Avoiding Higher Developer Land Tax Rates Before Year-End Deadline
Red Door Conveyancing acted for a purchaser of land in Bonshaw, Victoria, where an incorrect covenant number supplied by the vendor’s solicitor caused the post-settlement transfer to be rejected by the land registry.
The matter became high-risk because the transfer had to be corrected and resubmitted before 31 December to prevent the client from being assessed at the developer rate of land tax rather than the individual rate.
By coordinating the bank, land registry, State Revenue Office, and vendor’s solicitor through a non-standard resubmission process, Red Door Conveyancing completed the transfer by the year-end deadline and avoided additional tax exposure for the client.
- Client: Purchaser of land
- Company: Red Door Conveyancing
- Industry: Conveyancing / Property Law Support
- Transaction Type: Purchase
- Property Type: Land
- Location: Bonshaw, Victoria
- Core Service Used: Conveyancing advice, transfer of land management, post-settlement rectification, bank coordination, land registry and State Revenue Office coordination
- Matter Type: Post-settlement transfer correction
- Primary Risk Areas: Incorrect covenant details, rejected transfer, conflicting authority instructions, year-end land tax exposure
The Challenge
The matter became complex after settlement had already occurred, when the transfer of land lodged with the new owner’s details was rejected by the land registry. The rejection was caused by an incorrect covenant number that had been provided by the vendor’s solicitor and used in the transfer documentation.
This created a non-standard post-settlement issue with significant financial consequences. Our priority was resubmitting the corrected transfer before the end of the calendar year. This action protected the client from exposure to the significantly higher developer land tax rate.
Key issues included:
- A post-settlement transfer rejection by the land registry.
- An incorrect covenant number in the transfer documentation provided by the vendor’s side.
- The need to resubmit transfer documents using a non-routine process.
- Conflicting instructions from the bank on one side and the land registry and State Revenue Office on the other.
- A hard deadline of 31 December to avoid higher land tax consequences for the client.
Multiple stakeholders requiring alignment before the corrected transfer could proceed.
The Solution
Red Door Conveyancing implemented a multi-party rectification process to resolve the rejected transfer and protect the client from year-end tax exposure.
Key actions included:
- Identified the cause of rejection after the land registry rejected the lodged transfer due to the incorrect covenant number.
- Investigated the correction pathway required for resubmission in a non-standard post-settlement context.
- Coordinated directly with the bank to understand its required resubmission process.
- Liaised with the land registry and State Revenue Office to confirm registry-specific requirements and revenue process implications.
- Managed communication with the vendor’s solicitor regarding the original covenant error and necessary corrections.
- Worked through contradictory process guidance from different parties to achieve a compliant outcome.
- Prioritised completion before 31 December to ensure the client was not assessed at the higher developer land tax rate.
The Results
- 1 rejected transfer rectified and completed successfully after settlement.
- 31 December deadline achieved for final transfer completion.
- Higher developer-rate land tax avoided for the client.
- Multiple external parties coordinated across the bank, land registry, State Revenue Office, and vendor’s solicitor.
- Post-settlement registration risk resolved despite contradictory resubmission instructions.
- No additional client fees charged for the extra time spent resolving the issue.
- Client ownership position protected through successful correction of the covenant-related transfer error.
Summary
- Red Door Conveyancing represented a purchaser of land in Bonshaw, Victoria.
- An incorrect covenant number from the vendor’s solicitor caused a post-settlement land transfer rejection.
- Correction and resubmission were required before 31 December to avoid higher land tax exposure.
- The matter involved conflicting instructions from the bank, land registry, and State Revenue Office.
- Red Door Conveyancing coordinated all parties to resolve the rejection by the year-end deadline.
- The client avoided additional land tax and was not charged extra fees for the rectification work.
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