Buying a New House?

Tips & Traps For Homebuyers

Buying a new home can be an exciting but also daunting experience. There is often a mountain of paperwork to complete and many deadlines to meet. Finding your dream property to live in or your ideal investment property is only the tip of the iceberg. It is best to engage an experienced and qualified Registered Conveyancer once you have found the right property.  They will ensure that you have a smooth settlement process and avoid any problems. Linda Scalzi at DW Fox Tucker Lawyers will be able to assist you and provide a positive experience for you at a competitive price.

Here are some important items to consider when buying a property.

Can You Afford The Property?

Make sure that you can afford the property by getting good advice from a financial planner and a finance broker.

What Other Fees And Charges Will I Have To Pay?

Not only is there the cost of the property to consider but also the various government charges involved. Stamp Duty on the Transfer is one of the more expensive items to consider and is calculated on the value of the property. For example, a property worth $500,000 would attract $21,330 in stamp duty. When buying a property, you need to allow for this expense in your calculations. To calculate the amount of stamp duty payable on a property, there is a stamp duty calculator located on the Revenue SA website – go to http://www.revenuesa.sa.gov.au/services-and-information/calculators/stamp-duty-on-conveyances2 for more information.

Along with stamp duty, there are also fees that you will need to pay to the Land Titles Office. The most expensive fee is the registration fee for the Transfer. On a property worth $500,000, this fee is $3,751.50. To calculate the registration fee on the Transfer, there is a calculator located on the Land Services Group website – go to http://www.landservices.sa.gov.au/1Online_Services/60Fee_Calculator/_Fee_Calculator/Default.aspx?sect=about for more information.

There are minimal first home buyer concessions and grants available at present. Refer to http://www.revenuesa.sa.gov.au/grants-and-concessions for more information.

What Name Shall I Purchase The Property In?

Another thing to consider is what name you want registered on the Title. If you plan to live in the home then you would normally buy it in your personal name. However, if it is for investment purposes you may wish to have a company or a Trust make the acquisition. It is best to seek tax advice from your lawyer or accountant in this regard.

If you are buying the property with another person, such as a spouse or defacto partner, you would normally ensure that you are noted on the title as Joint Tenants. If you register as Joint Tenants, then upon the death of one Joint Tenant, the survivor/s must register this death on the Title.  Upon registration, the ownership vests in the surviving Joint Tenant.  Each Joint Tenant owns an equal share in the whole of the land.

If buying with friends, siblings or investment partners, it is more common to purchase as Tenants in Common. On the death of a Tenant in Common, the Executor applies to the Court for Probate of the Will.  When this is granted, the estate of the deceased proprietor in the land is transmitted to the Executor, who then transfers it to the beneficiary named in the Will.  It is important to re-examine any existing Will if you intend to register in this manner.  Tenants in Common can hold in equal or in unequal shares. This is often determined by the proportion of capital contributed. Thanks to a recent ruling by Revenue SA, it is now possible to change the purchasing entity after you have signed the Contract without attracting additional stamp duty charges.

Do You Want Title Insurance?

Title insurance is becoming more popular and is something to consider when buying a property. It is a one off fee and covers you against risks such as fraud, illegal building works, survey and planning defects and outstanding rates and taxes. Your conveyancer will be able to provide you with more information.

Make Sure You Insure The Property Immediately Upon Cooling Off Expiry.

Strata and Community Title properties normally have insurance in place but for Torrens Title properties, you need to arrange your own policy. The reason for this is that upon signing the Contract, the property is at your risk which means that if the property were to be damaged prior to settlement, then you would be considered the owner and could suffer a significant financial loss. Mortgagees require you to provide them with a copy of this policy prior to settlement with their name noted as an interested party.

How Much Deposit Do I Need To Pay?

Upon cooling off, you will need to pay the specified deposit by way of cash or bank guarantee to the agent. Usually, the deposit is 5–10% of the purchase price so you need to ensure that you have this amount available at short notice.

Do You Wish To Lodge A Caveat?

In some circumstances, purchasers may choose to lodge a caveat to protect their interest as purchaser under the Contract. This is common where there is a long settlement period or if you are concerned that the Vendor may attempt to deal with the property with someone else.

Is Your Contract Subject To Any Special Conditions?

If you need finance approval and/or a building inspection you should ensure that these are included in the Special Conditions to the Contract. This means that if either of those conditions are not met, you will be able to rescind the Contract without suffering any adverse legal or financial consequences. However, if you are purchasing the property at auction you will not have this option available and you also will waive your cooling off rights. Before bidding at an auction, ensure that you have your loan pre-approved and you have carried out any inspections that you require.

What Is A Form 1?

The Form 1 is required to be served on you 10 clear business days prior to settlement. The Form 1 details your cooling off rights, full details of the property and responses from various government departments. It is a long and sometimes confusing document to those unfamiliar with it. However, your conveyancer will be able to explain it to you. If your conveyancer does find a discrepancy in the Form 1, then you are entitled to ask for a new Form 1 to be served. In that instance, your cooling off rights recommence.

When Should You Settle?

Normally settlement is within four weeks of signing the Contract but you may request a longer time frame if you need it as long as the vendor agrees to it.

A property is one of the most expensive investments you will ever make. It is important to surround yourself with qualified and experienced professionals who can help you make the right decisions and assist you with a smooth and stress free settlement process. If you need more information on any conveyancing matters, feel free to contact Linda Scalzi at DW Fox Tucker Lawyers.

For more information, please contact:
Linda Scalzi

Linda Scalzi
Conveyancer
p.  +61 8 8124 1835
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this report, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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