Real Estate

Advice on buying Real Estate Australia Property

You have found a property you wish to purchase in Australia what next?

Buying Property in Australia - Costs of Purchasing Property

Australia Property Buyer's Guide explains the legal fees, legal procedures, real estate purchase taxes and mortgage procedure.

The purchase of residential real estate by foreign nationals and corporations is subject to Foreign Investment Review Board (FIRB) approval.

Since government approval is obligatory in acquiring residential real estate in Australia, it is inadvisable to sign a contract before securing approval from the FIRB, unless the contract allows for a grace period for securing government approval, prior to completion.

Purchasing property involves the following steps:

1. The seller must secure a title search, plans, easements and covenants recorded in title from the Land and Property Information department. These documents must be attached to the Contract of Sale.

2. The seller should also secure a Zoning Certificate from the Municipal Council as well as Drainage Diagram from the Local Water Authority.

3. The solicitor for the buyer must then prepare a transfer form (given that there are no outstanding interests in the property) for execution of the sale.

4. The contract and transfer form must then be sent to the Office of State Revenue, where it is stamped and duties settled.

5. The transfer form and certificate of title are then sent to the Land and Property Information Department for registration.

Stamp duty on property transfers varies by State:

Stamp duty depends on the value of the property and follows a sliding scale. Stamp duty is paid by the buyer when the contract is sent to Office of State Revenue. If the contract is not stamped within 3 months, an exchange penalty is due on the amount of stamp duty payable at the rate of 12.78% per year.

Land Transfer Registration Fee:

Paid to the Land Titles Office (in NSW and NT), this fee is for the transfer of ownership to the real estate buyer. It varies from state to state, with certain states imposing a fixed fee while others impose a variable fee based on the real estate purchase price. The Lawyer or conveyancer typically pays this on behalf.of the buyer. The registration fee is paid to the Department of Natural Resources in Queensland or Department of Land Administration in Western Australia.

In New South Wales, registration fee is AU$75 regardless of size or value of property. In South Australia, registration fee for properties worth above AU$40,000 is AU$194 plus 0.6% of value above AU$50,000.

Property Conveyance Fee:

Lawyer's or Conveyancer's fees are paid for the documentation necessary for a property purchase. Property conveyance can be done by a Lawyer (lawyer), a conveyancer (a land broker, land agent or settlement agent), or even the buyer and the seller. In the Canberra, Queensland and Tasmania, Lawyers have a monopoly on conveyance, while in Victoria a conveyancer must work with a Lawyer. In other states, the parties are free to choose.

Lawyer's fee are generally negotiable and can be a fixed amount, an hourly rate (with or without ceiling), or a percentage of the property value (typically around 1% to 2%). GST is always paid, thus, it is worth asking if the fixed fee is already inclusive of the GST.

Some lenders provide property conveyance as a free service to borrowers. Separate conveyance fees are usually paid by both the buyer and the seller (in some states the buyer's costs are higher, as there's more work involved).

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These guidelines are meant for guidance only and describe a straightforward purchase scenario. However this information is not meant to replace proper legal advice, which we always insist you take.

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