Real Estate

What should I tell my Conveyancer?

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A lot of people do not know when exactly they should start talking to a conveyancer. The simple answer is, the earlier, the better. As your conveyancer, the more we know about your buying or selling situation, the better we are able to act on your behalf.

As a purchaser or seller it is important to remember that the smallest amount of information, while it may seem unimportant to you, can have a severe impact on your transaction. As your conveyancer we don't want to come across any surprises so it is extremely important that you communicate to your conveyancer if you have, for example, severe financial restrictions, tight time limits, or any other specific concerns or requirements relating to your situation.

To assist you in your next sale or purchase, we have prepared a short summary listing some of the things you'll need to tell you conveyancer in your first meeting.

Selling

If you are selling, be sure to make your conveyancer aware of the following, if they apply to you:

  • If you are looking at changing/have changed your name since you bought the property (meaning the legal owner on the Certificate of Title will differ from your new name);
  • If you are separating/have recently separated (in these circumstances, instructions will be required from both parties);
  • If you are getting married/have recently married (meaning that your legal name has or will change);
  • If you are re-financing/recently re-financed (this may hold up settlement of your sale – important for us to know right at the start);
  • If you are not an Australian Citizen/Permanent Resident (this is extremely important given the new laws regarding foreign purchasers and sellers);
  • If you pay land tax;
  • If you pay local land services rates;
  • If you anticipate your property will sell for $2,000,000.00 or over;
  • If a party to the Contract has passed away; and
  • If you are also looking at purchasing at the same time (and require a simultaneous settlement).

Buying

If you are buying, be sure to make your conveyancer aware of the following, if they apply to you:

  • If you are looking at changing/have changed your name (we will need to ensure that the name on the Contract is correct);
  • If you are getting married/have recently married (again, we will need to ensure that the name on the Contract is correct);
  • If you have a guarantor to your loan (this is important for settlement/mortgage document purposes);
  • If you are re-financing during your purchase (again, very important for settlement purposes);
  • If you need a 5% deposit to be acceptable by the Vendor;
  • If you need another person on the Contract (such as a parent or sibling) for the purposes of loan approval;
  • If you are not an Australian Citizen/Permanent Resident (this is extremely important given the new laws regarding foreign purchasers and sellers);
  • If this is your first purchase; and
  • If you are relying on the sale of another property to be able to purchase.

Whilst the above is not a conclusive list of what your conveyancer needs to know in your first appointment, it is a start. Before you meet with your conveyancer it is a good idea to have a think about how your situation differs or is special from what you would consider a normal situation, and be prepared to discuss this with your conveyancer.

Ready to discuss your next buying or selling property transaction? Talk to the team at Coutts Solicitors & Conveyancers.

Do we need to pay our property grants back?

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If you have recently built a home with your partner, or bought a brand new home, and you have now separated, there is a chance that you will need to pay your property grants back.

Below we explain when you need to pay your property grants back, when you don’t need to, and what else you should know to protect yourself.

If you are selling the property

If you are selling the property for which you received property grants, then there is a high chance that you will need to pay back those grants. The rules for property grants are as follows:

  • New Home Grant

    • If you purchased a home complete and ready for occupation or an off the plan purchase you are not required to pay back the grant.

    • If you purchased vacant land with the intention to build a dwelling:

      • But did not commence construction within 26 weeks of settlement then you must repay the grant; or

      • If you completed construction then you will not be required to pay back the grant.

  • First Home New Home Stamp Duty Exemption/Concession

    • If you purchased vacant land with the intention of building a dwelling; or

    • If you bought a new home that had not been lived in previously, then:

      • At least one purchaser must have occupied the Property for a continuous period of 6 months in the first 12 months. If this has been achieved then the stamp duty exemption/concession does not need to be paid back.

      • If you have not commenced construction or neither purchaser has lived at the property for the required period then the exemption/concession must be paid back on or prior to settlement of the sale.

  • First Home New Home Grant

    • The guidelines above for the Stamp Duty Exemption/Concession are also applicable to the grant.

If one of you is keeping the property

If one of you is going to keep the property and buy the other out, there is a chance that you will not need to pay back the grant money that you have received.

In order to avoid paying back any stamp duty concession or grant received on your Property you must meet the eligibility and residence requirements, which are set out below:

  • New Home Grant

    • If you purchased a home complete and ready for occupation or an off the plan purchase you are not required to pay back the property grant.

    • If you purchased vacant land with the intention to build a dwelling:

      • But did not commence construction within 26 weeks of settlement then you must repay the grant or request an extension to meet the requirements of the grant which would avoid the need to pay back the grant; or

      • If you completed construction then you will not be required to pay back the grant.

  • First Home New Home Stamp Duty Exemption/Concession and Grant

    • Either purchaser must have lived at the Property for a continuous period of 6 months within the first 12 months after settlement or completion of the dwelling.

What should be done from a Family Law point of view?

If you have separated and have property together, you should be entering into a formal family law settlement. To read more about why, please click here.

In addition to providing you with protection and certainty in the future, a formal family law property settlement will also help the party who is going to keep the property avoid having to pay stamp duty on the transfer into their sole name.

A family law property settlement is also important if you have previously received property grants. Any settlement should cover who, out of the two of you, will be responsible for paying back the grants in the event that the conditions set out above are not complied with. If you are not keeping the house, and you are selling your share to your former partner, you may want any settlement to say that you will not be responsible for paying back the grants in the event that your former partner does not comply.

This will help both of you move forward into the next chapter of your lives with certainty.

If you would like more information about this, please contact our office to make an appointment.

Stamp duty exemptions for couples

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Stamp duty exemptions for couples may apply when a person in a marriage or de facto relationship owns a property and wants to put their partner on the title. 

There are also exemptions that apply when separation takes place and you want to transfer the title back into the sole name of one of the parties.

Stamp duty exemptions during the relationship

When you decide to add your spouse to the Certificate of Title you may be eligible for a stamp duty exemption. This will depend on your individual circumstances.

Firstly, in order to receive stamp duty exemptions in this circumstance the property must be residential land:

  • on which your principal place of residence is located;
  • that you intend to construct your principal place of residence;
  • on which you are constructing your principal place of residence; or
  • in which you have shares that allow you the right to occupy the property as your principal place of residence.

Once you have established that the property meets the ‘principal place of residence’ requirements then the following apply:

  • if you are married, then a full exemption will be received when adding your spouse to the Certificate of Title; and
  • if you are in a de facto relationship, then: - you must have been in the relationship for two years or more to receive a full exemption; or - if you have been in the relationship for less than two years then no exemption will apply.

If you would like to know more about adding your spouse to the Certificate of Title please contact one of our Licensed Conveyancers.

Stamp duty exemptions after the relationship

In the event that separation has taken place, one party may want to keep the house and ‘buy’ the other person out. When doing this, you will need to transfer the property into the sole name of the person who is retaining it. This transfer will incur a stamp duty liability on the value of the share that is being transferred to the person who is keeping the property (which is different to the amount that they are ‘paying out’ to the other person).

There are stamp duty exemptions available in this scenario, but only if there is a formal family law property settlement in place. Once the formal settlement is done, the transfer can be effected without stamp duty liabilities occurring.

To find out more about why doing a family law property settlement is important, click here.

Can I sell my home to a buyer with 5% deposit?

If you have your house on the market, you are selling at a time where  property prices and mortgages are high, buyers will need to offer a deposit to purchase, but the current market conditions mean it is uncommon that a buyer will have a 10% deposit. However, the Contract for Sale of Land stipulates that a 10% deposit must be paid on exchange of Contracts. So this leads many people to question " Can I sell my house to a buyer with a 5% deposit? " and if so, how is this done? and is there any risk? The simple answer is yes you can and yes it does come with a risk, but there are ways to minimise the risk.

You can accept any deposit you wish under the Contract for Sale as long as it is agreed to by all parties, but here is the catch…

  • If you agree to accept a 5% deposit and if you ever had to terminate the Contract on your buyer, then you would have to try and recover the balance of the 5% due to you under the Contract. This would be done through litigation (going to court), which is an expensive process with no guaranteed outcome.
  • If you do not feel comfortable agreeing to a 5% cash deposit, you can always ask your buyer to obtain a 10% deposit bond. A Deposit Bond acts as a substitute for the cash deposit between signing a Contract and settlement of a property. At settlement the purchaser would then pay the full purchase price including the deposit. A Deposit Bond can be issued for all or part of the deposit amount required, up to 10% of the purchase price.

Thus, it is safer to ask for a 5% cash deposit together with a 5% deposit bond, which would total your whole 10% deposit.

Ideally, it is up to you whether you agree to accept a 5% deposit, just remember that it does come at a risk. Even though you are lead to believe it is “common practice” you are entitled to the 10% deposit under the Contract for Sale, you do not need to accept the 5% even if there is a “special condition in the Contract” as if you do accept the lesser deposit,  that is most likely all you will get if the Contract is terminated.

If you are thinking of selling your property you will need a contract of sale before you market your property. This can be done by a licensed conveyancer. Contact Coutts Solicitors & Conveyancers.

First Home Owner Grant reduced

The First Home Owner Grant has been reduced to $10,000 as of 1 January 2016. The First Home Owner Grant (New Homes) scheme has been available for several years to assist eligible first home owners to purchase a new home or build their home by offering a grant.  The grant amount is determined by the date of the eligible transaction. This is the date of the contract to purchase a new home or contract to build a home.

  • For eligible transactions made on or after 1 January 2016, the grant amount is $10,000.
  • For eligible transactions made between 1 October 2012 and 31 December 2015, the grant amount is $15,000.

Here is a re-cap on the some of the terms and conditions associated with the grant:

  • New homes only – this means a home that has not previously been occupied, sold as a residence, renovated or built to replace demolished premises
  • Individuals only – not applicable to companies or trusts
  • If you OR your spouse OR your de facto has owned a property in Australia before, you are ineligible
  • At least one of the applicants must be a permanent resident or Australian Citizen
  • The total value of the property cannot exceed $750,000
  • At least one of the applicants must live in the home as their principal place of residence for a continuous period of six months commencing within twelve months of being the owner or if you are building, within 12 months of construction being completed

Other things to consider:

  • The grant is not available for the purchase of vacant land however where you have entered separate Land and Building Contracts:
    • Once you are making an application for a construction loan, you can apply for the grant through your financial institution and the grant is available to draw down from your first progress payment; or
    • You can apply for the grant directly from the Office of State Revenue once construction of your home has been completed provided the application is lodged within 12 months of completion of construction.

Please note: If you have not yet claimed the First Home Owner Grant but previously entered into a Contract for the purchase or construction of a new home and the date you entered that Contract is before 1 January 2016, you are still eligible for the $15,000.

This is a summary only. For more detailed information about First Home Buyer incentives please click through to this link http://www.osr.nsw.gov.au/first-home-buyers otherwise feel free to contact our office.

*This information is current as at February 2016

Swimming Pool Compliance 2016

Do you have a swimming pool or spa? Are you looking at selling your home?If you said yes to both of the above questions then the Swimming Pool Compliance 2016 requirements will effect you. As of 26 April 2016 all homeowners selling their properties need to provide one of the following: 1. a valid compliance certificate from Council or a qualified private certifier; or 2. a Final Occupation Certificate that is less than 3 years old. One of these documents must be attached to the Contract for Sale so make sure when you are instructing your conveyancer that you provide this information. If you are in a strata complex you are affected by this new legislation also, so make sure the Owners Corporation have a compliance certificate for any pools within your complex.

If you have any questions about the new legislation click here to contact the licensed conveyancers at Coutts.

Title Insurance

What is title insurance?

Title insurance is a specialised insurance that provides protection to home owners against unknown and hidden risks that may exist at the time of purchasing a property.

Why do you need title insurance?

Even the best conveyancer or property lawyer cannot identify all potential risks to your property during the conveyancing process.  Title insurance provides that extra level of protection against the unknown.

So, what risks can title insurance cover?

  • Illegal or unapproved building works
  • Survey or boundary defects
  • Registration gap
  • Fraud, forgery and identity theft
  • Planning and title defects
  • Outstanding rates and taxes
  • Zoning issues
  • Breach of relevant laws
  • Forced removal or remediation of structures due to thirds party work

Top points for title insurance

  • It is a one-off premium
  • There is no excess on claims
  • No fault claims – no fault or negligence needs to be proved
  • No cap on cover apart from policy amounts

What is the cost to you?

The premium varies depending on the value of the property and the type of property you are purchasing, enquire with your conveyancer or property lawyer to find out more.

If you would like to know more about title insurance please contact Coutts on 1300 268 887.

What are Deposit Bonds?

Deposit Bonds are becoming a common part of the conveyancing process, especially with ever increasing property prices.  So it is important for vendors and purchasers alike to understand what Deposit Bonds are.

What is a Deposit Bond?

A Deposit Bond is a substitute for all or part of the typical cash deposit paid on exchange of Contracts in the conveyancing process.  It almost like a form of insurance where the institution providing the deposit bond is saying the purchaser is good for the money.

Deposit Bonds can be for short terms of up to 6 months or long terms up to 48 months (this is beneficial if purchasing off the plan).

Where can you get a Deposit Bond from?

Deposit Bonds can be obtained through specific companies that only deal in deposit bonds, or through your banking institution.

What is required to obtain a Deposit Bond?

Documentation required to support your application varies between institutions, however as a general guide, you may need:

  • Copy of your loan approval;
  • Evidence of funds to complete the purchase;
  • Signed and dated Contract for Sale (if selling existing property)

What is the cost of a Deposit Bond?

The cost varies between institutions and will vary depending on the value of the deposit bond and how long you need it in place.

Benefits of a Deposit Bond

The benefits of a deposit bond vary between the individuals circumstances, however some top benefits include:

  • Provide a greater flexibility at auctions, as the deposit bond can provide you with a maximum deposit of 10% of your maximum bid. These types of deposit bonds are not made in favour of a specific vendor and can be issued for a 6 month term.
  • First home buyers may not always have a full 10% deposit, but can get funding for 95% of their purchase, so instead of committing to a cash deposit a deposit bond (possibility with the need for guarantor) can be obtained to ease the pressure.
  • When buying off the plan, instead of having your 5% or 10% deposit being invested in a low interest earning account for up to 48 months, you can leave your money where it is and obtain a deposit bond for the period of the Contract.

If you would like to know more please contact one of the Licensed Conveyancers at Coutts on 1300 268 887.

What is a Sunset Clause?

There has been a lot of reports in the media lately regarding sunset clauses and changing the way they operate.  To best understand the need for reform of these clauses, its important to first understand "What is a sunset clause?"

What is a sunset clause?

A sunset clause most commonly appears in a contract for off-the-plan sales, either for apartment blocks or unregistered vacant land.  This clause sets the date that a contract may be rescinded (wound back) or cancelled without penalty, by either party if conditions are not met.

Sunset clauses may allow a period of 12-36 months (if not longer) for the developer to have the property ready for settlement.  They also provide that this period can only be extended by a further 12 months past the original date.

What does a sunset clause achieve?

The intention of a sunset clause is to protect the purchaser from being tied to a development that never gets completed, and to protect the developer by ensuring that purchasers cannot pull out of settlement if the project is completed in accordance with the sunset clause.

What is the current situation?

There has been a great deal of media attention on sunset clauses due to the tactics of some developers to use the sunset clause to their advantage in a market where we are seeing great price increases.  Allegations have been made that some developers are delaying construction to push past the sunset date.  This allows the developer to pull out of the contract and then put the property back on the market for a higher price.  In the current market this can yield significantly higher returns.

This affects purchasers as their deposit has been tied up in a development that has essentially put them out of the market since the time they paid their deposit.  This could be for a period of 2 years or more, meaning many can now not afford what they originally signed up to purchase.  It also affects confidence of purchasers, particularly in relation to off-the-plan sales with those involved in the above situations stating they will not consider purchasing off-the-plan again.

What is being done to prevent this in the future?

Consumer protection is high on the agenda of Victor Dominello, the Minister for Innovation and Better Regulation.  In the past week he has announced two potential options to prevent or avoid these situations in the future.  The options are:

  1. To imply a term in all off-the-plan contracts that only allows the purchaser to rescind. This arrangement aligns with that in Western Australia. 
  2. To imply a term where if the vendor rescinds a contract under a sunset clause and then resells the property within a certain period of time, the purchaser is entitled to damages equal to the difference on sale price between the two contracts.

Such proposals will turn the Sunset Date clause on its head.  Purchasers previously affected by the underhanded tactics of developers have welcomed the reforms with the hope no one will have to endure their experience in the future.

Consultation with various stakeholders regarding off-the-plan contracts and the reforms have commenced and the wider community can take part by completing the survey at http://www.fairtrading.nsw.gov.au/ftw/About_us/Have_your_say/Buying_property_off_the_plan.page.

If you would like to know more about off-the-plan contracts or sunset clauses please contact the Conveyancing Team at Coutts Solicitors and Conveyancers on 1300 268 887.

First Home Buyer

Lately the prices of land and new homes in the local area have dramatically increased compared to 12 and even 6 months ago. Because of this there’s been a lot of confusion about First Home Buyer incentives and the thresholds that apply.  

There are currently two really great first home buyer incentives available. The first is a stamp duty exemption or discount and the second is a grant.

Stamp duty exemptions and discounts - Vacant Land

First Home Buyers of vacant land are eligible for a full exemption from stamp duty if the value of the land is not more than $350,000.

First Home Buyers of vacant land are eligible for discounts on stamp duty if the value of the land is between $350,000 and $450,000.

Stamp duty exemptions and discounts - Brand new homes

First Home Buyers of new homes are eligible for a full exemption from stamp duty if the value of the home is not more than $550,000.

First Home Buyers of new homes are eligible for discounts on stamp duty if the value of the home is between $550,000 and $650,000.

Unfortunately if the value of the land or new home is above these thresholds, full stamp duty is payable.

Grant

First Home Buyers are eligible for a $15,000 grant if the total value of the property is not more than $750,000. This grant reduces to $10,000 on 1 January 2016.

The above information only sets out the thresholds, it is also important to note that there is criteria you must meet in order to be eligible and so if you think this might apply to you and want some more information  contact our office by phone on 1300 268 887 or click here to register for a call back.

*This information is current as at January 2015

The New Home Grant Scheme

I have many clients who ask me about the New Home Grant Scheme with government incentives for non-first homebuyers. Non first home buyers are someone who owns property or has owned property before. It pays to buy vacant land, new homes or off the plan … it pays $5,000! That’s right, for the purchase of vacant land, brand new home or off the plan, the government will give you $5,000 toward the payment of stamp duty as part of the new home grant scheme.

Here’s the ‘catch’ (you knew this was coming):

  • The value of the new home can’t be more than $650,000
  • The value of the vacant land can’t be more than $450,000
  • Purchasers must be Australian citizens, Australian residents or an Australian-owned bodies
  • Each purchaser is limited to one grant per financial year
  • For vacant land, construction of the home must begin within 26 weeks of the completion of the purchase
  • The grant is not available for the purchase of an existing home to knock down and build and a new home on the land
  • Doesn’t apply for vacant land or brand new homes intended to be used for commercial or industrial use

Provided you comply with all of these requirements, you’re eligible! What are you eligible for? It’s called the New Home Grant Scheme and it’s a $5,000 contribution toward your stamp duty. Sounds good to me, I mean stamp duty never looked so good for non-first homebuyers, so what are you waiting for? If you would like to apply for this $5,000 amount our Conveyancing department can help you apply.

Has this sparked more questions? Contact us on 1300 268 887 or click here to register for a call back.

*This information is current as at January 2015.

The benefits of Community Title

There is a perceived view in society that community title is not worth the additional money spent in annual levies. But do you actually know what is included in the community levies and do you know how they benefit you as a home owner.

General benefits within the Community Title estate

General items you will receive the benefit of in a Community Title estate:

  • Shared ownership over common facilities
  • You will have the enjoyment of better services and facilities
  • You will have a greater level of input into management and maintenance over the services and facilities
  • Building and Landscaping Standards are enforced to ensure the appearance of the estate is maintained over time which adds value to your property
  • Insurance coverage for community lots and facilities

Benefits of specific facilities within the Community Title estate:

Depending on the estate you purchase your property in you may receive the benefit of using some or all of the below facilities:

  • Membership to a Country Club which may include a gym, swimming pool and tennis courts
  • Security patrols and/or back-to-base alarm monitoring
  • Maintenance over community land
  • Bike and walking trails
  • Community events and activities
  • Provision of surrounding land uses that enhance the image of the estate, such as vineyards; and
  • Provision of privately managed services such as sewerage systems, recycled water systems and stormwater.

Overall…

So when looking to buy property that may include community title,  don’t be scared off by the levies, get the right information and  make sure you get the right advice on the benefits of the community title, you may be surprised how those benefits can outweigh the annual levy.

Local community title estate include:

  • Bingara Gorge, Wilton 
  • Harrington Grove, Narellan 
  • The Lanes, Kirkham 
  • Theresa Green Estate, Theresa Park
  • Nangarin Estate, Picton

Purchasing unregistered land

So I asked my client, I said, “What did you discover having already bought unregistered land that you didn’t expect?” The response I received, which inspired me to write this blog was “they lie about registration”. This blogs not about how developers lie, but it is about what you as a purchaser of unregistered land need to consider even after you’re told the anticipated registration date. You need to be aware as a purchaser of unregistered land that while you are provided with an anticipated date for registration, this date is approximate only and subject to change. There are two things to consider, the process involved in registering land and the provisions in the Contract for Sale.The developer doesn’t have control over registration of the land because there are processes that need to be followed and third parties that are involved in these processes. Before land is ‘registered’ construction works need to be completed, council must approve the plan of subdivision and the plan of subdivision must be lodged to the Land and Property Information. In this process there are several parties involved, it is because of this that registering the plan of subdivision can take time. It is also because of this that exact time frames of when the land will register cannot be given.

Generally speaking in a Contract for Sale of unregistered land, there is a provision for what’s called a ‘sunset date’. This is the latest date that the developer has to have the land registered by. It’s your worst-case scenario. This date is important to consider because as a worst-case scenario you could be waiting until then. It’s only until this date is exceeded that you have any options. In most cases, if the sunset date is exceeded, you have the option to elect to no longer proceed with the purchase.

So it’s risky business purchasing unregistered land but that doesn’t mean you shouldn’t, now though, you are more prepared and can enter these sorts of transactions with a better understanding.

Official RBA cash rate remains at record low

In case you didn’t hear the good news, the Reserve Bank of Australia has decided to leave the cash rate on hold at a record low of 2.75 per cent. In a statement provided by RBA governor Glenn Stevens, the falling Australian dollar was cited as the main reason behind their decision.

The implications for home owners

If you’re a homeowner, you might breathe a sigh of relief that bank interest rates will also remain the same.  In fact, it’s been suggested that interest rates will decrease over the course of the short term – to help our economy adjust to falling levels of mining investment and to help make property purchasing a more affordable option.

JP Morgan economist Tom Kennedy cited that the high Australian dollar was crucial to the RBA's last cash rate cut in May. He went on to say he expects the RBA's next interest rate cut to be in November, followed by another in February 2014.  Either way, it will depend on the performance of the Australian dollar and the impact on consumer prices.

Check with your mortgage provider

We recommend that you touch base with your mortgage provider and check whether the interest rate on your mortgage has changed or remained the same.  It’s always good practice to keep on top of your interest levels - to ensure you’re getting the best deal possible from your lender and to help you keep abreast of your financial obligations.