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Learn about your obligations during the sale of property, including the difference between clearance certificates, clearance quotes and settlement letters.
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Urgent property settlements
If you need an urgent assessment notice for an upcoming property settlement you must update your land tax details in Land Tax Online. Learn how to update land tax details.
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How land tax is transferred with property ownership
A property settlement is a legal process that transfers ownership of a property from the seller to the buyer. It is the final step in selling a property.
Unpaid land tax is a first charge on land and takes priority over all other liabilities attached to a property. This means a new owner can become responsible for any unpaid land tax from a previous owner, including extra charges like interest and penalties.
We recommend that buyers get a clearance certificate to check that all land tax has been paid by previous owners.
We also recommend that you and/or your solicitor/conveyancer carefully review the contract of sale from the seller before you sign it. Look for any issues that may affect the sale, such as unpaid land tax or other charges against the property.
A property owner is liable for land tax when the total land value of all their non-exempt land in NSW exceeds the land tax threshold.
The seller may provide a clearance certificate that indicates there is unpaid land tax. If there is unpaid land tax, payment should be arranged prior to, or as part of settlement.
The responsibility for payment of land tax between the buyer and seller is usually detailed in their agreement within the contract of sale.
Your solicitor/conveyancer can help explain any land tax adjustment terms in your contract of sale.
If unpaid land tax is not paid on or prior to settlement, the buyer can be held responsible to pay it after they take ownership of the property.
Selling a property
A seller is responsible for giving the buyer a copy of the land tax clearance certificate for the property.
Here is what you need to provide at, or by, settlement:
Option 1: A clear certificate with no charges
You can provide a clearance certificate that shows no charges.
You can get an updated certificate if you previously had an unclear certificate but have since:
paid your land tax, or
cleared your land tax by other means, such as having an exemption application approved.
