Rates Appointment on your Settlement Statement

When reviewing a settlement statement, it can often be confusing to find that you’re paying more than you anticipated to your vendor. This is common when they have paid their rates in advance.

Yes - there are two types of rate payer; those that pay as they go and those who pay in advance. If you are purchasing your new home from an advanced paying vendor, you will need to reimburse them for the period of time you’ll occupy the property.

For example, if the vendor paid for a full year of rates ($1000) on the 1 July 2023, and your settlement date is 6 April 2024 (280 days), you'll need to reimburse them for the 85 days worth of rates, where you’re occupying the home.

CALCULATIONS;

Yearly rates value $1000 / 365 days in the year = $2.73 daily rates value

365 days - 280 days the vendor occupies the property  = 85 days you’ll occupy the property

85 days x $2.73 daily rates value = $232.05 due to the vendor

The difference of $232.05 is known as the rates apportionment, and will show on the settlement statement.

The conveyancing team at Sutcliffe Matson is experienced and knowledgable when it comes to the sales and purchasing of property, so if you have made the decision to dive into the market, call our offices today.