Payment of NSW Land Tax using PEXA - Yes you can!

[BelindaLeFevre]

Just like the invention of colour TV, Land Tax can now be paid on settlement utilizing the PEXA Platform!

Land Tax can be paid at settlement in a PEXA transaction without the availability of the physically stamped clearance certificate.   The solution was agreed between Revenue NSW, PEXA and the Law Society of NSW.

The solution required the following changes to satisfy parties, which were implemented earlier this year:

• BPAY payment details available on Revenue NSW documents
• A document provided by Revenue NSW explaining the Land Tax payable
• Inclusion of agreed wording by the Law Society explaining the practitioner can be comfortable to settle
• Hard-coded BPAY biller details in PEXA against a new NSW Land Tax payment destination category
• Ability to upload Revenue NSW documents in document hub (existing functionality)

The process is as follows:

• Purchaser or Vendor representative uploads a copy of the Land Tax Clearance Certificate (Section 47) to document hub in the workspace (under Revenue Office Documents)
• Vendor representative uploads the Land Tax Payable letter provided by Revenue NSW to document hub in the PEXA workspace (under Revenue Office Documents), and any additional documentation provided by Revenue NSW detailing outstanding debts (if applicable)
• Vendor representative creates the line item for payment to Revenue NSW, choosing the category of NSW Land Tax, with the amount as per the documents
• After settlement, the clearance certificate can be obtained online here by the Vendors representative 48 hours after settlement.  Note there is no requirement for this certificate to be obtained or provided to the purchaser.

Office of the Registrar General (ORG) have a waiver in place in the short term to assist practitioners to transition to the new process.  The waiver will expire 30 November 2019.  The waiver can be located here https://www.registrargeneral.nsw.gov.au/__data/assets/pdf_file/0008/526733/Conveyancing-Rules-Waiver...

Happy transacting!

Belinda

[LeahStevens]

In regards to the receipt of the Land Tax Payable Letter, is there any indication that the representative can get an electronic copy, rather than wait for the vendor to get organised?

[BelindaLeFevre]

Hi @LeahStevens,

I've asked the question at Revenue NSW - just waiting on an answer.  I think there are some issues that prevent the debt letter from being auto generated.  The Vendor would need to contact Revenue NSW and then request the total outstanding be calculated, and a letter outlining the total debt owing. 

I'll update once I have further information.

cheers

B

[AndrewK]

In my experience from recent transactions, Revenue NSW does not provide these land tax payable letters.  In some transactions we have had to provide the assessment for the current year (together with evidence of payment of any instalments by the vendor) and a clear land tax certificate for the previous year, which confirms there is no land tax payable up to and including that year. It works but it isn't the process you set out.

[CindyBrown]

Where is this wording found ?

Inclusion of agreed wording by the Law Society explaining the practitioner can be comfortable to settle

Also, how is this going to work when the paper waiver ends on 31st March and the purchaser refuses to settle without a clear land tax certificate regardless of being "able" to pay it in PEXA

[BelindaLeFevre]

Hi @AndrewK,

That does sound onerous. 

My understanding is you would only need to get the land tax payable letter if the Section 47 returned saying there was Land Tax payable.  In the examples below, did you order a Section 47?  If there was nothing owing, there should be no need to request anything further from Revenue - they only generate the letters if there is a debt outstanding.

There is some work going on at the moment with RNSW and the Law Society to fine tune the process and communications will be made available at the conclusion of this activity.

cheers
Belinda

[BelindaLeFevre]

Hi @CindyBrown,

The current wording can be found on the land tax payable document.  My understanding is there are plans to include this wording in a variety of documents as well as commentary on the RNSW website.

Re:  "Also, how is this going to work when the paper waiver ends on 31st March and the purchaser refuses to settle without a clear land tax certificate regardless of being "able" to pay it in PEXA" . Understand your concern.  This is where messaging on the RNSW website and associated documents will be important to ensure everyone is aware of the new process.  The Law Society are working with RNSW to facilitate some communication.  I also understand from the ORG they intend to provide some communication on the matter prior to the expiry of the waiver.

Hope this helps!

cheers

Belinda

[AndrewK]

My comments were in the context of a clearing a land tax charge on settlement- not in circumstances where there is a clear land tax certificate.