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Kooky
Builder of Shaka, the payment router that pays every agent their commission on closing date.
About Kooky and Shaka →A buyer agrees to pay $800,000 for a house. A few days before settlement the buyer's conveyancer sends a statement asking for a slightly different sum, worked out to the cent. Nothing has been renegotiated. The difference is the adjustments: the arithmetic that shares the running costs of a property between the person who owned it until settlement day and the person who owns it afterwards.
Adjustments are rarely large, but they are the part of a settlement statement that people most often ask about, and each line follows a rule. This guide explains those rules as they appear in the standard contract published by the Real Estate Institute of Queensland and the Queensland Law Society, in its first edition dated August 2025. It covers council rates, water, land tax, rent and body corporate levies, then works through an example. The contract actually signed, and any special conditions in it, decide what applies in a given sale.
Why the amount paid is not the price
A property goes on costing money while it is being sold. Council rates are levied for a period, usually a quarter, that pays no attention to the settlement date. Water keeps running through the meter. Land tax is assessed for a whole financial year. If a tenant is in place, rent is paid in advance for a week or a fortnight at a time.
On settlement day some of those bills will have been paid by the seller for time the buyer will own the property. Others will be unpaid and will arrive, addressed to the new owner, for time the seller was still there. Adjustments correct both. They do not change the price; they change the balance payable so that each side ends up having carried the costs of its own period of ownership.
Related readWhen settlement is delayed in Queensland: what waiting costs, who paysThe rule: one day belongs to the seller
Clause 3.4 of the standard contract states the principle in one sentence. Rent and outgoings are to be apportioned so that the seller is liable for outgoings and entitled to rent up to and including the settlement date, and the buyer is liable for outgoings and entitled to rent after it.
Settlement day itself is therefore the seller's day. The Queensland Government's guidance for home sellers puts it the same way: the seller is responsible for the rates up to and including the day of settlement, and the buyer starts paying the next day.
Everything else is counting. A bill is divided by the number of days in the period it covers, and the daily figure is multiplied by the days each party owns the property within that period.
Settlement day is counted as the seller's
Under clause 3.4 the seller carries outgoings and keeps rent up to and including the settlement date. A buyer who settles on the 20th starts paying from the 21st. When a settlement date moves, every adjustment moves with it and the statement has to be redone.
What counts as an outgoing
The contract defines outgoings as rates or charges on the land by any competent authority, and gives council rates, water rates and fire service levies as examples. Land tax is included as well, unless the reference schedule at the front of the contract records that no adjustment is to be made for land tax.
The definition is about charges on the land. It does not reach the seller's personal bills. Electricity, gas, internet and home insurance belong to whoever holds the account, and are closed and opened by the parties themselves. They do not appear on a settlement statement.
Rent is handled by its own clause, and the contract defines it as any periodic amount payable under the tenancies being sold with the property.
Related readWhen the settlement system stops: outages and what happens nextCouncil rates: paid, unpaid or not yet issued
Rates are the adjustment almost every sale has. Brisbane City Council, for example, describes its rates as quarterly, and says a rates balance enquiry shows the quarterly rates, the property description and the current financial position of the account, including any arrears. It tells owners that they or their solicitor need to request the balance when a property is bought or sold. Other councils bill half-yearly, so the period being divided can be as long as six months.
Clause 3.5 of the contract sets out which figure is used, depending on the state of the account.
| State of the bill | Figure used | Who pays whom |
|---|---|---|
| Paid by the seller | The amount paid | Buyer repays the seller for the days after settlement |
| Assessed but unpaid | The amount payable, ignoring any discount | Paid to the council from the settlement money; the seller bears the days to settlement |
| Not yet assessed | The amount the authority says will be assessed, or failing that the latest assessment, ignoring any discount | Seller allows the buyer the days up to settlement |
Standard contract (08/25), clauses 3.5(1) and 3.5(7).
Two points in that clause are often missed. The first is the discount. Many councils reduce a bill that is paid by its due date. Where a bill is unpaid or not yet issued, the contract adjusts on the full amount, leaving the discount out. The second is what happens to an unpaid bill. Clause 3.5(7) says that in an electronic settlement the financial settlement schedule must direct payment of an assessed but unpaid outgoing to the authority. Once it has been deducted in that way, the bill is treated as paid for the purpose of the adjustment. The buyer does not inherit the seller's overdue rates notice.
Newly subdivided land has a rule of its own. If there is no separate rates assessment for the lot at settlement and the council will not apportion one, clause 3.5(2) divides the assessment for the larger parcel by area, and divides any charge levied per lot by the number of lots.
Related readWhere the deposit sits until settlement: trust accounts in a saleWater: a reading taken for the sale
Water cannot be divided by days alone, because part of the bill depends on how much was used. The contract's answer is a meter reading taken close to settlement.
Under clause 3.5(6), outgoings that depend on water usage are adjusted on the charges that would be assessed for the whole billing period if the rate of use shown by a meter reading taken before settlement continued throughout that period. The buyer obtains the reading and pays for it.
Proctor, the Queensland Law Society's journal, explained how this works for one large provider in an article of February 2021 on Urban Utilities, which serves the Brisbane, Ipswich and Scenic Rim areas among others. It reported that the utility does not calculate adjustments for property transfers itself, and that solicitors and conveyancers do the sums from a special meter reading. It also reported that the utility was moving, in stages between September 2020 and February 2022, to bill its service charges in arrears instead of in advance.
The method Proctor described has two parts. The fixed service charge is adjusted by multiplying the daily service charge by the number of days between the special reading and the settlement date. The usage charge is adjusted by multiplying average daily consumption by the same number of days. Because water is generally billed after it is used, this adjustment usually runs in the buyer's favour: the seller allows the buyer an amount for water the seller has used but has not yet been billed for.
Related readAfter settlement: registration, keys, notices and what arrives laterWithout a special reading there is no measured basis for adjusting usage. Proctor's article put it directly, saying water charges can be adjusted only if the buyer pays for the reading.
Land tax: two bases and a search
Land tax is the adjustment that surprises people, because many sellers do not pay it and many buyers never will. The Queensland Revenue Office assesses it on freehold land owned at midnight on 30 June, for the financial year that follows, and an owner-occupied home is generally exempt. It matters at settlement for two separate reasons.
The first is the adjustment between the parties. Clause 3.5(3) says the seller is liable for land tax assessed for the financial year current at settlement. The contract then asks the parties to choose, in the reference schedule, how the buyer's share of that year is worked out. Clause 3.5(4) gives two bases.
On the single holding basis, land tax is adjusted on the assessment the Revenue Office would issue if the property were the seller's only land. On the seller's actual liability basis, it is adjusted on the assessment actually issued or to be issued to the seller. The gap between the two can be wide. Land tax rises with the total value of everything an owner holds, so a seller with several properties pays more on each than a seller with one. The single holding basis shields the buyer from that. A third choice is to record that no adjustment is made for land tax at all.
Where the lot has no site value of its own, clause 3.5(5) builds a notional one: the site value of the larger parcel multiplied by the lot's area and divided by the parcel's area.
Related readARNECC briefs industry on tighter rules for settlement platforms and firmsThe second reason is protection. The Revenue Office says unpaid land tax is a first charge over land, which may or may not be registered on the title, and that buyers obtain a land tax clearance certificate to check whether tax is owing before they buy. An application returns either a clearance or advice of what is owed. If tax is owing and the Revenue Office has advised the amount needed for clearance, clause 3.5(3) has it paid at settlement to the Commissioner of State Revenue out of the settlement funds. The Revenue Office adds that a certificate is valid until 30 June, so a sale that crosses the end of the financial year may need a fresh one.
Rent, when a tenant stays
A property sold with a tenant brings rent into the statement. Clause 3.6 separates three situations.
Rent for a rental period that ended on or before settlement belongs to the seller and is not adjusted. Rent that has already been paid for the period that includes settlement day, or for later, is adjusted at settlement: the seller hands the buyer the part that covers the days after settlement. And rent for the current period that the tenant has not yet paid is left alone until it is paid, so the seller is not made to allow for money that has not arrived.
Later changes are covered too. If rent for a period that included settlement is reassessed afterwards, the extra payment or refund is shared on the same principles, and clause 3.6(5) requires the parties to pay each other within 14 days of being notified, though only once any extra payment has been received from the tenant.
Related readAUSTRAC guidance: delayed checks due 28 days in, or 3 before settlementThe bond is not an adjustment. It is held by the Residential Tenancies Authority, not by the seller, and the contract lists a bond transfer notice among the documents the seller delivers at settlement, along with the tenancy agreement and evidence of the date of the last rent increase. The right to chase rent that was overdue before settlement is not passed to the buyer.
Body corporate levies
For a unit or townhouse, body corporate contributions are apportioned in the same spirit. The contract's body corporate clauses make the seller responsible for levies up to settlement, with the usual daily split for a levy period that straddles the settlement date. Special contributions follow a date test instead of a daily one: those levied after the contract date fall to the buyer. The figures come from the body corporate's records, which the buyer's side searches before settlement. A unit sale therefore has one more line on the statement than a house sale, and one more search behind it.
The smaller lines
A few other entries can appear.
Smoke alarms: clause 7.9 requires the seller to have compliant smoke alarms installed in a dwelling by the settlement date. If the seller has not, the buyer is entitled to an adjustment equal to 0.15% of the purchase price, provided it is claimed in writing on or before settlement, and that adjustment is the buyer's only remedy under the clause. On an $800,000 purchase, 0.15% is $1,200.
Late settlement: if the buyer has been late in paying an amount under the contract and the sale then proceeds, clause 9.9 says default interest for the period before settlement is payable at settlement, so it appears as a line in the seller's favour.
Related readElectronic conveyancing in Queensland: how a settlement completesBank cheques: these matter only in a paper settlement. Clause 3.7 makes the buyer bear the cost of cheques payable to the seller or the seller's mortgagee, and has the seller reimburse, as an adjustment, the cost of cheques the seller asks to be drawn to anyone else.
A worked statement
The example below uses invented figures to show how the lines combine. Assume a house sold for $800,000 with a $40,000 deposit already paid, settling on 20 August. Council rates of $552 for the quarter from 1 July to 30 September, a period of 92 days, have been paid by the seller. A special meter reading shows water charges accruing at $2.10 a day, with 40 unbilled days up to settlement. The seller is an investor, the contract adjusts land tax on the single holding basis, and the land's site value of $700,000 would produce an assessment of $1,500 for the year on the Revenue Office's rates for individuals, which the seller has paid.
The seller owns the property for 51 days of the rates quarter, from 1 July to 20 August, and the buyer for the other 41. At $6.00 a day, the buyer repays the seller 41 days, or $246.00. For land tax, 51 days of the 365-day financial year are the seller's and 314 are the buyer's, so the buyer repays $1,500 multiplied by 314 and divided by 365, which is $1,290.41. For water, the seller allows the buyer 40 days at $2.10, or $84.00.
| Line | Calculation | Amount |
|---|---|---|
| Purchase price | As agreed | $800,000.00 |
| Less deposit paid | Held by the deposit holder | -$40,000.00 |
| Plus council rates | 41 days at $6.00, paid ahead by the seller | +$246.00 |
| Plus land tax | 314 of 365 days of $1,500 | +$1,290.41 |
| Less water | 40 unbilled days at $2.10 | -$84.00 |
| Payable at settlement | Sum of the lines | $761,452.41 |
Illustrative figures only. Method follows clauses 3.4 and 3.5 of the standard contract (08/25).
The buyer in this example pays $1,452.41 more than the balance of the price. Had the rates been unpaid, the direction of that line would reverse: the full bill would go to the council from the settlement money, and the seller would bear the 51 days that were the seller's.
Checking the figures
A buyer or seller is entitled to understand the statement before agreeing to it, and the contract supplies some tools.
- SearchThe buyer's side obtains the rates balance, the water reading, the land tax result and, for a unit, the body corporate figures.
- ApportionEach charge is divided by the days in its period and split at the settlement date.
- AgreeBoth representatives accept the statement, and the figures go into the settlement schedule.
Under clause 3.4(2), a buyer may ask the seller in writing for a statement, backed by reasonable evidence, of any outgoings and rent that cannot be found by searching public records, together with any other information reasonably needed to do the apportionment. If the seller learns that something in it has changed, the seller must supply the updated information as soon as practicable.
Three questions catch most errors. Is the settlement date in the statement the current one, including any extension? Has each bill been treated according to whether it is paid, unpaid or not yet issued? And does the land tax line use the basis ticked in the reference schedule? A statement that passes those tests will almost always be right to the cent.
Adjustments are bookkeeping, and they are meant to be dull. Their purpose is that neither side pays for a day of someone else's ownership, and the contract's rules, read line by line, deliver that.
Kooky, from Shaka
Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
