportion of the land tax you paid from the purchaser.

However, this is a matter for you to negotiate with the purchaser prior to signing a contract to sell the land. The Land Tax Act 2005 does not provide for a pro rata adjustment where a property is sold during the assessment year.

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Similar to other states, its often the accepted practice to make adjustments for the purchaser, but by no way required for the purchase unless the contract states this.

Victorian Land Tax Position

My response was in relation to Victoria, where the questioner is from.

The standard Victorian contract of sale of real estate (REIV, LIV) provides for land tax to be adjusted in the manner I described. Of course, a purchaser could seek to amend the standard terms - but good luck trying! Can't see this ever occurring if purchasing at auction.

Cheers!