[BUYING AND SELLING REAL ESTATE IN AUSTRALIA]
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Each State and Territory has their own statutory requirements, including the timeframe, the percentage of money to be forfeited and the notice requirements, except for Tasmania and Western Australia. Depending on the State or Territory, there may be some exceptions to the cooling off rights. Exceptions may include if the property is purchased at a public auction or within three days of auction or is over a specified size. It is important that legal advice is obtained if there is a statutory right to cool off and a purchaser wishes to exercise that right. If the cooling off right is not exercised in strict compliance with the relevant legislation, then a purchaser will be legally bound under the contract. Registration fees Each State and Territory has its own land titles registry office which charges a registration fee for transferring the ownership of the property. This transfer fee is charged in addition to any stamp duty which may be payable on the property transfer. The transfer of land registration fees vary depending on the State or Territory and are often calculated on a sliding scale according to the purchase price. Registration fees are also charged to register any other dealing against the property title (such as a mortgage or caveat). PEXA fees PEXA is an electronic lodgement platform, which enables property settlements to occur electronically online and in real time. PEXA is currently operating in Victoria, Queensland, New South Wales, South Australia, Western Australia, and the Australian Capital Territory. This electronic process has replaced the former paper settlement method. PEXA allows the parties to a property transaction to settle, stamp and register the transfer of the property online. All parties to the conveyancing transaction are charged a PEXA fee. This fee
New residential premises (that are not created through substantial renovations or commercial residential premises); and Potential residential land that is included in a property subdivision plan at the time of supply (i.e., settlement of the transaction), where:
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The land does not contain buildings used for commercial purposes; The recipient is not registered for GST and does not require the land for a creditable purpose.
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A vendor of residential premises or potential residential land must give the purchaser written notice before making a supply. The notice must contain details as to whether the purchaser will be required to make a withholding payment. The notification requirements also extend to existing residential premises even if the supplier is not registered or required to be registered for GST. Failure to comply with the scheme is a strict liability offence. OTHER IMPORTANT CONSIDERATIONS Cooling off Generally, once a contract of sale for property has been properly entered into, it is binding on the parties. However, in Australia, certain States and Territories have legislation which provides a purchaser of residential property with a statutory right t o “cool off” under a contract. The cooling off right means that subject to certain conditions being met, a purchaser may bring the contract to an end by notice in writing to the vendor. The cooling off right has to be exercised within a specified period of time from when the contract of sale was signed (usually 3-5 business days).
ILN Real Estate Group – Buying and Selling Real Estate Series
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