Settlement adjustments allocate certain property outgoings between the seller and buyer for the relevant periods. They help account for bills already paid, amounts still owing and costs associated with the change of ownership. They are different from your conveyancer's fee or the deposit already paid.
Our conveyancing introduction service can connect you with an independent professional to explain your statement. The exact treatment depends on the jurisdiction, contract, property type and charge. The property settlement guide provides the broader sequence of events.
Identify the charge and the covered period
Council rates may cover a quarter or year, while water bills can contain separate service and usage components. Strata levies may involve different periods or special levies. Do not group these together without checking the underlying notices, certificates or account information.
Consumer Affairs Victoria says the seller is responsible for rates up to and including settlement day and the buyer from the following day. That is a Victorian explanation, not a national rule to apply to every line item. Ask your conveyancer which allocation date and contractual rules govern your transaction.
Read the statement line by line
- Which authority or body issued the charge, and what dates does it cover?
- Has the seller already paid it, or is an outstanding amount being paid at settlement?
- How many days are allocated to each party, and which day-count basis is used?
- Are water usage and service charges treated separately, and is a meter reading needed?
- Are levies, rent or other property-specific items included, and what does the contract say?
- Does each figure increase or reduce the buyer's amount due, and is the source evidence current?
A hypothetical prepaid-rates adjustment
Suppose the seller has paid a bill that covers a period extending beyond settlement. The adjustment may require the buyer to reimburse the seller for the buyer's allocated part. If the bill is unpaid, the statement may instead include arrangements to clear it. The principle is allocation without double counting, not an assumption that the buyer always pays the entire next bill.
This is a conceptual example, not a calculation for your purchase. Ask for the actual period, settlement date and supporting charge before checking the arithmetic. Special levies or tax-related outgoings can have distinct contractual and legal treatment; do not assume every cost can be passed to the buyer.
Separate adjustments from the total funds required
The funds needed can include the purchase balance, adjustments, duty, registration and professional costs, less the deposit and available lender advance as applicable. Ask for an itemised estimate early and the confirmed figure closer to settlement. A lender approval does not mean every settlement cost is funded by the loan.
If settlement moves, request an updated statement. Even a short delay can affect the day allocation or bring another bill into the calculation. For a tenanted property, clarify rent, arrears and other amounts rather than assuming the seller's usual rent collection schedule determines the adjustment.
Keep the evidence and verify payment instructions
Save the final statement and supporting information for future records. If a figure looks wrong, ask before authorising funds. Independently verify bank details through a trusted contact method; a revised invoice or email alone is not a safe basis for transferring settlement money.
After settlement
Will the adjustment stop me receiving future bills?
No. Authorities and strata bodies may continue issuing notices as ownership records update. Keep the settlement statement, confirm account changes and ask the conveyancer how to handle a bill that appears to overlap with an adjustment.
Sources and further reading
Consumer Affairs Victoria: settlement and outgoing adjustments
