Selling a Perth Hotel: Why Council Rates and Land Tax Need Separate Records

An outgoings figure can look straightforward until the purchaser asks how it was assembled. Council rates may relate to the hotel property, while the seller’s land tax assessment may include other land held in the same ownership. When selling a Perth hotel, combining those documents into one unexplained annual expense can obscure the information buyers need.

Prepare records identifying the property, assessed owner and period for advisers to examine.

Identify the property’s Council assessment

For a hotel within the City of Perth, Council explains that rates are calculated using the property’s Gross Rental Value, determined independently by Landgate, and the annual rate in the dollar. Minimum rates can also apply. The City’s adopted 2026/27 differential rating categories include a Hotel category. City of Perth

Obtain the current notice and check the property description, assessment number, rating category and period. Show general rates and other listed charges separately. Include relevant amended notices rather than relying only on a payment appearing in the bank account.

For hotels elsewhere in metropolitan Perth, obtain the relevant local government’s records. City of Perth categories should not be presented as the rating system for every Perth suburb.

Explain the ownership behind land tax

RevenueWA assesses land tax using the aggregated taxable value of non-exempt land held in the same ownership at midnight on 30 June. Its guidance explains that holdings in different capacities may be assessed separately. wa.gov.au

The seller’s notice may therefore reflect more than the hotel site. Identify the assessed owner and landholdings, then ask the accountant or tax adviser to explain any amount attributed to the hotel in the sale material.

Avoid presenting an allocation from a combined assessment as a standalone property assessment. Label the allocation method and keep the supporting calculation available for authorised due diligence.

This matters particularly when the operating business and property ownership sit in different entities. Establish which entity incurred the assessed amount and whether the accounts record a payment, reimbursement or recovery under an agreement.

Use current settlement enquiries

RevenueWA’s guidance for settlement agents identifies a Certificate of Land Tax Charges as a way to obtain information about outstanding tax applied to a lot. It explains that the certificate includes proportionate land tax and a single ownership figure, and that a certificate issued before assessment is an estimate. wa.gov.au

Have the settlement agent obtain the appropriate current enquiries and explain the figures. A historical tax notice in the information memorandum should not replace transaction-specific checks.

WA Consumer Protection’s property settlement guidance describes adjustment of rates and other outgoings between seller and purchaser. For a hotel transaction, have the parties’ advisers confirm the adjustments required by the actual contract and settlement circumstances. LGIRS

Keep the ongoing cost presentation separate from any settlement adjustment. An adjustment is part of completing the transaction; it should not be mistaken for an additional recurring operating expense.

Check any contractual recovery

Where an operator reimburses a property owner, provide the relevant agreement and supporting records. Identify what can be recovered, the basis used and any unresolved reconciliation.

Ask advisers to distinguish the statutory assessment from obligations between the contracting parties. Do not assume that a payment made by the outgoing operator establishes the incoming operator’s responsibility. A business sale, property sale and change in company ownership can require different analysis.

Will the purchaser pay the seller’s land tax amount?

Do not use the seller’s historical assessment as a promise about the purchaser’s future liability. The purchaser should obtain advice based on their proposed ownership, other holdings, relevant assessment date and any applicable exemption. Existing exemption treatment should also be independently checked.

Present verified historical expenses as historical information, with their basis explained. This supports useful comparison without inventing a buyer’s future tax position.

Prepare your Perth hotel sale

Contact Norton’s Resort Brokers for a confidential discussion about selling your hotel. Email nortons.re@gmail.com to discuss preparing clear property and business information for prospective purchasers.

Disclaimer: This article is general information, not legal, taxation or accounting advice. Assessments, exemptions, recoveries and settlement adjustments depend on ownership, agreements and current law. Obtain independent professional advice and current authority records; historical costs do not guarantee a purchaser’s future liability.