If you’re thinking of buying “off the plan” (buying a property that is yet to be constructed or doesn’t yet have it’s own individual title), here are a few handy hints to know before you put pen to paper:
- Be aware of the risks – One of the risks of “off the plan” purchases is that they are partly speculative in that property prices, market conditions, lending criteria and your personal circumstances can all change between when you enter the Contract and the often protracted settlement period. You must be confident that you will be able to settle when settlement falls due. Penalties will apply if you are unable to settle on time.
- Know what you’re buying and get it in the Contract – Ensure that a clear copy of the architectural floor plan (with measurements) is actually stapled to the Contract rather than the tiny, unmeasured ones that that often find themselves into many Contracts. Maybe even use the “Floorplates” the Agent has used on the glossy marketing brochures if they’re pretty large, as well the architectural drawings (if possible) showing ceiling heights, room dimension and other details. Also, if you’ve negotiated some changes to the property, be sure to have them clearly noted in writing in the Contract and on the floorplan. If there are problems later on just prior to settlement when construction has been completed, the Contract is the overriding document evidencing what you initially committed yourself to buy. If what’s in the Contract is ambiguous, your right of recourse becomes very limited.
- What’s my registration period or sunset date? – This is the time frame noted in the Contract within which the Plan of Subdivision must be registered by. Both parties (you and the Vendor/Developer) are bound to the Contract for this period (often 36 months) from when the Contract is dated. If the plan of subdivision and certificate of occupancy has not occurred before this date, then the Contract may be ended by ether party. If this time frame is unacceptable to you, you should cross out (where possible) the period stated under “Registration Period” and insert a period more appropriate for you that would be the latest possible time that you would be prepared to let the property go if it took any longer than the date you specify. You cannot necessarily rely upon a Selling Agent’s estimation of the expected completion time. It is probably well-meant, but should be seen as a guide only. The Contract overrides any promises, claims or information provided by the Selling Agent.
- Be flexible and be patient – What is often forgotten when buying off the plan is the effort, risk and money a vendor/developer is expending in getting the project up and running and then completed. The vendor may be required to vary the property and the works as it (or a government authority) deems appropriate and both parties are largely committed to continue with the Contract in most situations. Changes may be required to the size, number and location of apartments as well as the apartment’s and development’s fittings, facilities, plans and specifications. This requires some flexibility from you as a buyer as well patience when construction delays and the even legal process getting the Plan of Subdivision registered exceeds your initial time expectations.
Buying off the plan can be exciting – you end up with a brand new property to enjoy as well reaping the rewards of possible stamp duty savings along the way (in certain circumstances). It is important to note that the above information is general in nature and may differ in your circumstances. The safest way to “go in with your eyes open” when buying off the plan property is to have your Contract professionally reviewed before your commit yourself to buy. They are often very large Contracts that contain complicated Special Conditions and are quite difficult to understand for most buyers. So, if you’ve found the property you want to buy and you’re ready to purchase, head on over to our home page, click on the Contract Review banner and you’re one step closer to making your property dream a reality.
(c) Conveyancing Excellence
Here is a helpful summary of the stamp duty changes which are anticipated to soon come into effect (Source : State Revenue Office, Victoria)
Victorian Budget announcements
The Victorian Budget 2017-18 includes a number of measures that impact legislation administered by the SRO.
These measures have to be approved by the Victorian Parliament before they can begin. You should only rely on the exact detail of them once the legislation is passed. This is likely to be in June 2017.
The SRO website will be updated with detailed information when it becomes available.
Victorian Budget 2017-18 announcements
Measure Expected start date Land transfer duty (commonly known as stamp duty) to be abolished for first-home buyers purchasing a property up to $600,000, and a duty concession for first-home purchasesvalued from $600,001 to $750,000 Applies to contracts entered into from 1 July 2017 $20,000 FHOG to be available for homes built in regional Victoriaup to $750,000 Applies to contracts entered into from 1 July 2017 to 30 June 2020 Australian Defence Force (ADF) personnel to receive a special exemption from the FHOG residence requirement Applies to eligible transactions that complete on (and from) the day after the Bill receives Royal Assent An exemption from insurance duty to apply to crops, livestock and agricultural machinery 1 July 2017 Off-the-plan concession to be retargeted to apply only to buyers eligible for the principal place of residence or first home buyer duty exemption/concession Applies to contracts entered into from 1 July 2017 Property transfers between spouses and de facto partners involving commercial and/or investment properties to no longer be exempt from land transfer duty (commonly known as stamp duty) Applies to contracts entered into from 1 July 2017
** Exemptions for the principal place of residence and for transfers following a relationship breakdown will remain in place
A vacant residential property tax to be applied to certain properties in Melbourne 1 January 2018
Source: State Revenue Office, Victoria
In recent times, we have successfully completed electronic conveyancing settlements for our clients through use of the PEXA e-Conveyancing Platform. What does this mean to you? Well, for one, it can reduce the need for buyers to deliver bank cheques to us for settlement, saving them time and hassle. Essentially, all Land Titles Office documents can be signed digitally. This can be very helpful for clients overseas or those who live remotely. Also, financial settlement of your property can occur electronically whereby we, as your conveyancer, transact on-line in real time with your Lender and the other party’s conveyancer (if they are a Subscriber). Settlement funds are transferred safely and securely involving your Lender, PEXA, the Land Titles Office and the Reserve Bank of Australia. Registration of your name onto the title can also occur immediately (rather than 2 weeks or so after settlement , as with standard “paper” settlements). Settlements conducted in this way can save time and money. Eventually, by July 2019 , it would seem that all Victorian Land Titles Office conveyancing transactions will be lodged electronically. The above photo provides a look “under the bonnet” at the PEXA workspace created for one of our clients whose matter was recently settled using e-conveyancing.
We live in an ever-changing world and this has never been truer than in our digital age. There has been more changes in the conveyancing industry in the last 3 years than I’ve seen over last 17 years combined! In this short timeframe, we’ve seen numerous changes to Governmental Transfer and Duties forms and concessions, the introduction of foreign buyer additional stamp duty and “Verification of Identity” checks, changing requirements for properties over $2 million, as well as the big one – the advent of “e-conveyancing”. Change brings with it fresh ideas, new concepts and new challenges. The challenge for me is not just to embrace change, but to be a part of creating it. No matter what changes may present in the future conveyancing landscape, rest assured, Conveyancing Excellence will be at the forefront and capably manage your purchase and sale with skill, care and diligence. Despite things ‘going digital”, the property you buy or sell is unique and given that it’s probably you’re most valuable financial asset, the need for the qualities and service of an experienced and “human” conveyancer to help you avoid the pitfalls and reap the rewards of a smooth property transaction have never been greater.
Please let us know if you would like your next settlement to be conducted using “e-conveyancing”.
At Conveyancing Excellence, we strive to protect the interests of our clients. One small one we do this is by recommending that our purchasers obtain title insurance over their properties. Here’s a good example as to how title insurance came in very handy for clients of ours, Nick and Lyn, last year when they bought their home…”We are very happy that Matt from Conveyancing Excellence recommended that we take out First Title Insurance prior to settlement of our property in April, 2015. Consequently, we were required to lodge a claim due to excessive leakage and drainage problems discovered shortly after we moved in.
The council came and inspected our concern and later issued a Building Order because the veranda was constructed without a Building Permit and was deemed an illegal construction. We claimed on our First Title Insurance Policy. Our claim was accepted without any problems and so the process began with assistance from a Building Surveyor, Architect, Council and us obtaining quotes from builders. Our selected builder’s quote was approved by First Title. We were happy with our builder and the work conducted. The costs totalled over $20,000 and we now have a Certificate of Final Inspection and a new and compliant veranda (amazing value for a policy costing less than $500). Keeping First Title informed of the progress was important. Excellent service from all parties.” Nick and Lyn T.
So, next time you purchase a property, maybe perhaps you should ask yourself “Can I afford not to obtain title insurance?”. Matt Duker
After many seasons of watching Channel Nine’s The Block, I was delighted to recently be invited to inspect the apartments at 164 Ingles Street in Port Melbourne.
As filming is still taking place and all the rooms have not been publicly revealed as yet, I am duty bound to keep the details of the apartments respectfully confidential. What I can say is that I was genuinely impressed by what I saw and the apartments certainly seem more generously sized in real life than on the TV screen. The deco features of the building have been celebrated and, for me, the crowning glory of the apartments is the top level common area. All I can say is “Wow!”.
It was terrific to talk to Sasha from The Block and chat about the challenge of being on camera, the mammoth effort it has been to produce what is a stunning apartment and, of course, “the wall”! Overall, all contestants should be proud of what they have toiled hard to deliver. I shall continue to watch – with keen interest – the remaining episodes of The Block and look forward to assisting any of my clients should they wish to purchase one of these boutique apartments.
Thanks to Daniel and Lisa for their generous gift following the successful settlement of their Hillside property. Thank you!
With property prices still increasing across most Melbourne suburbs and the steady number of foreign purchasers entering the property market, new legislation has been passed that will impact a number of future property transactions. Here is a succinct summary of the changes from Cheltenham accounting firm, Vawdrey Axton Turner:
“Buyers to withhold tax for ATO when buying certain propertiesParliament recently passed legislation amending the taxation law to impose withholding obligations on the purchasers of certain Australian assets – generally property purchased from a non-resident. However, the changes will affect most purchases of property in Australia!The amendments impose a 10% withholding obligation on purchasers of ‘Taxable Australian Real Property’ (generally, this means an interest in Australian land) from certain foreign residents, as well as certain ‘indirect Australian real property interests’ (such as shares in companies that own a lot of land) and options to acquire such assets.
The amendments will generally apply where the contract to purchase an applicable asset is signed on or after 1 July 2016.
Where the land, or the interest in the land, is worth $2 million or more, the new law requires the purchaser to withhold 10% of the purchase price and send it to the ATO unless the vendor has obtained a ‘clearance certificate’ from the ATO and provided it to the purchaser prior to settlement.
This obligation arises regardless of whether the vendor is a foreign resident or not.
On 1 August 2016, Harvey enters into a contract to purchase a residential property in an affluent Sydney suburb for $2.5 million, with settlement proposed to occur on 1 October 2016. He does not know whether the vendor is a foreign resident.
Despite many requests from Harvey’s lawyer, the vendor refuses to obtain a clearance certificate from the ATO to give to Harvey.
As Harvey is acquiring Australian land with a market value greater than $2 million and he has not received a clearance certificate from the vendor by the time settlement occurs, Harvey will be required to withhold and pay to the ATO $250,000, whether or not the vendor is an Australian resident.”
Here is a good summary by Vanessa Paech regarding rules and procedures governing boundary fences between neighbours in Victoria. It is wise to talk to your neighbour first before making changes to your fences. Remember – they are your neighbours and they know where you live!
“…neighbours will generally be required to contribute equally to construction costs for a “sufficient” dividing fence (determined by the existence or otherwise of an existing fence, the type of fence usual in the neighbourhood and the purpose for which neighbours are using their land). Owners wanting a more expensive fence will have to meet extra costs.
Owners will have to seek agreement from their neighbours before building a fence, even if they intend to shoulder the cost themselves.
Neighbours who don’t comply may face a court order for their share of the costs, and local councils are permitted to give out resident contact details to allow the serving of notices.
If neighbours cannot agree formally about a new or replacement fence, the new rules allow one party to give notice to the other neighbour settings out details of a proposed fence type, location and estimated cost breakdown.
If the neighbours then can’t reach agreement, either owner will be able seek an order from the Magistrates’ Court specifying what fence should be built and how the costs should be shared.
Arguments over fences might seem a throwback from a bygone era, unless you’ve had one – and they’re more common that you might think. According to Victorian Attorney-General Robert Clark over 6,000 residential fencing disputes were tabled in 2012/13 – the greatest number of calls of any dispute type.”
Following the 2015/2016 State Budget, the SRO’s changes for overseas buyer become effective 1 July 2015, as explained below:
“2015-16 State Budget
The Victorian Government 2015-16 State Budget has announced changes to land tax, land transfer duty (stamp duty) and motor vehicle duty.
A 3 per cent surcharge will apply to foreign purchasers when they buy or acquire residential property in Victoria, either directly or indirectly.
This surcharge, which is in addition to any stamp duty or landholder duty payable, is proposed for contracts entered into (or a relevant acquisition made) on or after 1 July 2015.
A 0.5 per cent land tax surcharge will apply to land owned by absentee owners.
This surcharge, which is in addition to any land tax payable, is proposed to commence from the 2016 land tax year.
This year’s State Budget also includes changes to motor vehicle duty.
Motor vehicle exemptions for mobile plant and special purpose vehicles (type P) will begin from 1 July this year. These vehicles are defined in the Road Safety (Vehicles) Regulations 2009.
Mobile plant are those considered to be any non-passenger self-propelled vehicle constructed for specific tasks which may use public roads for access and that are under 4.5 tonnes.
Plant-based special purpose vehicles are more than 4.5 tonnes and generally make little use of the road network, such as backhoes, excavators, bulldozers, headers, scrapers, tractors, off-road water sprayers.
Further details of all announcements are available on the State Budget website.”
SOURCE: State Revenue Office of Victoria website – www.sro.vic.gov.au
Hi Jo, Thanks for your professional and efficient help once again. We will contacting you again in the future regarding 1 or 2 property sales ... to clear the mortgage for this one!Peter V - Repeat purchaser