What are settlement adjustments, and who pays them?

A settlement adjustment is the recalculation of prepaid or outstanding property charges — mainly council rates and water charges — so that a seller and buyer each pay only for the days they actually owned the property. If the seller has already paid a rates instalment that covers weeks or months after settlement, the buyer generally reimburses them for that unused portion. If money is instead owing on an unpaid instalment for the period before settlement, the seller generally covers it.

Neither side gets a separate bill from the council or water authority for this. The adjustment is worked out by the conveyancers or solicitors acting for each party and shows up as a credit or debit in the settlement figures on the day the property changes hands — not as a new cost, but as a fair split of money already paid or still owing.

What gets adjusted at settlement?

The list is shorter than most buyers expect. Charges tied to the property itself — rather than to how much of a service someone actually used — are the ones that typically get apportioned.

Typically adjusted	Typically not adjusted
Council rates	Electricity usage
Water service charges	Gas usage
Strata or body corp levies	Phone and internet plans
Land tax, where it applies	Contents insurance

Council rates

Local councils bill rates annually or quarterly. Whichever party paid the current instalment gets reimbursed, dollar for dollar, for the days after settlement that instalment still covers.

Water rates and usage

Water authorities generally split their charges into a fixed service (or access) charge and a usage charge based on metered consumption. The fixed charge is adjusted the same way as council rates. As at July 2026, Sydney Water confirms usage charges are treated the same way in NSW: a conveyancer can arrange a special meter reading close to the settlement date so usage up to that point is adjusted between buyer and seller, rather than left for whoever holds the account when the next quarterly bill lands. Other states’ water authorities run their own certificate and meter-reading processes, so ask your conveyancer how usage is handled by your local water authority.

Strata levies and land tax, where they apply

Strata or body corporate levies are adjusted the same way as council rates when the property is part of a scheme. Land tax is different again: it’s assessed on the seller’s landholdings, not the property alone, so whether — and how — it gets adjusted between buyer and seller varies by state. As at July 2026, Revenue NSW confirms that any land tax adjustment between buyer and seller in NSW is a private condition set out in the contract of sale — Revenue NSW doesn’t mandate or influence it either way. Victoria takes the opposite approach: since 1 January 2024, vendors have been banned by law from passing land tax on to the buyer through the contract of sale, for sales below a CPI-indexed threshold (around $10.4 million as at 2025). Other states set their own rules again, so this is one to confirm with your conveyancer rather than assume either way.

How is a settlement adjustment calculated?

The underlying arithmetic is a daily rate applied to however many days of a paid (or unpaid) period fall on the other side of settlement.

Daily rate = annual charge ÷ 365 (366 in a leap year) Adjustment owed = daily rate × the number of days the paying party didn’t actually own the property

Whether the settlement date itself counts as the seller’s day or the buyer’s day is set by the standard contract conditions used in each state, not by one uniform national rule. As at July 2026, under the standard NSW Contract for the Sale and Purchase of Land, the seller stays entitled to — and liable for — rates, water and other adjusted outgoings up to and including the settlement (or agreed adjustment) date, with the buyer taking over from the day after. Other states run the same basic principle through their own standard contract wording, so the safest approach is to check the adjustment date defined in your own contract rather than assume it matches this.

Does this differ from stamp duty or a conveyancer’s fee?

Yes, on both counts. Stamp duty is a one-off state government property-transfer tax rather than a split of an existing bill, and it has nothing to do with rates or water adjustments. As at July 2026, Moneysmart notes it’s typically payable within 30 days of settlement, under rules set by the relevant state revenue office.

Working out the adjustment figures is one of the tasks your conveyancer handles as part of settlement — see what a conveyancer actually does for the fuller list. There’s no published standard fee range for conveyancing itself; NSW Government’s conveyancing guidance describes the service without quoting a price, so ask for a quote rather than expect a set figure.

Does the process differ by state?

In its mechanics, yes. Each state and territory uses its own standard contract of sale, and settlement adjustment practice sits inside those conditions rather than in one national rulebook. As at July 2026, standard NSW conveyancing practice has the buyer’s solicitor or conveyancer prepare a draft statement of adjustments and send it to the seller’s side for review and agreement, typically in the final one to two weeks before settlement, with the figures signed off on or just before settlement day itself. Other states follow the same broad shape — a draft prepared ahead of time, finalised close to settlement — but who prepares it and the exact timing can differ, so this is worth confirming with your own conveyancer early rather than assuming it matches the description above.

Other parts of the buying process vary by state in the same way. Cooling-off periods, for instance, are set individually by each jurisdiction — as at July 2026, verified here only for NSW (5 business days from exchange), VIC (3 clear business days) and QLD (5 business days); other states and territories aren’t covered in this guide. The safest general rule for any state-specific mechanic in this process is to confirm it against your own contract rather than assume it matches another state.

What should buyers weigh before settlement day?

There’s no single number to plan around, because the size and direction of a settlement adjustment depends on your own settlement date and the property’s billing cycle — not on anything you can look up in advance. A few factors do shape it:

• Timing within the billing period. Settling shortly after the seller paid a rates or water instalment usually means a larger reimbursement to them; settling near the end of a paid period usually means a smaller one.
• Which way the adjustment runs. It can go either direction — you might receive a credit if the seller owed money for their period of ownership, or need extra funds if they’d prepaid ahead.
• Other costs landing around the same time. Settlement adjustments are only one of several costs that sit outside the purchase price and the deposit — see our guide to the other costs of buying a home for the rest.

How much headroom to keep for all of this depends on your own contract and settlement date — a licensed conveyancer working from your actual paperwork is who can put a number on it, not a general guide.

Who works out the actual adjustment figures for your purchase?

Your conveyancer or solicitor does — drafting the figures from council, water and other certificates and then reconciling them against your own rate notices before settlement. That’s part of why the role exists: the exact figures depend on your settlement date, your council and water authority’s billing cycle, and your specific contract, so this article can’t calculate them for you. If you’re still working out how much you’ll need before you even get to this stage, see our guide to how much deposit you need for a first home in Australia — and for how settlement fits into the wider process, see our step-by-step guide to buying a house in Australia.