Purchasing a property is usually a huge milestone in most people’s lives. Whether you are purchasing your first home, upgrading to a larger property or purchasing an investment property, buying a house is an extremely exciting time. However, during this time, it is important to realise that the purchase price is not going to be the only cost associated with securing your new property!
When budgeting for your property purchase, it is important to make sure you consider all financial aspects of the transaction. One of the key costs that is often overlooked by prospective buyers is Transfer Duty, which is more commonly known as ‘Stamp Duty’ (even though it hasn’t officially been called this for many years!).
Stamp Duty is a tax owing to the State Government’s Office of State Revenue on most ‘dutiable transactions’. A dutiable transaction includes purchasing a property or transferring an interest in a property, either from one person to another or into a separate entity (eg. transferring from a person to a Trust or Company). Stamp Duty is calculated based on the higher of the purchase price payable or the value of the property in the transaction, meaning that the amount payable can vary significantly. It also means that in many cases where you are receiving an interest in a property for free or at a discounted price, stamp duty will still be payable on the total value of the property.
You may be eligible for certain stamp duty concessions or exemptions, depending on your situation and whether you meet the specific criteria applicable. For example, first home buyers who are purchasing a property for under $500,000.00 may be eligible for the first home concession. This concession can only be accessed by a person that has never owned property anywhere in the world, who is purchasing the property as an individual (eg. not using a Trust or company).
Buyers who have owned a property previously but are purchasing the property in question as their primary residence, may be eligible for the home concession.
If you are purchasing a property in a Company or Trust, you will not receive the first home or home concession despite you living in the property and you will need to pay stamp duty at the highest rate.
Whilst purchasing a property is the most common scenario in which the obligation to pay stamp duty will arise, there are several other situations in which it may need to be paid. Check out our EL's recent video, 'Stamp Duty Explained', for more details regarding some of the other common scenarios in which stamp duty will be payable.
When you are thinking of purchasing your next home, don’t forget to consider how much Stamp Duty you will be payable in addition to the purchase price, how you are going to fund the payment of stamp duty (eg. if you are getting finance, will you need to add it to your loan) and what Concessions or Exemptions you may be able to apply for.
If you would like come clarification on what Stamp Duty you will be paying on the purchase of your next property, contact EL's Property Conveyancing team today:
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When buying or selling your property and going through the conveyancing process, it's not uncommon for both the buyer and the seller to have a lot of questions.
These can relate to from how the entire process works, to specific questions about the documents you receive from us. Below are just a few of the questions we often get asked at Enterprise Legal and their answers!
Yes, it is important for both Buyers and Sellers to get the draft contract reviewed. Small administrative errors such as misspelt names or incorrect property details have the potential to cause delays of Settlement or even financial loss when getting the contract amended. It is also important to be aware of all of your rights and obligations under the contract before signing and to ensure everything that has been agreed between the parties is documented correctly prior to signing.
Conveyancing in Queensland is guided by a considerable number of State and Federal Legislations as well as specific guidelines which need to be followed. Due to this it is critical that we provide you with as much information as possible outlining your rights and obligations under the contract and equally obtaining as much detail of yourselves and the property to ensure we can meet all of the requirements. It is, after all, a substantial investment you are making! Our First Letter Pack contains a questionnaire that we require you to complete which will provide us with all the information you know about the property, so we then have that knowledge and we can tailor our advice to you based on your specific circumstances and the property.
The essential searches that we undertake are completed for multiple reasons. Searches like Rates and Water Meter Readings are done to ensure that at Settlement, the correct adjustments can be made to account for the Sellers portion of the levies for the current period and that any unpaid rates with Council have been paid. Searches like QCAT and Court Searches ensure that there are no proceedings against the Sellers and/or there is nothing affecting the seller’s ability to sell the property. It is important to do these searches now to avoid potential consequences later or even after Settlement.
Once Settlement has taken place, we will give you a call to confirm the exciting news. We then confirm with the Agent that they are authorised to release the deposit to the seller and to release the keys to the buyer. This is when you arrange with the Agent directly to collect the keys.
If it is a private sale, keys can be exchanged at settlement with the Solicitors, or between the Buyer and Seller directly.
At Enterprise Legal we aim to make the process of buying or selling your property as streamlined and stress free for you as we can. Most importantly, this is an exciting time for you and we want you to feel that way!
If you are in the process of purchasing a residential property, EL offers a competetive fixed-fee rate of $1,100 + disbursements, and if you are selling your residential property, our fixed fee is $660 + disbursements.
Get started today; contact EL’s Property Conveyancing team for a hassle-free property transaction:
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Often to get the best deal (or even to get the deal done at all) on a new property purchase, you will need to refinance your existing loans to a new bank. Seems simple yes? Well, when you refinance at the same time as purchasing a property, it adds a whole extra layer to your transaction and as such, there are some important things you need to keep in mind during the process.
As we (your lawyers) are acting for you in relation to your purchase transaction and not the refinance transaction, this means we have limited ability to drive the matter, as your old financier will not discuss the matter with us as we are not a party to the transaction. It is important that you and your Broker (if you have engaged one) ‘drives’ this matter by completing the relevant forms needed as soon as required and checking in to ensure both banks will be ready by the Settlement Date under you property contract.
Most of the time, you will be refinancing when purchasing a property which means that it will happen simultaneously (eg. at the same time) with the settlement of your property purchase on Settlement day. This means if your refinance is not ready due to either your old or new financier not being ready, then your purchase transaction will not be able to proceed, placing you in breach of your contract.
It is important to tell us from the start whether you are refinancing or not. As we don’t have the privilege to see how the refinance transaction is tracking, it is also important to keep us updated on how it is progressing. This also means letting us know what the outgoing (old) bank’s ‘payout figure’ is (eg. how much money you have to give them to leave), so we can ensure that your new loan covers not only the refinance with your outgoing bank but also your purchase transaction as well.
Between ourselves, you and your Broker, it is a collaborative effort to ensure your refinancing transaction and property transaction runs smoothly with no hiccups.
Ensure a smooth transaction and getEnterprise Legal's expert conveyancing team in your corner when you buy your next property by getting in touch with us today:
When selling your property there are several people involved in the process but three of those key players are your conveyancer, yourself, and your mortgagee / bank if applicable.
We all have a different role, but we all are working towards and want the same outcome. There is a common misconception that your Conveyancer will take the reins and do everything to complete Settlement on your behalf. Whilst it is our job to guide and assist you, there are certain limitations of what we can do on your behalf.
You have secured a contract of sale for your property and engaged a conveyancer, happy days.
Who else needs to know? Your Mortgagee / Bank / Lender.
Who needs to tell them? You.
A Mortgage is a financial agreement (Loan) between yourself and your Lender. If your property has a Loan associated with it, you cannot sell it unless the Loan has been paid out and the Mortgage is released at settlement. This involves you completing the necessary paperwork with your Lender to request for the Loan to be released. Part of that process includes you listing us as the Conveyancer acting on your behalf for the transaction, and thus authorising us to speak to you Lender about it.
Your Lender will not get in touch with us or speak to us about your matter until they have received the completed Release of Mortgage request from you, and you have nominated us as your Conveyancer.
The lead time for your Lender to be ready to release the Loan is hard to predict as there are many contributing factors. An example being that your Lender may be waiting on valuations to be conducted of other securities you own which could add substantial delays to the normal processing time required to Release the Mortgage. Therefore, we encourage our clients to attend to the process of arranging the Release of Mortgage as soon as possible. Whilst we cannot complete this request for you, we make sure we advise you of this requirement in our First Letter Pack we send out soon after receiving the signed contract. We are also always ready to answer any questions you may have, regarding the Release of Mortgage
You have finally paid off your loan and your debt with the bank is over – Congratulations!
Why are we still asking you to arrange for the Mortgage to be Released? Because the Release of Mortgage has not actually been registered with Land Titles and the Mortgage is still on the Title.
When you purchase a property and borrow money to do so, your Lender will register a Mortgage over the Title after Settlement to confirm the Loan agreement.
Once you have paid off the loan amount, the Loan can be released from the Title, but to do so a Release of Mortgage needs to be obtained from your Lender and registered at Land Titles. Your Mortgagee may arrange to do this for you, or you may be provided with the Release of Mortgage for you to arrange for it to be registered.It may be that when it comes time to sell the property, you have not yet arranged for the Release of Mortgage to be registered.
If this is the case, the Release of Mortgage needs to be registered at the Land Titles before Settlement. Alternatively, you can provide the physical Release of Mortgage to us, and we can provide at settlement to the Buyer’s Solicitor.
There is a lot involved when you are selling your property but at Enterprise Legal, our main aim is to try and make the process as stress-free as possible.
We have experience in what is involved in the process of selling your property, and what can go wrong so we know what to avoid.
Our goal in advising our clients of the importance of this process is to avoid any last-minute delays that may attribute stress, costs or ultimately, being in breach of your sale contract due to your releasing Mortgagee not being ready on Settlement Date.
If you have any questions regarding your upcoming sale or any of the information in this article, please get in contact with EL's conveyancing team:
Building your dream home can be one of the most exciting times in your life but securing the perfect location can be difficult in some circumstances, especially in the current market.
One of the ways to secure your dream block that is becoming increasingly popular is purchasing property ‘off the plan’. This simply means that the 'Lot’ (or block) you are purchasing has not yet been ‘created’ by the developer at the time of signing your land Purchase Contract. While purchasing off the plan can seem like a great way to secure your dream block, it is important to understand some potential issues you may face with this strategy.
A Sunset Date is a date inserted in your Purchase Contract to say that the Seller must ensure the Lot has been created with the Titles Office by this date. By law, a Seller can take up to 18 months to do this. It is important to look at this date before you sign your Contract to make sure it fits in with your plans for the property, especially if you are planning on building straight away.
There are two approaches that a Seller may have in relation to a Sunset Date. Under the first approach, they may have a shorter timeframe, knowing that the subdivision is only a few months away from being completed and having a shorter timeframe is obviously more attractive to potential buyers. However, whilst you may think that the land will be subdivided by the date specified in the Contract, some key steps (i.e Ergon connection, council sealing) may take longer than expected and push dates out, meaning the Seller will need to ask for an extension of the Sunset Date to accommodate these delays. In these circumstances, you can agree or otherwise terminate the Contract, missing out on your ‘dream block’.
Alternatively, a Seller may include the full 18 months in the Contract as the Sunset Date even though they are expecting the works to be completed in 6 months (for example). The reason why sellers do this is to leave extra time ‘up their sleeve’ legally under the Contract, should progress be pushed back.
As a Buyer, it is extremely important that you understand that even though you may have been told by the Seller or real estate agent that the subdivision will be completed by a certain date, you will not really have the ability to rely on these representations, if they don’t match the timeframes and dates specified in the Contract. The takeaway here is to prepare for the ‘worst case scenario’ timeframe (eg. 18 months) and don’t get sucked in if the Seller or the agent make you promises to the contrary!
As a Buyer, arguably the exciting part of this process is the actual building of your new home. Unfortunately, a lot of people rush into signing a build contract without fully understanding what some ramifications may be should there be a delay in the purchase of your block of land settling (refer to our comments above).
With the current state of the market and the construction industry, price increases are common. This is due to a range of factors, including an increase in the price of materials, supply chain issues and shortage of labour. If you sign your Build Contract around the same time as your land Purchase Contract, there is real potential for these costs to increase significantly over a potential 18 month period.
Even if you have a ‘fixed price’ Build Contract in place, it is important to check that there are still not any clauses in the Contract that allow for a price increase in certain circumstances. During these times, builders are relying heavily on these clauses to increase the contract price. Most standard contracts allow for the builder to increase a fixed price if there are material increases that ‘were outside of the builder’s control’.
Secondly, delays with your land Purchase Contract settling may cause issues with your Build Contract, depending on the anticipated start date included in your Build Contract. Should the builder not be at fault for the delay under you Build Contract (for example, if settlement of the land has been pushed back), you may need to pay the builder delay damages for each day that they are unable to commence the build. This is why it is so important to consider the Sunset Date in your land Purchase Contract and how this will affect your anticipated start date under your Build Contract, despite what you may have been verbally told by the seller or agent.
Given the potential severity of the above issues, we highly recommend that any Buyer who plans to build obtains legal advice on both your land Purchase Contract and your Build Contract, to ensure that both contracts work together to protect you from incurring unintended costs. . Unfortunately, at Enterprise Legal, we have seen dozens of times where this has occurred during the last two years, where clients should have had their Contracts reviewed.
If you would like to know more or for assistance with obtaining legal advice when purchasing vacant land ‘off the plan’ to build your dream home, please get in touch with EL's expert Property and Construction team:
Subdividing property has the potential to increase the value of the land and ultimately increase your return on investment. Whilst the allure of potential profit can cause you to ‘rush in’, it is vital that you understand the requirements, processes and associated costs prior to embarking on the subdivision bandwagon!
The process of subdivision involves splitting your existing property/land (or ‘lot’ as it is known technically) into two or more new lots. Subdividing can also be undertaken by adjusting the boundaries between two or more lots, to make some lots smaller or larger. Most subdividing activities require a development approval from your local Council.
The first step in investigating a potential subdivision process is to obtain advice from a professional town planner. A town planner will be able to inform you of any potential restrictions or limitations with your proposed project. It is important to know about these matters early on in the process, so that you can determine if your project will be commercially viable prior to investing a lot of time and money into it!. . Your town planner can then assist you with any application to your local Council to gain approval. It is important to note that there will be applicable fees for this application and any approval will be subject to certain conditions being met. These conditions must be complied with and again payment of any fees associated with this will need to be made.
You will also need to engage a certified surveyor to prepare a Survey Plan (eg. a technical plan showing the measurements and other features of the new lots) in the appropriate format. There may also be other plans that will be required to be prepared as part of the conditions imposed by Council.
Once Council has ‘endorsed’ (a fancy word for signing off) all the documents, they can now be lodged with the Titles Office and once the documents have registered, the lot is created – magic! The new lot(s) that has been created can now be sold to a potential buyer.
Yes – marketing and selling a lot or lots prior to them ‘existing’ is called ‘selling off the plan’. There are specific disclosures that must be given and certain special conditions that must be included in any ‘off the plan’ contract, so it is important that you engage real estate agents and lawyers (like Enterprise Legal) who are experienced with these specific types of contracts.
Ultimately, it is important to weigh up whether or not you are better off waiting for the proposed lot to be approved and created, to ensure the contract can go ahead and will not need to be terminated if the project does not ultimately proceed. Of course, this needs to be balanced with the potential benefit of ‘locking in’ a potential buyer in a hot market.
A large deciding factor in whether to go ahead with a subdivision project is of course the costs involved! Accordingly, when preparing a project budget, you should factor in the following costs at a minimum:
It is also imperative that you speak with your accountant to discuss any potential tax or other financial considerations in relation to the proposed project.
If you are interested in subdividing your property, contact the specialist Property and Business lawyers at Enterprise Legal to discuss how we can assist you further.
We can assist with all aspects, from providing you with initial advice on the project, through to managing the ultimate sale of the lots.
We work closely with your other professional advisors (and can even recommend trusted town planners etc.) to ensure that the project progresses as smoothly as possible.
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