When you own a property, you are required to pay council and water rates. Additionally, you may have to pay owner’s corporation (OC) fees if the property is part of a body corporate (typically the case for apartments). If you do not live in the property, you will also have to pay land tax. These rates become due at different parts of the year for different cycles, for example, council rates are paid per financial year, so the billing cycle is from July 1stthrough to June 30th(even if you pay in quarterly instalments). Land tax is charged by calendar year, that is January 1stto December 31st.  Water and OC fees are generally billed quarterly (this can vary). When we talk about adjustments, your conveyancer is essentially ensuring that there are no outstanding debts at settlement, and that the purchaser is contributing towards their fair share of fees within the aforementioned billing cycles i.e. each party is paying for the exact amount of time they own the property, up until the end of the billing cycle that the settlement date falls in.
For example, let’s say the total council rates for a property came to $1000, and settlement was on January 1st. The vendor would pay the full $1000 for the financial year billing cycle. The purchaser’s conveyancer would then adjust for this so that the purchaser is contributing $500 back to the vendor at settlement, therefore each party is paying for the period of time that they will be in control of the property up until the end of the billing cycle. The same process applies to all the relevant rates and taxes that are applicable to the property, within their respective billing periods. These will be detailed to you on your statement of adjustments, which will typically outline how many days the purchaser ‘allows for’- i.e. the number of days between settlement and the end of the billing cycle that the purchaser is reimbursing the vendor for. On average, a purchaser might like to put aside around $3000 to budget for this allowance.
A good conveyancer will obtain updated certificates and/or contact the relevant water, council and OC authorities prior to settlement to ensure that the property transfers to the purchasing party free of any outstanding debt, and to ensure that any outstanding interest (for example if the vendor has overdue fees) or special levies are accounted for (note: special levies that are struck before the contract is signed are the responsibility of the vendor; those struck after the contract is signed are the responsibility of the purchaser- these are not adjusted at settlement). Your conveyancer is responsible for ensuring that funds are paid to the correct authorities, and that these same authorities receive notices of acquisition to ensure the purchasing party receives ongoing rates notices.