Council Rates

The contract provides that council rates be adjusted between the vendor and purchaser as at the settlement date. Council rates are levied for the financial year. They will be adjusted so that the vendor pays the rates up until the day of settlement and the purchaser will be liable from then until the end of the rating period, in this case the 30 June. They are adjusted as if the rates are paid in full regardless of whether they in fact paid or not. Any outstanding rates are paid from the sale proceeds (being the vendor’s money).

Council rates may be paid by instalments but are an annual levy and hence it is normal practice to adjust the rates for the full year not according to what instalment may be due next.

The rates are a charge on the land and any outstanding rates become the liability of the purchaser, so it is essential that they are paid up to date at settlement. One of the inquiry certificates your CPC will obtain is from council and sets out the amount of the annual rates, what payments have been made and what is outstanding.