October 24, 2017

Understanding Settlement Figures and Adjustments

We already know that conveyancing in Australia is the process of transferring property ownership from one entity to another, and a property conveyancer is a licensed individual who will handle the end-to-end process. Some of the terms that you will encounter in conveyancing are settlement figures and settlement adjustments. Here are some of the things that you need to know:

  • Settlement figures refer to the computation of the actual amount of money that will be handed over at settlement. In general, the seller pays for all expenses. He/She is also entitled to any rent income until settlement. As for the buyer, he/she is in-charge of paying for expenses and entitled to get any rent income after settlement.
  • Settlement adjustments enable parties to make up for the expenses of each other that may be paid for in advance.
  • Adjustments in water usage will depend on where the property is located. In areas where the local council supplies water, usage and charges are normally part of the rates notice. In some cases, water is supplied by a third party. But no matter who the supplier is, the seller is in-charge of paying for all water consumption and charges computed until settlement.

On the part of the buyer, he/she needs to order a special water meter read that will enable them to calculate the water consumption and charges that the seller needs to pay until settlement. This amount will be deducted from the amount payable by the buyer to the seller through adjustment. In this way, the seller’s share of the water usage is already pre-paid to the buyer as soon as a new water bill is released.

  • There are no adjustments between parties when it comes to electricity. Since the seller will cancel his/her account while the buyer needs to open his/her own account for power. In other words, the electricity bill of the seller will not be passed onto the buyer.
  • As for land tax, it is not normally subject for adjustments for residential land and buildings. In most cases, the seller needs to pay for all land tax owed for the financial year when settlement occurs. This is because not all buyers will be required to pay land tax after settlement. Adjustment in land tax takes place for commercial properties or if the contract is for an unregistered land or unit, or off the plan contracts.

Do you have other ideas on settlement figures and adjustments? Share your tips in the comments section.

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7 Questions that You should Ask Your Conveyancers

Buying a home is an exciting affair, but it can also be time-consuming, not to mention the many factors that need to be considered before signing the contract. Since it involves many considerations and a lot of money, it is best to seek the services of a qualified individual. For this process, you need a property conveyancer.

What does a conveyancer do? He/She will manage the transition of property ownership from the seller to the buyer. It’s a great responsibility, so it is essential that you know what a property conveyancer can and should do on your behalf. Make a thorough research, and ask the right questions so you will better understand the process and at the same time, ensure that the property conveyancer has the capabilities to handle the entire process.

Here are some questions that you can ask the conveyancer:

1. What are the documents that I need to prepare?

Having a property conveyancer doesn’t mean that you have nothing to do as a buyer or seller. Ask what documents that you need to prepare to keep the ball rolling.

2. How long does the process take?

In general, conveyancing takes about 8-12 weeks. Knowing this will help you set your expectations and see if the conveyancer is capable enough to deliver.

3. What’s in the contract?

We are always told to read the fine print of any legal document but some people just browse through documents and sign to get it over with. If there are terms that you’re not familiar with, the property conveyancer will be there to explain things to you. For instance, when looking at the specifics of the deed of sale, confirm if certain items are indeed part of the sale.

4. How much will the conveyancing service cost?

Know the cost of the service so you can include it in your budget. Make sure to ask this in advance so you will have enough time to prepare for all the expenses.

5. Do you provide assistance even after completing the process?

It is crucial to get support even after the completion of the process, as there may be other matters related to the sale of the home that need to be settled.

6. Is the zoning as advertised?

It goes without saying, but it’s better to be safe than sorry. Ask your property conveyancer to confirm that the zoning limits are as advertised.

7. Is it necessary to have Professional Indemnity Insurance?

Ask your conveyancer if there is a need to get a professional indemnity insurance. This states that when something goes wrong during the process, you are entitled to make claims for damages.

Do you know other questions that we need to ask our property conveyancers? share your ideas on conveyancing in Australia in the comments section.

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What to expect on the settlement day

When it comes to conveyancing in Australia, one of the official processes is the settlement. It is done between representatives of the buyer and seller of the property. If you’re the buyer, your property conveyancer will be the one to meet the representatives of the seller. Both parties agree on a time and place for the settlement day.

What happens on the settlement day? Here are the things that can expect on this big day:

  • The property conveyancer will receive the title. He/She will also register you as the new official owner of the property.
  • The lender will pay the balance of the purchase price to the vendor. This marks the start of the mortgage.
  • There will be an exchange of checks wherein the seller can claim the deposit from the real estate agent. The buyer is not required to be present in this exchange as it will be between the property conveyancer and the seller, although in most cases, the lender’s representative will be present.
  • Other fees and duties will be paid to the government.
  • After completing all documents, the buyer will receive the keys to the property.

Settlement day is a major event. If you’re a buyer, here are some things that you can do before the settlement day to keep stress at bay:

  • Check the property and make sure that everything is in good condition. This includes fixtures and fittings that are included in the contract. In case you only have time to do this on the actual settlement day, make sure to do the inspection in the morning so there will still be time to settle issues, if any, throughout the day.
  • Work with your property conveyancer in preparing documents for the transfer of ownership. These include stamp duty, transfer of land, etc.
  • Put the funds required over and above your loan into a legal trust account.  This will be helpful in case the bank encounters a transfer error.

Settlement day need not be a stressful one. In fact, you should look forward to it as it marks the beginning of your status as the official owner of the property. But don’t let excitement lead you into moving in on settlement day. All representatives must be present on that day, and it can get delayed even though it was scheduled in the morning.

Got other ideas on what to expect on settlement day and conveyancing in Australia? Share your insights in the comments section.

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Conveyancing for a Newly Built Home

Conveyancing refers to the process of transferring property ownership of a newly built home from one entity to another. The individual that does this process is called a property conveyancer. Bear in mind that the process for a newly-built property differs from that of buying one that already exists. For one thing, you need a lawyer who specialises in this kind of conveyancing. Here are some important things to take into account when it comes to conveyancing for a newly built home:

  • Secure the contract of sale. This is probably the most essential document that you need to get, since you are eyeing for a house that is not yet constructed. Discuss with your lawyer or property conveyancer other factors associated with the property. Some of these are the proposed floor plans, defects, date of completion, financing, as well as the cooling off period.
  • Check what’s included in the contract. Check the list of inclusions indicated in the contract. For instance, there can be a section which states that in case the original inclusions are not available, the builder is entitled to use those with similar features as a replacement. The contract should likewise come with warranties to provide protection in case the builder makes some changes.

Speaking of changes, the contract should also indicate that the builder can make minor changes to comply with the requirements of council planning. If there are changes that can greatly affect the build of the house, there should have a section which states that the buyer can cancel the contract.

  • Consider the stamp duty costs. Ask your property conveyancer about stamp duty as certain locations have grants or concessions such as the First Home Buyers Grant.
  • Know your legal rights. There are several things to take into account when buying a house that’s yet to be built. Make sure you understand what your legal rights are in case there’s a delay in the construction, or if you need to cancel the contract. These also include the fees associated with the cancellation.
  • What if you’re buying the property with someone else? If this is the case, it should be Joint Proprietors or Tenants-in-Common. Make sure to inform your property conveyancer, because if you don’t have a section in the contract which states that you’re purchasing the property with another individual, you may be charged Government Stamp Duty twice.

Got other ideas on conveyancing in Australia? Share your insights in the comments section.

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Everything You Need to Know About Capital Gains Tax (CGT) in Australia

Taxation is a broad topic. An Australian property investor would know the different taxes associated with assets and investments.  There’s investment property tax, income tax, and capital gains tax (CGT).

What is CGT? This is the tax you pay for capital gain or capital loss on an asset which is the difference between the amount you’ve paid for it and what you receive after selling it. While it is called capital gains tax, it is not a separate tax. It is actually part of your income tax.

Here are important things to know about capital gains tax:

  • As an Australian resident, the capital gains tax is applicable to your assets wherever they are in the world. As for foreign residents, a capital gain or loss occurs if it involves an asset that is considered taxable Australian property.
  • Keep all initial sale contracts, interest paid on related borrowings, receipts and records of expenses, as well as valuations. It is easier to know the amount that you need to pay if you have all the necessary documents.
  • When should you pay CGT? Since it is not a separate tax, you’ll pay it as part of your income assessment for the relevant income year.
  • Is there a chance that you don’t have to pay CGT? You shouldn’t pay CGT if you make a net capital loss in a given income year. Bear in mind that the net capital loss will not enable you to offset tax on any other form of income. What will happen is, it will be carried over to offset capital gains in the coming years.
  • CGT does not apply to personal assets such as your home, vehicle, furniture, and other items for personal use. Depreciating assets such as business equipment or fittings are also exempt from CGT.
  • You can get a 50% discount on your capital gain for any CGT asset that is held for more than a year before selling it. This is on the assumption that you don’t have other capital losses.
  • CGT rates vary among individuals and companies. For the former, the rate to be paid is the same as the rate of the income tax for that year.  As for a company, it is not entitled to any discount on CGT. Instead, it needs to pay 30% tax on any net capital gains.

Got other ideas on capital gains tax in Australia? Share your insights in the comments section.

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Common Conveyancing Searches that You Should Do When Buying a House

Buying a house or property is a huge investment, and to ensure that your hard-earned money will not go to waste, one important step is to conduct all the necessary conveyancing searches. If you hire a property conveyancer, he/she will be able to ensure that all searches will be done.

Why are conveyancing searches important? These are carried out to confirm that the seller is the owner of the property that you want, and that he/she has the right to sell it. With these searches, you can be sure that you will get the proper title to your house or property.

Here are the common conveyancing searches when buying a house:

Building and Pest Inspections

It is advisable to seek the help of an expert to handle the building and pest inspection of the house that you intend to buy. If there are significant defects or problems, you can use these to renegotiate the price with the seller.

Survey Report

This is usually attached to the contract. If not, the seller should provide the survey report or make the contract conditional until the report becomes available. If this is not the case, you can ask a surveyor to survey the property. This is also called an identification survey. This is an important conveyancing search since the report will let you know, as a buyer, if there are any encroachments on the property.

Inspection of Records

This is usually done during the selling period, before the settlement process. This conveyancing search can include the current rates position, flooding reports, road acquisitions and study areas, and the locality map. It can likewise include details on sewerage network and storm water network. This search also provides information on property notices and defects, resident parking permit, and environmental health licences.

Search of the Council’s Records

Another conveyancing search before the exchange of contracts is checking the Council’s register and records to know if there are outstanding conditions of consent associated with the property. You never know, the property may have unfulfilled conditions or any development applications with neighbouring properties or ongoing issues that can be a total game-changer.

It is better to hire a property conveyancer to make sure that all the necessary conveyancing searches will be carried out. You can also do your research and ask other people who have experience with conveyancing searches to be done when buying a house.

Got other ideas on conveyancing in Australia? Share your insights in the comments section.

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The Pros and Cons of DIY Conveyancing

If you’re into buying and/or selling properties, you’ve obviously heard of the term conveyance or conveyancing. It is the process of transferring ownership of property from one person or entity to the other. Conveyancing is usually done by a qualified professional called a conveyancer.

What does a conveyancer do?

There is a long list of tasks a conveyancer does to ensure that the transfer of property ownership will run as smoothly as possible. A conveyancer examines contracts and inspection reports, manages the property and land title searches, checks the property’s compliance with state and local laws, and answers all questions of the buyer or seller on behalf of his/her client.

Many hire conveyancers for their properties, but some people opt to do the process themselves. If you’re considering DIY conveyancing, make sure that you’re knowledgeable about the entire process. To help you better understand the roles of property conveyancers and conveyancing in Australia, let’s look at the benefits and disadvantages of conveyancing:

Pros

You don’t need to pay a conveyancing fee

Of course, hiring a property conveyancer comes with a price which can be at least $1,000 or more. But if you’re into DIY conveyancing, you can save money since you don’t have to pay a fixed fee.

You have full control over everything

You are directly involved in every step of the process, from reading through contracts to submitting all necessary documents.

Cons

A property conveyancer is knowledgeable about the industry

Conveyancing in Australia involves a lot of terms that you may not know about. By not hiring a conveyancer, you may find it hard to understand what these industry terms are and committing mistakes during the process is possible.

You have no protection

If you do the process yourself, you run the risk of missing an important step that can delay the settlement.

You may not be aware of the latest laws

A property conveyancer stays updated on conveyancing laws that change quickly. If there are changes in property and tax laws that you’re not aware of, the settlement process may be delayed.

These are just some of the pros and cons of DIY conveyancing. Should you decide to take the DIY route, make sure that you understand the ins and outs of the entire process. Do your research on what conveyancing in Australia entails. You may also want to seek feedback from family members or friends who have done DIY conveyancing.

Do you have other ideas about conveyancing in Australia? Share your insights in the comments section.

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How Does Conveyancing Work in Australia?

If you’re planning to buy or sell a property, update a property title, or register, change or remove easements, it pays to seek professional advice from a conveyancer. He/She is a licensed or qualified individual who takes on the process of transferring ownership of property from one entity to another. This process is called conveyancing and it consists of three stages: before the contract, before the completion of the transfer, and after the completion.

What Does a Conveyancer Do?

A property conveyancer has the knowledge and expertise to supervise the smooth transfer of property ownership. Accredited by the government to handle conveyancing, he/she will help you, as a buyer, to prepare all the documents needed for the transfer, check easements, identify the type of property title, calculate the adjustments on taxes, as well as represent your interest to the vendor or agent. If you’re a seller, a conveyancer will help you to ensure that all required legal documents are available. He/She will be able to answer the questions, if any, from the buyer.

How to Find a Conveyancer

You’ll find a lot of different property conveyancers, and to find the right one that meet your requirements, you need to do some research by visiting the Australian Institute of Conveyancers website. The Australian Institute of Conveyancers is the body which represents registered and licensed conveyancers. Their website provides information on conveyancing in Australia. You can likewise ask around and see if they have worked with a conveyancer before. Getting a referral from someone you know can help you find the right conveyancer. You real estate agent may also know some conveyancers who can help you with your property.

Once you have a list of conveyance prospects, make sure to interview them to get to know their work experience and attitude. You can ask these questions:

  • Are you a member of the Australian Institute of Conveyancers?
  • What types of property do you specialise in?
  • What are your fees and charges? What are the services covered in those fees?
  • How can you keep me updated? How often?
  • On settlement day, what are the expected timeframes?

These are just some of the things worth-knowing about conveyancing in Australia. If you’re a property buyer or seller, it is better to consult a good property conveyancer to avoid any inconvenience when transferring property ownership.

Got other ideas about conveyancing in Australia? Share your experiences in the comments section.

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Risks of Not Getting a Conveyancer

Real estate is an ever growing market, and if you’re new to the industry, you will come across a lot of terms that you need to be familiar with. One of these terms is conveyance or conveyancing. It is a process that you will encounter when transferring ownership of property from one entity to another. The person who does this is called a conveyancer.

What does a conveyancer do?

A conveyancer is a professional individual who is in-charge of a range of responsibilities. He/She focuses on ensuring that everything that is needed to make the transfer of property ownership as smoothly as possible is in place. With professional experience and know-how, a conveyancer will be able to explain to you in detail on what documents to prepare, when to submit them, and how to transfer titles.

What are the risks of not getting a conveyancer?

Given the importance of a conveyancer in moving property ownership, there are obviously risks of not getting one. If you’re into buying and selling property and we’re talking about hundreds of thousands of dollars, it is best to get a conveyancer instead of skipping this step just to save some cash. Doing conveyancing on your own is possible, but carefully check if what you can save from commission fees and other charges will make up for your chances of getting more from your investments.

Another risk of not getting a property conveyancer is that with terms and procedures that you’re not familiar with, handling them may take a lot of your time. But if you hire a conveyancer who understands what transfer of property ownership entails, everything will be done accurately and quickly.

Also, getting a conveyancer is important especially if the sale is a difficult one. Conveyancing includes dealing with banks, the council, and other aspects that may make the transfer of ownership complicated. Without a conveyancer, it will be hard for you to address issues that may arise during the process.

There are several factors involved when it comes to conveyancing in Australian, that is why it pays to weigh the pros and cons carefully before starting the conveyancing process. By knowing the benefits and risks, as well as your preferences and financial situation, you’ll be able to come up with the right decision for your property.

Do you know other things to consider when getting a property conveyancer in Australia? Share your ideas in the comments section.

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Small Conveyancer versus Large Conveyancer. What’s the Difference?

In its simplest form, conveyancing refers to the process of preparing documents needed to transfer ownership of a property from one entity to the other, and the licensed and qualified individual who does conveyancing is called a conveyancer.

What does a conveyancer do? He/She undertakes tasks in making sure that the transfer of property ownership goes smoothly. You will most likely engage with a conveyancer if you are buying or selling property, updating a title or managing easements. A conveyancer will also be able to provide details about the property, prepare all necessary documents, as well as handle the settlement process.

When it comes to property conveyancers, you may discover that there are small conveyancers and large conveyancers. Is there a difference? The answer is yes. Conveyancers are not created equal. In the process of finding the right property conveyancer for you, you’ll know that there are those who are self-employed or connected with a small business, while there are those who work I solicitors’ offices. They also differ in fees as well as other services offered.

Here are the other differences of small conveyancers and large conveyancers:

  • Large conveyancers have a team of lawyers. Conveyancing in Australia involves a wide range of laws and business practices, and having a team of lawyers with extensive experience may be a better option.
  • A well-established team has your best interests in mind. While small conveyancers can offer excellent conveyancing services, large conveyancers have years of experience and level of expertise that small conveyancers may not always have.
  • Better administration makes the process stress-free. Years of experience that large conveyancers offer can translate to better administration of the entire process. That is why it is important to compare quotes from different firms to find the one that meets your requirements.
  • There’s someone you can rely on when the need arises. You may encounter issues during the process of transferring property ownership. Small conveyancers may not be able to have someone who will readily help you and understands what needs to be done in any complication. On the other hand, large conveyancing firms are composed of large teams of lawyers and professionals who are more equipped to help no matter what the issues are.

These do not imply that you need to avoid small conveyancers. In the end, it really depends on your requirements and budget. Besides, property conveyancers in Australia have all undertaken training and programs so they can better perform their tasks and give you expert conveyancing advice.

Do you know other things worth-considering about conveyancing in Australia? Share your ideas in the comments section below.

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