What you need to know when transferring a property in NSW

Are you thinking about transferring property ownership in New South Wales (NSW)? If so, you should know how important it is to understand your legal requirements.

This article from the Sydney conveyancer professionals at Platinum Conveyancing Services will guide you through key topics like stamp duty, the contract of sale, settlement, and other relevant regulations. This will help you avoid issues and ensure a successful property transfer.

Stamp duty

Stamp duty is a tax that is paid whenever you buy or transfer property. The amount you pay depends on the property’s value and type, such as whether it is residential or commercial. There are different rates for each kind of property, and sometimes exemptions apply.

1. Residential property: Stamp duty rates can change depending on the property’s price. You may get exemptions or discounts if you are a first-time homebuyer.
2. Commercial property: Rates for commercial property are usually based on the property’s value. There might be exemptions or concessions for certain situations, such as the value of the property, or whether it is vacant land.

You must pay stamp duty within three months of the contract date or 12 months for an off-the-plan contract. If you don’t pay the full amount on time, you might face penalties or other consequences.

Contract of sale

The contract of sale is a crucial document for property transfers. It includes important details about the property and the sale. Both the buyer and seller must agree on the contract terms before the sale can happen.

1. Legal property description: This part of the contract tells you the property’s exact location and boundaries.
2. Zoning Information: Zoning rules help you know what you can do with the property, like if you can build a house or start a business.
3. Special conditions: These conditions can include things like repairs the seller needs to do before the sale, or if the buyer can cancel the contract under certain situations.

The contract of sale must also show any problems with the property that the seller knows about. Buyers have a cooling-off period to change their minds and cancel the contract, which usually lasts five business days. Once the cooling-off period ends, the buyer and seller exchange contracts and the sale becomes final.

Settlement

Settlement is when the property ownership officially changes hands. Both the buyer and seller have tasks to complete before settlement can happen, including:

1. Pre-settlement inspection: The buyer checks the property one last time to make sure everything is in the agreed-upon condition.
2. Finalising settlement statement: The buyer and seller agree on the final costs that need to be paid during settlement.

A settlement agent, like a Sydney conveyancer, will help the buyer or seller complete the settlement process. Adjustments can be made during settlement to divide costs like council rates or water bills fairly between the buyer and seller. If the settlement is delayed, there may be extra costs or penalties for the party causing the delay.

Regulations and authorities

Various regulations and different authorities all have a role to play in property transfers. Here are a few you should know about:

NSW Land Registry Services: This department keeps records of property ownership. When you transfer property, you need to register the change with them. They charge fees for lodging and registration.

Foreign Investment Review Board (FIRB): FIRB regulates people from other countries who want to buy property in Australia. Foreign investors must also meet certain requirements to buy property in NSW.

First Homeowner Grant (FHOG) and First Home Buyers Assistance Scheme (FHBAS): These programs help first-time homebuyers with costs like stamp duty. To get help, you must meet eligibility criteria, like being an Australian citizen and living in the home for a certain amount of time. You can apply for these benefits through an approved lender or Revenue NSW.

The more you know about stamp duty, contracts of sale, settlement, and relevant regulations, the smoother your property transfer will go. Sydney conveyancing services are there to help navigate a property transfer process, so you don’t make any mistakes.