[BUYING AND SELLING REAL ESTATE IN AUSTRALIA]
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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. Stamp duty payable on acquisition of land (or an interest in land) If you acquire property in Australia, each State and Territory requires ‘stamp duty’ to be paid on the acquisition. Stamp duty is charged at a flat rate or an ad valorem rate (based on the value of the transaction). The rate of duty payable on a property acquisition varies between each State and Territory. It can also depend on whether or not you are an ‘owner - occupier’ or an investor. In some cases, the location and nature of the property (whether rural or suburban) can affect the rate of duty payable. The timeframe for paying stamp duty varies for each State and Territory and there are various stamp duty concessions and exemptions available. Generally, stamp duty is payable by the purchaser. It is important to understand how much stamp duty is payable in any property transaction and to obtain legal advice. Depending on the State or Territory, you may be able to apply for a stamp duty exemption or reduction. This is generally where there is no change in the underlying ownership. In Australia, first home buyers can apply for a stamp duty concession and in some States, pensioners can also apply for a concession.
• If the property was acquired by the vendor after 1 July 2000 (i.e. after GST was introduced). If the property was owned by the vendor as of 1 July 2000, then GST is calculated on the margin or difference between the valuation of the property as of 1 July 2000 and the sale price. If the property was acquired by the vendor after 1 July 2000, then GST is calculated on the margin or the difference between the acquisition cost (i.e. what the vendor paid for the property) and the sale price (i.e. what the vendor is now selling the property for). Assuming the margin scheme is available, the parties must agree in writing that it applies. Such agreement is usually contained in the contract, but it can sit outside of the contract. GST Withholding Regime Since 1 July 2018, purchasers of certain types of residential premises and potential residential land which are subject to GST are required to withhold GST from the settlement proceeds payable to the vendor and pay it to the ATO. 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 to “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). Each State and Territory has their own statutory requirements, including the
ILN Real Estate Group – Buying and Selling Real Estate Series
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