Author Timsdsconvey

Both conveyancers and solicitors can help with property transactions, but they have different areas of expertise and approaches to the process. If you are entering into the property market and are confused about what to choose let us explain a bit about the differences between both.
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A conveyancer is a licensed specialist in property law who focuses solely on property transactions. They typically charge a lower fee than a solicitor, as their work is more streamlined and focused on the transactional aspects of the property transfer process. They have a deep understanding of the legal and administrative processes involved in buying or selling a property and can provide specific advice and guidance on these matters.
On the other hand, a solicitor is a legal professional who can provide advice on a wide range of legal issues, including property transactions. While solicitors may also have expertise in property law, they tend to have a broader scope of practice and may not be as specialized in property transactions as conveyancers are.
Overall, using a conveyancer can be a more cost-effective and efficient option when it comes to property transactions. They have a streamlined process and are experts in this specific area of law, making them well-equipped to handle the various administrative and legal requirements involved in property transfers. However, in some cases, a solicitor may be necessary, particularly if there are complex legal issues that need to be addressed or if there are other legal matters involved in the property transaction.
Never has there been more Government support for first home buyers in Melbourne and Victoria right now. That’s why it is critically important to understand all the Government first home buyer grants and schemes that are available.
These grants and schemes present a great opportunity to secure bonuses, start with lower than normal deposits and pay the lowest interest rates in decades. Also builders and land developers are offering bonuses on top of the government first home buyer incentives.
On the table are a range of packages. Each with different criteria. Let us detail a couple of things to help you understand how you can save on buying your first home in Victoria.
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VICTORIAN GOVERNMENT SUPPORT FOR FIRST HOME BUYERS
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First Home Owner Grant : $10,000 is available to eligible applicants buying or building a new home valued at up to $750,000 in metropolitan Melbourne. In regional Victoria, $20,000 is available.
Stamp Duty Concessions : First home buyers purchasing a new or established home valued below $600,000 will be exempt from stamp duty. For buyers of property over this price, concessional stamp duty applies.
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FEDERAL SUPPORT TO FIRST HOME BUYERS
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First Home Loan Deposit Scheme : Under this Scheme, eligible first home buyers can purchase a home of their own with a deposit as little as 5% (lenders criteria also apply).
First Home Super Saver Scheme : This scheme allows you to save money for your first home inside your super fund. If you can top up your super with up to an additional $15,000 you then use this money to be part of your deposit for your home.
HomeBuilder Grant : Eligible owner-occupiers (including first home buyers) can apply for a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020.
Call us today and we can work with you on how to accelerate your first home buying journey.
For more information talk to us at SDS Conveyancing Services, we have all the information you need to help you buy your first home.
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What is Subdividing?
Wherever you live in Australia or Melbourne subdivision is happening everywhere. As the population grows and keeps growing, land and property needs to be continuously parceled out and redeveloped to accommodate more housing and higher numbers of residents. Australia is currently in the vicinity of 25 million people. All of those people need somewhere to live, so the reality is that we need more suburbs and more housing. The outer suburbia of our cities are getting further and further away from the city centers so as the suburban crawl expands ever larger many property owners take it upon themselves to divide their land into smaller blocks and build townhouses, apartments and units on them to accommodate more people. That’s the process of subdivision, which is naturally very popular today among property owners, developers and investors. In this article, we will explain and answer some important questions about subdivisions.
Can any block be Subdivided?
Every situation is different in the world of subdividing. The answer unfortunately is not all residential blocks can be subdivided. Generally, there is a minimum size a new lot of land must be to create a new certificate of title. It only makes sense a block of land must be a certain size to be able to accommodate a unit or apartment that is sufficient space for living.
What is much more important to consider is the zoning of the property. Different zones have different regulations and requirements. Some of them permit subdivisions while others don’t or make it increasingly difficult. In any case speak to a trusted professional conveyancer to get your answer on whether or not your land can be subdivided.
Is Subdivision always making smaller lots from larger lots?
Subdividing generally means dividing into smaller parcels from larger parcels so you would be forgiven for thinking that subdivision means only to divide properties. In fact, subdivision also means combining smaller properties into a larger one. Subdivision also means moving boundaries as would occur in a boundary realignment. There are actually many facets including consolidation that can be done with land. For more detailed information read up on Land Victoria's website for details: https://www.propertyandlandtitles.vic.gov.au/land-titles/subdivision-and-consolidation
How Difficult is it to get Approval for a Plan of Subdivision?
As with everything in conveyancing and land development, you have to know what your doing and know the laws and regulations to get things past government departments such as the Land Titles Office Victoria. Subdividing a property requires careful consideration of the land and title associated with it, there needs to be compliance with the zoning and examination of any restrictions or covenants on the title. The only new parcels that can be created by a plan of subdivision are lots, roads, reserves or common property. The fact of the matter is that if you know the property laws and the local zoning requirements, it should be possible to make every step of the subdivision process painless. It’s yet another reason why so many people hire professionals who regularly deal with plans of subdivisions to make their property developments easy and straightforward.
How Much does a Plan of Subdivision Cost?
There is no fixed cost to submit and lodge a subdivision in Victoria. The total amount you will end up paying will all depend on the Plan, and how many lots you wish to create. Speak to us at SDS Conveyancing Services to get a full rundown of all costs if you decide to go ahead with a subdivison.
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What Happens to Property when the Owner passes away?
There are a lot things to consider when a partner or loved one passes away, but do you know what you need to do with any property they own? Property ownership can often be the last thing on your mind when dealing with the death of a loved one, but it is often one of the most important issues you need to get right.
Different Types of Property Ownership
When dealing with property and how the death of an owner affects it, you will first need to have an idea of the different types of property ownership that exist. There are three types of property ownership (source:https://www.propertyandlandtitles.vic.gov.au/land-titles/common-terms):
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Sole ownership. This is when a property or parcel of land is owned solely by one single person, they are the only name on the land title held by the land titles office.
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Tenants in common. Ownership of land by two or more people where each person is entitled to occupy the whole of the land in common with the others, but where none of them are entitled to the exclusive possession of the land. On the death of one of the proprietors, their share does not pass on to the survivors, but passes to the executor or administrator of the deceased. You can specify that shares be equal or unequal, between people owning a parcel of land as tenants in common.
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Joint tenants. Ownership of land in common by two or more persons where there is a right of survivorship. That is, upon the death of one joint owner, the land as a whole passes to the survivor(s). Your manner of holding will default to joint proprietorship if you do not specify your preference in the transfer of land document.
You may also have an ownership structure that includes both joint tenancy and tenants in common where a share of a property is held by two parties as joint tenants and the other share of the property is owned by another party as tenants in common with them.
When the ownership is Tenants in Common or sole ownership
As there is no right of survivorship under a tenancy in common ownership structure it is dealt with in the same way as a sole ownership when an owner dies. There need to be legal processes in order for the property ownership to change ownership after death.
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With a Last Will and Testament
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When dealing with a situation where a property is owned under sole ownership or tenants in common, having an up-to-date and accurate last will and testament is crucial for how a property is handled after death. Just having the will won’t be useful if no-one knows where to find it or the basics of what is in it.
In order for the directions in your will to be followed you will need to assign an executor. If there is no executor then an administrator will need to be nominated by the court.
The executor of the will, will be required to seek a probate from the supreme court of the state the will is held, which solidifies their status as executor before any transfer of title is completed. Probate needs to be completed before any change to the property title or the lodgement of the transfer of land can be completed, regardless of what is in the will. For more information on Probates see: https://www.supremecourt.vic.gov.au/wills-and-probate
Application for probate can take between three to six weeks to process through the supreme court. This could be longer if you don’t use a lawyer to assist with preparing the application to avoid potential mistakes.
What if there isn't a Last Will and Testament?
If it is discovered that the deceased has no Last Will and Testament then there needs to be some extra processes undertaken before transfer of ownership can occur. These processes are more complex and can take more time.
If there is no will a family member or spouse will need to apply for letters of administration, which is similar to probate but more complex, takes longer and usually involves a lawyer. There is an order for who can apply for letters of administration. The spouse has the first right to apply, followed by the children, then parents and finally siblings.
Obtaining letters of administration grants holders the authority to oversee an estate and the allocation of the assets when there is no will. The process for letters of administration, similar to probate, can take between three to six weeks to go through the supreme court. You will need to allow for additional time if you choose to apply yourself rather than with the help of a lawyer. This is to allow for any possible mistakes in the application.
See this link on applying for Letters of Administration. https://www.supremecourt.vic.gov.au/wills-and-probate/probate-forms/letters-of-administrationintestacy-form-kit
Next steps for Transfer of Property
After the completion of Probate or Letters of Administration, you will then need to finalise the process in order to transfer the property title to the new owner’s name.
The documents you will need to have ready to submit in order to transfer the property title are:
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A complete photocopy of the probate/letters of administration
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A copy of the certificate of title, obtained through a land titles search
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A title search (this isn’t always necessary but is recommended)
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Verification of your identity
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A completed transfer of title application
Each state has different application documents and names of the relevant documents needed but they are all essentially the same. You will also be required to pay any relevant fees to your local state government land titles office.
When ownership is in Joint Tenants
The process of transferring property ownership after death is slightly simpler when the ownership is set as joint tenants. When a property is owned by more than one person as joint tenants, the right of survivorship applies.
The right of survivorship is when a property is owned as joint tenancy and one of these tenants passes away. It allows for the transfer of the deceased share of ownership to the surviving owner or owners.
Despite the right of survivorship applying there is still a process that needs to be adhered to in order to make all transfer of titles official. You will need a few documents in order to get the process and transfer completed:
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A copy of the death certificate
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Verification of Identity
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Copy of the certificate of title
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A title search (not mandatory but recommended by most state land offices)
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The relevant application form or notice of death form as required by your state
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You will also be required to pay the relevant fees with the land title office.
For more information on the relevant forms and fees see: https://www.propertyandlandtitles.vic.gov.au/forms-guides-and-fees/overview
Or contact your local conveyancer who can help you obtain and lodge these documents.
What is Stamp Duty and How is it Calculated in Victoria?
Stamp duty is simply a form of Government tax. It is required to be paid for a number of transactions, including property and motor vehicle registrations. The amount of Stamp Duty required depends on the value of the property, generally speaking the higher the consideration or purchase price the higher the stamp duty will be, however there are different ways to reduce the stamp duty through the use of concessions which we will go into later.
When buying a property in Victoria, the purchaser pays the stamp duty on the property, this tax is collected by the State Revenue Office.
How is Stamp Duty Calculated in Victoria?
The amount of stamp duty payable is calculated on a sliding scale, starting at 1.4% for properties whose dutiable value is $25,000 and going up to 5.5% for properties with a dutiable value of $960,000 and above.
The dutiable value of the home is the greater of either the purchase price (including any non-monetary obligations), or the home’s value on the open market.
When the transaction involves related parties (Vendor and Purchaser are family or related somehow, or associated) the stamp duty is calculated using the property valuation, or appraisal. In Victoria this must be provided and generated by a licensed Real Estate Agent and there are no exceptions.
Dutiable value rangeDuty payable
Up to $25,000
1.4% of the dutiable value of the property
$25,001 to $130,000
$350 plus 2.4% of the dutiable value in excess of $25,000
$130,001 to $960,000
$2,870 plus 6% of the dutiable value in excess of $130,000
$960,001 and above
5.5% of the dutiable value
*Note: These figures are correct at the time of publication but are subject to change. Source: State Revenue Office of Victoria
Stamp Duty Rates can vary depending on:
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If you’re a foreign purchaser or an Australian resident
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If you’re a first home buyer, or not
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Whether it’s going to be your primary residence or an investment property
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Whether you’re buying land or a building
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Whether you’re buying the property, or taking possession of it in another way
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Any other exemptions and concessions you’re entitled to, such as for pensioners
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Whether the property is a farm and has machinery or cattle
If you need an idea of how much stamp duty you will be paying you can use the State Revenue Office online calculator, although in some cases it is not entirely accurate so it is always best to consult an experienced conveyancer for the exact figure.
https://www.e-business.sro.vic.gov.au/calculators/land-transfer-duty
Stamp Duty Concessions and Reductions in Victoria
Stamp Duty Exemption for First Home Buyers
As of 1 July 2017, first home buyers in Victoria may be exempt from stamp duty on eligible purchases.
You, and your spouse or partner if applicable, must both qualify as first home buyers and be Australian citizens or permanent residents. New Zealanders on a special category visa are also eligible.
Eligible Purchases:
The full exemption only applies to homes with a dutiable value up to $600,000. For homes valued at $600,000 to $750,000, you can still get partial exemption.
You also must be buying your principal place of residence. This means you need to live in it for at least 12 continuous months, starting within 12 months of taking possession.
If you’re eligible for stamp duty exemption, there may also be other, additional concessions or benefits available.
One example is the first home owner’s grant, or the off-the-plan concession explained below.
Other Stamp Duty Concessions and Exemptions in Victoria
You can also apply for concessions under the following conditions:
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Land transfers from deceased persons to their beneficiaries
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Transfers between spouses and partners, including transfers after breakups such as part of a divorce settlement
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Certain corporate consolidations or reconstructions
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Family Farms
Other concessions include:
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The principal place of residence (PPR) concession
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Off-the-plan purchase concessions
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Pensioner duty exemption or concession
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Charity and friendly society concessions
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Young farmer exemptions or concessions
Principle Place of Residency (PPR) Concessions:
The principal place of residence (PPR) concession is for properties with dutiable values up to $550,000, where the purchasers intend to use the property as their permanent residence. This means you need to be living there for a continuous period of at least 12 months after taking possession of the property. Note that if you are transferring from a related party and applying for PPR you will need to provide the State revenue Office with proof of payment between parties, this can include bank statements, copies of transactions, receipts or cheques.
Off the Plan Concessions:
You can apply for this concession if you are buying a property off the plan, meaning the property is not yet built or completed and you have only selected it based on viewing the building plans. As of 1 July 2017, this is only available for the purchase of a home that meets the requirements of the PPR concession, or gets a first-home buyer duty exemption/concession. Basically, it’s a different way of calculating the dutiable value, to facilitate the valuation of homes still under construction or renovation and make sure that off-the-plan buyers can also get the exemptions or concessions to which they’re entitled. It is calculated on the value of the property minus the construction costs and can significantly reduce the amount of stamp duty to be paid, as PPR is also applied to he end figure.
Pensioner Exemptions and Concessions:
Pensioners buying a home valued at up to $750,000, to use as their principal place of residence (PPR), may be eligible for duty concessions or exemptions.
There are some conditions and they must hold their own pension card, cards with joint names are not entitled to the concession, only the primary card holder.
Types of cards that are eligible:
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Department of Human Services (DHS) Health Care Card
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Department of Veterans’ Affairs (DVA) Health Care Gold Card
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DHS Pensioner Concession Card/DVA Pensioner Concession Card
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DHS Commonwealth Seniors Health Card/DVA Commonwealth Seniors Health Card
Additional conditions to be eligible:
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Hold an eligible concession card at the property settlement date (must not be expired)
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Have never received this concession before
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Buy the property at market value
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Intend to live in the home as your PPR
Charities and Friendly Societies Exemptions:
A charity or charitable organisation may be exempt from paying stamp duty on land purchases.
Eligible organisations include those:
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Whose operations are predominantly charitable
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Without any possibility of private profit during operation or at wind-up
The organisation’s constitution, or memorandum of association must clearly include clauses which state that the organisation satisfies these requirements. These types of transactions are complicated and require a lot of documentation.
Young Farmer Concessions:
A one-off duty exemption or concession is available to young farmers who are buying their first farmland property valued at less than $750,000. The following conditions apply:
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Young farmers are those under the age of 35
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Farmland valued at less than $600,000 receives a duty exemption on the first $300,000
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Farmland valued from $600,000 to $750,000 receives a duty concession
This concession cannot be used in conjunction with the PPR concession. If eligible for both, you can choose which of the two to use. You’re still eligible for this concession even if you or your partner currently owns, or has previously owned, non-farmland in the past. You are not eligible if either of you has been a shareholder or beneficiary of a trust that owns or has previously owned farmland.
How do I claim a stamp duty concession or exemption in Victoria?
Generally the stamp duty concession is handled by your friendly conveyancer at the time of processing your settlement. The conveyancer will explain to you that you are eligible for a concession and they will calculate the total amount of stamp duty if any for you. If you are already in possession of the property and wish to apply for a concession retroactively, you can go directly to the SRO or have a conveyancer lodge a claim on your behalf.
What Is Probate?
When someone close to you passes away, there are a few important things that need to be done in order to allow the deceased's wishes to be carried out correctly.
Even if the person who passed away had a Will set up, things may not be as simple as just following the instructions on the Will. If they had any significant property that they were the sole owner of, a process called probate is required to be followed.
It's basically a legally binding court order that says the Will is valid and needs to be executed. The probate (also known as grant of probate) process can vary by state, in this article we will discuss how it is dealt with within Victoria.
Is Probate Necessary?
You may be wondering if probate is necessary for you in your current situation, as it is not always crystal clear.
Usually, if assets were owned only by the deceased person (not a jointly owned asset such as a joint bank account or house), the financial institution may require a grant of probate before they release the assets to be distributed according to the Will.
If the assets were jointly owned or had another person's name as an owner as well, probate is usually not required, and the assets can be transferred to the 2nd owner through an application by surviving proprietor.
Who Applies for Probate?
The executor of the will is the person who will need to apply for a grant of probate from the Supreme Court. Is it typically best practice to have a lawyer assist with the application of probate as the application can be a bit complicated. There are many documents that need to be meticulously completed and requirements met by the court to allow a probate through. In some cases unforeseen problems can come up such as debts owing, caveats and other matters that will need to be considered.
How To Apply for Probate?
The state of Victoria requires you to advertise your intention to apply for probate at least 14 days before your filing is made, therefore you must first advertise then after 14 days you may submit your application. You will also need to complete the required documents related to your filing and bring them to the probate office to file. There is a fee for filing Probate, you need to check the amount before hand as they change every year. Forms are not accepted with electronic submission. You will need to submit physically all your documents to the Supreme Court registrar and swear before a Justice of the Peace that you have searched the registrars database for any previous or existing applications in the name of the deceased.
For more detailed information visit the: Supreme Court Victoria Wills & Probate website .
Buying a property off the plan is a situation where a purchaser buys a property that is yet to be constructed. Off the plan purchasing is a trend that has seen many aspiring property owners and investors secure their dream homes by putting their money on nothing more than an architectural plan. It can be something daunting especially if you have never done it before. It is a route to home ownership that some consider risky, but one which has proved very rewarding for others, especially if the project is located in a trendy growth area. It is one of the easiest ways of getting onto the property ladder because you only need to deposit a small percentage of the purchase price then pay the balance later. Buying off the plan can also significantly reduce the amount of Stamp Duty you need to pay because you only have to pay the amount based on the value minus the construction costs. Before committing yourself to buying a property off the plan, here are the pros and cons you need to know.
The Pros of Buying a Property Off the Plan
1. You Get First Choice
Buying off the plan gives you the chance to pick your apartment first before others get in. You also get to choose what you want changed or improved as long as it is within the set price. Since most people wait for fully constructed houses to buy, buying yours off the plan allows you to choose the best location and the one you believe is ideal for you. Buying Off the Plan in many cases comes with a list of optional extras, much like buying a car which is then added to your property as it is constructed. You can also choose how much you are willing to pay for these options.
2. Timing and Value Growth
Since the settlement can be a few years away sometimes as far as three years, it is good for you since should the market value grow, you will make a good equity growth. Buying Off the Plan in a trendy area can see the value increase in the time it takes to complete the construction.
3. You Lock in a Purchase Price
Buying off the plan allows you to lock in the price and saves you from any future market trends that may see the rest of the houses in the area increase in price. Even if your home’s value goes up, you will not need be paying any extra. You can then invest in another property and continue growing your property portfolio.
4. Your Property will be Brand New
The house you pay for off the plan has never had a previous owner or tenants. You will be the very first owner. Whether you choose to live in it or rent it out, it is new. And everyone likes new things! All the appliances and fixtures will be flawless and in perfect condition, you won't need to renovate or fix anything that is in ill repair.
The Cons of Buying Property Off the Plan
1. Unpredictable Market Trends
You are never sure of how the market will turn out when buying property off the plan. It is like literally putting all your eggs in one real estate basket. If the market goes up, you made a good bargain. If the market remains flat or goes down, then you will have paid an inflated price for the house. Buying Off the Plan can be a risk, but as we have seen in the recent years the property bubble inflates and deflates organically and this just comes with the territory.
2. Inflated Prices
Home buyers and investors usually think they are locking down the price by buying off the plan and actually don’t consider the fact that the developers have taken market predictions into account before selling the house. This means that they are predicting how much the house will cost once complete. If the value of the house goes up, the situation is fair for you. If nothing happens in the market conditions, then you buy the house at an inflated price and there’s nothing you can do about it.
3. There is not a lot of Flexibility
Between paying for your off the plan house and the completion of the construction, there could be around 12 months to a couple of years or more. However, you do not have the luxury to look around or compare prices in this time. You have already locked down the price, but also got locked down since you have already paid. What you select for options in your contract is also what will eventually become your home or investment. If you feel you have made a bad choice early on or rushed into buying, it can be very difficult and costly to change the plans.
4. Little or No Opportunity for Improvement
Once you have committed to pay for an off the plan property, there’s really not much you can do to increase the scope of your influence on how the property turns out. You might have great ideas on things to renovate or improve its value or the rental yield, but there’s nothing much you can do. Once the property is complete you are stuck with what you ordered. If the property is too small or not to your liking your options are only to rent it out or sell straight away.
So is buying a Property off the plan a good idea?
You know your situation and real estate investment goals best. Having read the pros and cons of buying property off the plan, you are ready to make your decision. The following tips might help you make a good decision.
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Carefully research and check on all the parties involved including the builders, developers, management company, contractors etc. It is better to have a developer with a good track record of successfully completed projects that have been sold off plan.
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An investigation of similar neighbourhood properties would also be a great idea. You should carefully examine and gather information about comparable nearby homes, their prices or rental amounts etc. and whether there’s a possibility of rent increase in the future. This will aid in projecting the amount of return you expect to get if you sell or rent out the property in future. Real Estate agents will help you a lot in this since they have all this information at their disposal. Never rely on the developer for this information.
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It pays off to buy properties in prime locations with high growth trends. Location is a great factor in understanding the potential of a property. A site near appealing facilities like transport links, schools, hospitals and shops is more promising. It pays off to buy the cheapest property in a good location than an expensive property in the worst location. Additionally, visiting the site constantly with your agent helps a lot.
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Carefully study the contract and ensure you watch out for any restrictions on sales the developer might have imposed in case you have plans to flip the house. If possible, ask for advice from professionals e.g real estate agents or a lawyer.
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Understanding your target market whenever to buy property is a must especially if you are planning to let or sell it after completion. Discuss with local estate agents to understand where the demand is likely to come from. Details, dimensions and specifications should be suitable for the target market.
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Finally, know your financial position, your borrowing capacity and the lending policies of the bank or your financial provider. It is advisable if you have a good payment plan to avoid putting all your money in the investment.
Before we go ahead with explaining all about the process of conveyancing in Melbourne, let us first understand what conveyancing is.
Conveyancing refers to the sale of property or real estate from a vendor to a purchaser, it can also refer to the process whereby a mortgagor (Bank or Financial Institution) provides a mortgage to a mortgagee. The completion of the conveyancing process can take anywhere from 30 days to much longer depending on the type of sale eg. such as Off the Plan sales which can take over a year to go complete due to the nature of building.
HOW THE CONVEYANCING PROCESS WORKS
There are two sides to conveyancing, depending on whether you want to buy or sell a property. For buyers the conveyancer has the role of doing the following:
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They examine and revew the contract of sale and communicate the key terms to the client
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They watch over the timeline and keep up to date with deadlines
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They communicate with your bank to make sure your loan and funds meet the requirements for settlement
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The Conveyancer will calculate and inform you of the amount of Stamp Duty and Lodging fees you will need to complete the Transfer of Land
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They facilitate the settlement process whether it be online or in a face to face settlement room
For Vendors the conveyancer will do the following:
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Make sure that the vendors conform to the contract terms and conditions
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Keep track of deadlines and inform the client as to the progress
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Calculate the payment of any remaining owing mortgages on the property
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Prepare settlement statements
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Inform the relevant authorities such as water companies, council, State Revenue Office etc. of your sale
STEP 1 THE CONTRACT OF SALE
This involves the generation of the contract of sale, the legal document outlining the terms and conditions that both parties will agree to. This is one of the most important legal documents involved in the conveyancing process, which if not prepared properly can give rise to a dispute between the vendors and purchasers. Generally the contract of sale must contain specified documents, certificates, and disclosures detailing the property and any special conditions involved.
STEP 2 THE OFFER
The second step is making an offer to the property owner to purchase it. The vendor can accept the offer or they can enter into negotiations with the buyer over the price and conditions of the sale.
STEP 3 MAKING A DEPOSIT
Once negotiations are in place the purchaser can choose to pay an initial deposit to show that they are committed to the purchase of the property. This amount may vary and will be stated by the seller or conveyancer and is simply a step to show that the seller is serious about their offer as well. It is not a binding contract and neither is the property removed from the market.
STEP 4 EVALUATION OF ANY RISKS OR DAMAGE TO THE PROPERTY
It is the vendor's responsibility to check for damage to the property up until settlement or completion of the sale. The purchaser can be prudent by insuring the property from exchange of contracts if they are unsure whether the vendor has a current insurance policy.
STEP 5 EXCHANGE OF CONTRACT
In Victoria, the vendor and purchaser each sign one copy of the contract and then the real estate agent acts as the middleman who exchanges these copies between both parties. The exchange of contract signifies the process is underway and both parties are bound legally by the terms contained within it.
STEP 6 COOLING OFF PERIOD
After the exchange of the contract and a deposit is paid, the purchaser may have a cooling off period. If a cooling off period applies, the buyer can revoke the contract before the end of the cooling off period however at auctions, the cooling off period does not apply.
STEP 7 THE TRANSFER OF PROPERTY
In 2018 the conveyancing process in Victoria is done almost entirely online using the PEXA property exchange platform. The purchasers conveyancer will prepare a work space and invite all the relevant parties to join to begin the Econveyancing settlement process. If there is a special case and a paper transaction is required the purchaser’s conveyancer must prepare a transfer document and have the purchaser sign it. The purchaser’s conveyancer must then send the transfer document to the vendor’s conveyancer for the vendor to sign. This is often a requirement of the purchaser’s financier, so that it can register the transfer and its mortgage promptly. This means that the purchaser must arrange to provide their conveyancer with the stamp duty amount prior to settlement, or arrange for stamp duty to be paid at settlement. It is not possible to defer the payment of stamp duty on the transfer. Any other documents required must be signed and ready for settlement.
STEP 8 AGREEING ON THE SETTLEMENT DATE
The time for settlement can be set by agreement between the parties. If purchases have bought “off the plan”it can be quite lengthy, up to years in fact. The reason for this can be because the contract can only be completed after the building construction is complete and new titles are issued. These periods can be changed by agreement between the seller and the buyer.
STEP 9 OUTGOING MORTGAGEE
If the vendor has a mortgage over the property, the mortgagee must be contacted to provide a payout figure and attend at settlement to hand over a discharge of mortgage and, often, the certificate of title/title deed. In Victoria the process is done online through PEXA unless it is deemed a paper settlement under special circumstances.
STEP 10 ADJUSTMENTS
At settlement, adjustments like council rates, water rates, strata body corporate contributions, land tax, and rent will be calculated and the funds available figure (amount provided by the purchaser or their bank) will be used to pay the parties involved at settlement.
STEP 11 PRE- SETTLEMENT
The sale is said to settle or complete on the day the purchaser pays the balance of purchase money, to the vendor. On the day of settlement, it is important for the conveyancer to obtain a final search of the title to ensure that the property is clear from any interest or restrictions that may have been recorded between the date of exchange and settlement. This is a legal requirement under the conveyancing act, if settlement occurs and there turns out to be a caveat or warrant on the title this can stop the transfer of land being registered and legal proceedings will most likely be the result.
STEP 12 POST- SETTLEMENT
If it is an online settlement, money will be transferred through an EFT facility on PEXA and the vendor will receive the funds within minutes of settlement completing. If it is a paper transaction the purchaser or the purchaser’s mortgagee will pay Stamp Duty and then register the transfer documents with the Land Titles Office. Moneys are exchanged via cheques handed over at settlement in a physical location. The transfer documents consist of any of the following:
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discharge of mortgage
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withdrawal of any existing notice or caveats
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Transfer of title from the vendor to the purchaser
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mortgage from the purchaser to the new mortgagee. The Land Titles Offices advise the relevant authorities like the local council, water authority, and Valuer General’s office that the property has a new owner.
CONCLUSION
Whether you plan to buy or sell a house or business, a conveyancers role is to represent your interests throughout all the stages. When representing a buyer, a conveyancers work is to prepare and lodge all legal documents relevant to the transaction. A buyers conveyancer will also deal with the financial areas, including the placing of any deposit into a trust account, and undertake any adjustment calculations involving both taxes and rates.
When representing the person or entity selling a property, a conveyancer will review and complete all necessary legal documents and respond to any questions about the title, and deal with key matters the vendors have.
Conveyancing keeps you, a buyer or a seller, away from all complications of the buying and selling process. Hence, it’s always advised to contact a well respected and experienced conveyancer for your property related matters.
1. Obtaining Finance
The first and most important consideration is money! Without access to funding there’s no point in looking around for a house. When you’re applying for a mortgage or loan, banks want to know all about your income, your partner's income, assets, existing debts and liabilities to determine whether you’ll be able to repay the loan off. The higher and more stable your salary, the more likely you are to get the money. If getting a loan on your own seems like mission impossible, there may be ways to get a guarantor to get you over this hurdle.
2. Extra Costs and Fees
There are many other costs involved in buying a home, first home buyers will not be clued in on these extras and you'll need to know what your in for before jumping in. The first biggie is stamp duty, this is calculated by the State Revenue Office based on the consideration or purchase price of the house and can run up into the ten's of thousands, even hundreds of thousands! There are a few ways to reduce this tax such as applying for FHOG (First Home Owners Grant) or using the property as your PPR (Principle Place of Residence). There are other acceptable exemptions and concessions available that you can find out about by talking to a conveyancer or even contacting the SRO directly. You will also need to know about Land Title fees, PEXA (electronic conveyancing) fees and some other costs that will need to be accounted for in your finance. Extra fees and costs can freak people out easily and it is wise to get in the know before you move forward.
3. The Process of Buying a Property
Buying a property can be very overwhelming and confusing, there is a lot of information you need to know before you dive into it. Knowledge and experience is the key to smart property buying, so if you’re new to the world of property, it’s wise to get expert advice, especially for the legal side of it. It may be wise to contact a few agents or conveyancers to find out what is involved with regards to the legal process before you begin. SDS conveyancing can go through it all with you one on one and explain the contract legalities with you to make sure your doing the right things in regards to process and steps.
4. Knowing what your buying
Buying property is a big step but although it is complicated it is also an exciting experience. So it’s important that buyers don’t get too caught up in chasing your dream home when making a potential purchase. Sometimes you can be deceived when looking at property and agents can pull the wool over your eyes with regards to defects, problems with the structure or things like mould, plumbing problems, pests, etc. Keep your wits about you when doing an inspection, and if you’re your worried about something consider hiring a building inspector to go thru the property with a fine tooth comb before committing to a purchase. This way, you know what you’re getting yourself into before you put your offer on the table.
5. Are you in the Right Place Financially?
So after doing some research and finding a property, are you ready to put down a deposit and get your finance into readiness? Can you budget the repayments into your life and still maintain your current lifestyle without sacrificing too much? Sometimes people jump into property buying without carefully laying out their budget because they get swept up in the excitement of it all, obtaining your dream home is the ultimate goal for many people and it is very easy to set aside the financial worries in order to just go for the goal. Consider carefully your current financial situation including your current debts, salary, job security, future and think long about if your ready to go forward with this huge step.
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Land Titles Office Victoria Mandatory Electronic Lodgements as of October 1st 2018.
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As of October 1st 2018 there has been another big step towards 100% online lodgement of instruments in Victoria.
Registrar’s Requirements for Paper Conveyancing Transactions requires that from 1 October 2018, the following instruments, whether lodged by themselves or in combination with any other instruments in the following list, must be lodged electronically:
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Transfers;
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Mortgages;
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Discharges of mortgage;
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Caveats;
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Withdrawals of caveat;
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Applications by legal personal representatives; and,
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Applications by a surviving proprietor.
Paper instruments for the above dealings will no longer be accepted by Land Use Victoria as of the 1st October 2018. However, the following exceptions will continue to apply: where an existing paper instrument has been signed prior to 1 October 2018;
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if in a combination of instruments, a party is not represented by a conveyancer or lawyer;
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if a folio of the Register cannot be dealt with in an electronic lodgement network;
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if an instrument affects more than 20 titles;
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if a transfer is of a type which is not currently available electronically, such as:
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transfers creating an easement;
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transfers of an interest (eg. a lease);
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transfers of part of land in a folio;
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transfers of a tenant in comment’s share; and
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transfers that cannot be assessed for duty using the Victorian State Revenue Office’s Duties Online system (eg. where an exemption is to be applied for); or
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if a survivorship or transmission application is not available electronically, such as a survivorship application by an interest holder.
It is intended that all Victorian land instruments will be lodged electronically from 1 August 2019.
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