Buying property? Selling property? The process just got more complicated.
There have been a number of changes to the laws surrounding buying and selling real estate, and the processes involved in the past couple of months, mainly focusing on cracking down on foreign investors and attempting to reduce the rising threat of identity fraud. The key changes are:
- From 21 June 2016, the 2016 NSW Budget introduced a 4 per cent surcharge purchaser duty on the purchase of residential real estate by foreign persons. The surcharge is in addition to the duty which would normally be payable on the purchase of residential property.
- Foreign purchasers will no longer be entitled to defer their payment of stamp duty on off the plan purchases of residential property . Previously, stamp duty on any off the plan purchase could be deferred by 12 months.
- From July 1 2016, purchasers of property where the purchase price is $2 million or more will be required to pay an additional withholding tax of 10% of the sale price to the ATO. This requirement can only be avoided if a clearance certificate confirming that the vendor IS NOT a foreign resident is provided to the purchaser before settlement. Payment is due upon settlement.
- Australian residents selling property for $2m or more from 1 July 2016 must obtain a clearance certificate to provide to the purchaser, otherwise the withholding tax will be payable.
Verification of identity
- On 1st May 2016, the Land and Property Information announced the implementation of the Verification of Identity (VOI) Standard. Anyone who is required to sign a to document which deals with land (for example a transfer of land, a commercial or retail lease, a mortgage) must have their identity verified. This involves a face-to-face interview, sighting eligible original ID documents and retaining evidence for 7 years. Compliance with this standard becomes mandatory for all land dealings (paper and electronic) on 1st August 2016.
- From 18 July 2016, a Purchaser Declaration Form from the Office of State Revenue must be completed by any person entering into a transaction that results in the acquisition of an interest in land in NSW, on or after 21 June 2016. This declaration must be completed by all purchasers, and signed by a qualified witness declaring the supporting documentation (which includes a certified copy of birth certificate or passport if the party is an individual).
What does this mean for you?
If you are buying or selling property, or entering into some other type of transaction to do with land, such as a subdivision or lease, you will find that there are a few more steps to the process. Your conveyancer or lawyer will be asking you for more documentation and identification, so that they can fulfil their obligations.
What is most important, is that you have an experienced professional assisting you with your transaction. Here at Watkins Tapsell we are up to date with the regular changes to laws and budgets which require new processes and procedures, and we can work with you to make the process as smooth as possible. If you have any questions about buying or selling your property, or other property transactions, please contact our Property Law Team on 9521 6000 or firstname.lastname@example.org