Land Tax
From 1 January 2024 land tax can no longer be adjusted between a vendor and purchaser (applies to contracts for the sale of land entered into from 1 January 2024).
Adjustment clauses in contracts of sale requiring apportionment of land tax will be unenforceable and penalties for breaches of the new law can apply (currently $11,540 for individuals and $57,700 for corporations).
The law doesn’t apply to contracts of sale where the consideration is more than $10 million.
Example: Tom enters into a contract for the sale of his investment property for the sale price of $600,000 on 1 March 2024 and settlement will be on 1 April 2024. Land tax of $2,250 has been assessed for the 2024 calendar year. Tom is liable to pay the whole land tax bill, and land tax cannot be adjusted with the purchaser.
Windfall Gains Tax
From 1 January 2024 Windfall Gain Tax (WGT) liability that has been assessed can not be passed on to a purchaser or adjusted between a vendor and purchaser on subsequent sale of the land.
The WGT liability will be reflected in the sale price rather than adjusted or passed on.
Penalties for breaches of the new law can apply (currently $11,540 for individuals and $57,700 for corporations).
The law doesn’t apply to contracts for the sale of land (or compliant options) entered into before 31 December 2023.
For assistance with Land Tax and Windfall Gains Tax and other property and conveyancing issues, contact Fleur Craig of Armour-Craig Legal on (03) 5636 4986 or fleur@armourcraiglegal.com.au.