Common settlement adjustments at a glance
| Adjustment | How it's billed | How it's adjusted |
|---|---|---|
| Council rates | In advance | The seller is responsible up to settlement day; if they've prepaid beyond it, the buyer reimburses them for the rest |
| Water & sewerage access charges | In advance | The buyer reimburses the seller for the portion after settlement |
| Water usage | In arrears | A special meter reading works out the seller's usage to settlement, which is deducted from the settlement amount; the buyer pays the next bill |
| Body corporate levies | Usually quarterly | Split at settlement; if the seller has prepaid, they're credited for the portion after settlement |
| Land tax | Annual, state-based | May be adjusted where the contract allows, and the rules vary by state — notably Victoria restricts a seller from passing land tax on to the buyer for residential sales below a legislated threshold |
| Rent (tenanted property) | Ongoing | The seller is credited for rent up to settlement and the buyer receives rent after; any outstanding rent or security deposit is transferred |
Settlement statements often include adjustments so both the buyer and seller are fairly charged or credited for amounts already paid or owed. What applies depends on the timing of the transaction and the services related to the property. The most common are:
Rates. The seller is responsible for rates up to settlement day. If they've paid beyond it, they're credited, and the buyer reimburses the portion from the settlement date onward. For example, if settlement is 1 December and the seller has paid rates to 31 December, the buyer pays them back for the remainder of the year.
Water and sewerage access charges. Like rates, these are often paid in advance, so an adjustment reimburses the seller for the buyer's portion.
Special water meter reading. Water usage is billed in arrears, so the seller covers usage up to settlement and the buyer pays the next bill. A special meter reading is taken as close to settlement as possible to work out the seller's usage to the settlement date, which is deducted from the settlement amount.
Body corporate levies. For strata or community-scheme properties, levies are usually billed quarterly. An adjustment reflects the seller's responsibility up to settlement; the buyer takes over from then, and if the seller has prepaid, they're credited for the portion after settlement. A special levy is usually the seller's responsibility if it was struck before the contract date; one struck afterwards depends on the contract and state.
Land tax. Land tax is an annual state tax on land held above a threshold. Whether it's adjusted at settlement depends on your state and contract: in some states it may be apportioned on a single-holding basis where the contract allows, while Victoria restricts a seller from passing land tax on to the buyer for residential sales below a legislated threshold. Because this area varies by state and changes over time, your conveyancer will confirm what applies to your purchase.
Rental adjustments. Where the property is tenanted, rent and expenses are split fairly — the seller is credited for rent up to settlement and the buyer receives rent after, with any outstanding rent or security deposit transferred.