Section 47 Clearance Certificate

What is a land tax charge?

Under Section 47 of the Land Tax Management Act 1956, land tax is a charge on land owned in NSW as at the taxing date (midnight on 31 December) of each year. The charge applies from the taxing date and does not depend on the issue of a land tax assessment notice. Land tax is an annual tax, so a new charge may occur on the taxing date each year.

Does the charge apply to all the land owned?

Where an owner is liable for land tax, the charge applies to all land held by that owner on the particular taxing date, except for:

  • exempt land
  • Crown land where a lessee must pay land tax
  • land owned by a company and the shareholders are deemed to be the owners as they have an exclusive right to use and occupy parts of the land (a company title scheme).

How do I have the charge removed?

A land tax charge remains until the tax is paid or an exemption is allowed. The Chief Commissioner of State Revenue may release the land from the charge after full payment of the assessment is made.

Alternatively, the charge may be removed on receipt of payment of an estimate amount determined by us.

What protection does a clearance certificate provide?

A clear land tax certificate protects a purchaser from any outstanding land tax payable by a previous owner, regardless of who applied for the certificate. It means that once they become the owner, they cannot be made to pay a prior land tax liability, unless they had notice of the unpaid charge prior to the issue of the certificate.

It does not provide any protection to the owner of the land at the time the land tax charge occurred. That owner still has to pay any unpaid land tax, even if the unpaid land tax is not assessed until after the sale is completed.

Note: a clear certificate does not mean that land tax was not payable or that there is no land tax adjustment to be made on settlement, if the contract for sale allows for it.

Who should apply for the clearance certificate?

Where land is sold under contract, a vendor must provide a certificate to a purchaser as follows:

  • For contracts completing in 14 days or less, the vendor must provide a land tax certificate on the date of exchange.
  • For contracts completing in more than 14 days,the vendor must serve a land tax certificate at least 14 days before completion.

The vendor or their representative must apply using the option of 'VENDOR' at enquiry type. All required information must be provided by the vendor to ensure the certificate can be processed.

Where land is not sold under contract a purchaser or vendor may apply for the certificate. Regardless of which party makes application for the certificate it is the purchaser that is protected.

How do I get a clearance certificate?

You can apply for a clearance certificate through any of the following Client Service Providers (CSP):

For more information on land tax, contact us.

Phone
1300 139 816*
8.30am - 5.00pm Monday to Friday
Mail
GPO Box 4269
SYDNEY NSW 2001
Email

Last updated: 12 December 2017