Adjustments make sure a buyer and seller each pay their fair share of rates and levies for the period they actually own the property, here's how the calculation works.
Council rates, water rates, and (for units) strata levies are usually paid in advance for a quarter or year. Since ownership changes mid-period, settlement adjustments correct for that so neither party overpays.
If the seller has prepaid a full quarter of council rates but settlement happens partway through, the buyer reimburses the seller for the remaining days at settlement. The reverse applies if rates are owing rather than prepaid.
The same logic applies to quarterly strata levies, common across Sydney apartment buildings, and to water usage charges where they're separately metered.
Adjustments are calculated in the settlement statement your conveyancer prepares before settlement day, so the final figure you pay (or receive) already accounts for them, there's no separate bill afterwards.
Your conveyancer calculates them as part of the settlement statement, using current rates notices and levy information.
Yes, if the figures are wrong or based on outdated notices, it's worth reviewing the settlement statement before the day.
Adjustments are routine and shouldn't hold any surprises, ask your conveyancer to walk you through the settlement statement before the day so the final numbers make sense.
Get a fixed-fee quote and speak directly to the person who'll handle your matter.
This article is general information only and does not constitute legal advice. For advice on your specific circumstances, please get in touch.