Unpaid Rates lead to Sale of Property
Whether you are purchasing your first home, family home, rental property, commercial property, retirement home, or simply refinancing your property, you may not remember as time goes by, the consequences of not keeping your rates paid and up to date with your local Councils.
When signing that all important mortgage enabling your loan funds to be available on your settlement or refinance date, you have agreed to keep the rates on your property paid up to date at all times.
Consequences of falling behind in your payments may lead to the Council informing your Bank under Section 62 Rating Powers Act 2002. Council can accept payment of the rates and arrears directly from your Bank. This payment will then be treated as an addition to your mortgage until the unpaid rates have been paid. For serious arrears, the consequence can be a Rating or Mortgagee sale of your property.
When You may have to Pay Tax selling a Property
When the bright-line test commenced, it affected residential land bought and sold from 1 October 2015. If you sold the property within a two-year period, then depending upon your circumstances residential land tax may have applied.
From 29 March 2018, the two-year period has increased to five years.
Tax may become payable if you have bought property with the intention to re-sell it and the tax paid would be based on any profit you make when it is sold.
Although the bright-line test may not apply when selling the property after the five year period has lapsed, tax may still be payable if the intention test is applied.
Residential land withholding tax will apply to the sale of your property if it is residential land, sold within five years from 29March 2018, or you are an person buying from offshore. For more details refer to: