Conveyancing is the process of transferring a property title from one person to another. It’s a lengthy process regulated by a set of laws, and can be quite complex. It can also be quite intimidating, which is one of the reasons why it’s a good idea to hire professional to help you through conveyancing. It’s important to understand all the rules and regulations that govern the process and ensure you’re aware of the recent changes. Making mistakes during the conveyancing process can prove to be expensive and cause legal trouble down the line. All new laws are introduced to protect the interests of everyone involved and to ensure all participants follow the law. The new changes are also introduced to streamline the workings and make it less complex.
The new conveyancing requirements
These requirements were introduced recently and include both traditional and electronic conveyancing to make both transactions more secure.
- Vendors must provide a land tax certificate to purchasers – Furnishing the land tax certificate will showcase that the property doesn’t have any tax liens pending and the buyer doesn’t have to worry about any additional expenses. It also protects the buyer from paying tax that’s overdue and must be paid by the previous owner. This means the original owner will have to pay the overdue amount before completion of the contract.
- Vendors must obtain a Foreign Capital Gains Tax Exemption Certificate – This is only required for properties valued over $750,000 but is essential to carry out the transaction legally. This measure was introduced to ensure foreign investors don’t avoid tax by buying property on Australian soil. The certificate is issued by Australian Taxation Office or ATO and must be presented to the buyer before completion of the agreement. This protects the vendor as the buyer can’t hold back 12.5% of the purchase price and remit it to the ATO as withholding tax.
- Bylaws must now be annexed to strata contracts for sale – By-laws are a set of rules that owners of the property, tenants, and even the visitors must follow. These can vary from one strata scheme to another, which is why it’s essential to understand them before committing to a purchase. Vendors are now required to include bylaws in strata contracts to ensure the buyers have all the information they need and sign the contract with their open eyes.
- Pool compliance certificates or non-compliance certificates must be annexed to contracts – No property with a pool can be sold legally if it doesn’t have a valid compliance, non-compliance, or occupation certificate. These certificates also need to be annexed into a Lease or Residential Tenancy Agreement for them to be considered valid. They also need to be annexed into the Sale Contract for it to be considered complete. Sale of pool properties without this certificate is illegal and carries considerable risk.
- Purchasers must sign a purchaser declaration form – The government has levied a 4% surcharge on property purchases by foreign persons and entities, which is why buyers need to provide the declaration on every purchase. It must be submitted to Office of State Revenue to help calculate the amount of tax applicable.
If you want to know more about electronic conveyancing, don’t hesitate to get in touch with us at The Conveyancing Shop today. You can call us at 02 9686 3366 or contact us through this form.