By Julian & Renee (Australia) – with writing support from Alberto Aldana (Colombia)
When buying property in New South Wales, it is important to be aware of the many costs involved, including land tax. A common misunderstanding relates to the s47 Land Tax Clearance Certificate. Buyers often assume that a vendor with a “clear” certificate has no land tax debts or that all charges have been paid in full. It can be very unpleasant to discover at settlement that the tax has not been paid. It is important for both the vendor and purchaser of the relevant property to understand what a s47 certificate means and the purpose it serves.
The s47 Land Tax Clearance Certificate is important because it:
- Protects the purchaser from any subsequent claim brought by Revenue NSW for unpaid land tax owed by the vendor prior to the sale of the property.
- Provides “conclusive proof” that the purchaser will not be liable for any land tax debts secured against the property by the vendor.
- Clarifies that a clear certificate does not mean that land tax has already been paid.
- Indicates that Revenue NSW does not expect the tax to remain unpaid, often because the vendor has a clean record or other security in place.
- Ensures that buyers will not be liable for the vendor’s unpaid land tax.
- Reminds buyers that they should still check whether land tax has been properly addressed in the contract, even if the certificate is clear.
The s47 certificate does not protect vendors. A vendor remains personally liable for land tax even if the certificate is “clear” and must still pay any debt owed to Revenue NSW. This is especially relevant in new developments, where land tax matters can be complicated and may involve several properties, or where tax has not yet been assessed but may still be due.
It is important for vendors to understand that a clear certificate does not exempt them from paying any outstanding taxes at or before settlement.
Purchasers may face risks if land tax is not properly handled or disclosed in the contract, as they may need to make adjustments at settlement or incur unexpected costs. To reduce the risk of being liable to pay or indemnify the seller for land tax, buyers must check the contract of sale for a land tax adjustment clause. A “clear” certificate does not remove the need for settlement adjustments. At Flash Conveyancing, we ensure that these clauses are clearly included in the contract so that both the vendor and purchaser understand their obligations regarding land tax.
Julian and Renee of Flash Conveyancing are experts in property transactions across New South Wales. With extensive experience working with local councils such as Blacktown, Hornsby, and Parramatta, they carefully manage each client’s settlement. If you are buying in Kellyville, Castle Hill, or Windsor, we will ensure that all land tax and contractual obligations are properly addressed to keep your transaction smooth and hassle-free.
Our team has a proven track record of working seamlessly with the Blacktown, Hawkesbury, Blue Mountains, The Hills Shire, Hornsby, and Parramatta councils.
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