[BUYING AND SELLING REAL ESTATE IN AUSTRALIA]
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with foreign beneficiaries who purchase property. Landholder duty Each State and Territory has its own landholder duty regime, which imposes duty on certain acquisitions of interests in companies and unit trusts that own land. Economic entitlements A person who acquires an economic entitlement (defined broadly to include the entitlement to participate in the income, rent or profit of the land, proceeds of sale or capital growth) in relation to land is taken to have acquired a beneficial ownership of the land. If the arrangement does not specify the percentage of economic entitlement, it is deemed that the person has acquired a 100% interest in the relevant land and duty will be payable on the full value of the interest. Verification of identity It is a requirement of the land titles office in each State and Territory that the identification of the parties in a property transaction be verified (“ VOI ”) . VOI checks are intended to protect against identity theft and fraudulent land title transactions. This VOI requirement applies to individuals as well as corporate entities. The existence of the company must be confirmed and the identity of the persons signing on behalf of the company must be verified. If an attorney has been appointed under a power of attorney, the attorney’s identity must also be verified. Solicitors are required to certify to the relevant land titles office that the VOI checks have been completed. This verification process is particularly important due to property transactions in Australia now being settled online using PEXA. Verification checks are usually completed by a solicitor for the party or Australia Post. “Reasonable steps” are required
to verify the identity of a party. The Australian Registrars National Electronic Conveyancing Council has issued a “verification of identity standard” (“ Standard ”) . If the Standard is followed, then that person is deemed to have taken reasonable steps. If a person resides overseas, the VOI check can be undertaken by a notary public who certifies that they have verified the identity of the party and provide certified copies of the identity documentation (e.g., passport and driver’s licence) . The VOI documentation is considered valid for 24 months and can be relied upon across multiple
conveyancing transactions. Adjustments at settlement
In addition to the payment of the price and GST (if applicable) by the purchaser to the vendor at settlement, there is an adjustment of certain annually payable outgoings. Subject to the terms of the contract, certain outgoings are apportioned between the vendor and purchaser. The vendor is usually responsible for all outgoings up to and including the day of settlement and the purchaser is responsible for all outgoings from settlement. The outgoings which are commonly adjusted are council rates, water rates, land tax, owner’s corporation fees/levies and rental income (as applicable). Settlement – using PEXA PEXA is an electronic lodgment platform that enables legal practitioners, conveyancers and financial institutions to prepare, lodge and register land registry documents and effect property settlements online in real time. Using PEXA has led to a significant reduction in the manual processing of paperwork by allowing land registry documents to be lodged electronically. PEXA also facilitates the transfer of funds in real time. Agents It is common to engage a real estate agent
ILN Real Estate Group – Buying and Selling Real Estate Series
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