LBTT1004 - The effective date
The date at which the liability to LBTT arises (the tax point) is known as the effective date of the transaction. The effective date is also used to determine when other obligations in relation to the tax must be fulfilled, for example when a LBTT return must be made.
In the majority of cases the effective date of a land transaction is the date that the land transaction is completed (in other words the date of settlement or, in the case of a lease, the date when it is executed by the parties or constituted by any other means).
In a standard house purchase, the date of settlement is the date that the purchase price is paid by the buyer in exchange for the seller delivering the keys and disposition.
Circumstances where the effective date of a land transaction is not the date that the land transaction is completed include:
- substantial performance of a contract without completion - see LBTT1005;
- substantial performance of a contract requiring conveyance to a third party - see LBTT1006; and
- options and rights of pre-emption – see LBTT1007.
For further guidance on the effective date for land transactions involving leases see LBTT6002.
LBTT(S)A 2013 sections 63 and 64