Tag Archives: Buying Property NSW

Why wouldn’t settlement take place on the Contract date?

1 Reply

What reasons could settlement be delayed?
Can you guarantee the settlement date?

These are some of the most common questions I get asked during a conveyancing matter. Of course – I completely understand why! You need to know what date you’re getting your money, what day you need to book the removalist for and bribe all your friends to help you move. It’s one of the most important factors for you when you are buying or selling property.

Unfortunately I can’t guarantee the settlement date any more than I can guarantee that I personally will be alive tomorrow to help you with your conveyancing. I certainly plan to be – but some things are just outside of our control – and I only make guarantees that I know I can honour.

With the property market starting to heat up, and particularly just after the Christmas break, I’ve noticed an increase of properties not settling on the agreed date under the Contract. This is probably caused partly by buyers entering into Contracts before they were ready in fear of missing out on the property to somebody else, and partly by losing some of the working days over the Christmas break for conveyancers, solicitors and banking institutions to process their paperwork in time for the settlement date.

In January we had 6 files not settle on the agreed Contract date and for each file the reason was because either the discharging or incoming mortgagee was not ready.

So the best lessons we can learn from these facts is that you should have your pre-approval ready with your chosen financial institution before you go looking at property, and then when you find the right house tell them straight away so they can give you the formal unconditional approval on that property. Find somebody accountable, it helps if they are also local, that you can check in with at your bank or building society so you can make sure that they will be ready for settlement.

You certainly can’t choose the timing of finding the right home, or the right buyer for your home, but if it happens around Public Holidays, consider lengthening the Contract time a little to allow financial institutions sufficient time to be ready. This may mean that settlement is a little longer than you would have ideally wanted, but you will be more likely to have your settlement go through on the intended date. Particularly if you are exchanging Contracts with your Real Estate Agent, you could suggest this option to them, and call your Conveyancer and lender before exchange to ask if they believe they can meet the expected settlement date. For example, over this past Christmas break our office returned to work on 2 January 2014, most other firms returned on 6 January 2014, and some didn’t come back until 20 January 2014. Everybody deserves a holiday, but obviously the amount of working days dictate when the matter will be ready for settlement, and this is a problem that can be foreseen, and worked around to give you a more reliable settlement date.

Lastly, be aware that even if every person does everything right – your property matter may still not settle on time.
Unfortunately disasters do happen from time to time and may mean that settlement is delayed, for example: – If the tenant doesn’t move out; if a caveat is lodged to say a person has an interest in the property; if the property is vandalised, or has storm damage, or if there’s a fire in the property.

But rest assured that the vast majority of property settlements do, in fact, take place on their Contract date.

Benefits available in 2014

Leave a reply

As we start a new year with wonderful possibilities you may be wondering if it’s the right time for you to buy or sell this year. Interest rates are low, the housing market is strong and there are a number of grants that are available in 2014 which you may be eligible for to help you on your way.

The government, unfortunately, is not currently offering very supportive incentives to First Home Buyers to assist them in taking the first step into the property market, which I strongly hope they reconsider. For now the only benefits available are for First Home Buyers who can afford to buy a brand new home, or a vacant block of land to build their first home. If you are one of these lucky first time home buyers you may be eligible for free stamp duty, and a $15,000 Grant.

For people buying a brand new home, whether you are upgrading, downsizing or an investor, there is a $5000 New Home Grant available. Also, for people moving from a metropolitan area and buying a home in a regional area there is a $7000 Regional Relocation Grant.

Sometimes that little bit of extra assistance can really make a difference, so I’ll summarise the benefits available in 2014 for your consideration.

First Home – New Home scheme

First Home Buyers purchasing a brand new home under $550,000 can apply for an exemption from Stamp Duty, or if the purchase price is between $550,000 and $650,000 you can apply for a discount on your Stamp Duty under this Scheme.

 

If you are buying a vacant block of residential land to build your first home for under $350,000 you can apply for an exemption from Stamp Duty, or if the purchase price is between $350,000 and $450,000 you can apply for a discount on your Stamp Duty under this Scheme.

 

First Home Owner Grant (New Homes) scheme

First Home Buyers purchasing a brand new home, or vacant block of residential land to build your first home for under $650,000 can apply for the $15,000 First Home Owner Grant (New Homes) under this scheme.

To be eligible for the First Home New Home Scheme, or Grant above:

  • at least one buyer must be an Australian citizen or permanent resident
  • the agreement must be for the purchase of the whole property
  • you must be a natural person (not a company or trust)
  • you must be over 18
  • the home is a brand new home
  • you or your partner have not previously owned property in any form in Australia
  • at least one purchaser must occupy the home within 12 months and needs to live in the home for a continuous period of at least 6 months.

New Home Grant scheme

If you are purchasing a brand new home (including “off the plan”), or vacant land on which a new home will be built then you can apply for the $5,000 New Home Grant under this Scheme. The Grant is paid by reducing your Stamp Duty costs, and if there is any money left over, then this would be paid to you by cheque.

 

There are no restrictions on the number of times you can apply for the Grant, so if you are an investor considering purchasing more than one new home, then you can apply for the $5,000 New Home Grant Scheme each time! You can be a natural person, a company or trustee of a trust, and the grant is available to investors as well as owner occupiers.
To be eligible for the New Home Grant:

  • Applications must be made within 3 months of the date of exchange of Contracts.
  • The value of the new home must not exceed $650,000 and the value of vacant land must not exceed $450,000.
  • For vacant land, construction of the home, by way of laying foundations, must commence within 26 weeks after settlement of the purchase. However, there is no limit on the time of construction.

Regional Relocation Home Buyers Grant
If you are purchasing a residential home in a Regional “Country” Area and selling your current home or moving from a rental property in a Metropolitan “City” Area then you can apply for the $7,000 Regional Relocation Home Buyers Grant. There is no price limit on sale of the metropolitan home. Application for this grant can be made after purchasing the regional property and your name is on the title deed. The Grant is paid electronically into your account within 21 days from application.

This is a list of Metropolitan “City” Areas:

  • the Sydney metropolitan area (incl Ashfield, Auburn, Bankstown, Blacktown, Blue Mountains, Botany Bay, Burwood, Camden, Campbelltown, Canada Bay, Canterbury, Fairfield, Gosford, Hawkesbury, Holroyd, Hornsby, Hunters Hill, Hurstville, Kogarah, Ku-ring-gai, Lane Cove, Leichhardt, Liverpool, Manly, Marrickville, Mosman, North Sydney, Parramatta, Penrith, Pittwater, Randwick, Rockdale, Ryde, Strathfield, Sutherland Shire, Sydney, The Hills Shire, Warringah, Waverley, Willoughby, Wollondilly, Woollahra and Wyong)
  • the Newcastle local government area
  • the Wollongong local government area.

Regional “Country” Areas are participating local government areas outside the above, and if you are uncertain of the Council Area for the home you are selling or buying, you can conduct a ‘Local Council Search’ through the Division of Local Government website. Please note that the Byron local government area, although regional, opted out of the scheme.

In 2014 they have broadened the Grant so that where the metropolitan home is sold and 2 regional properties are purchased, applications for both properties may qualify. However in 2014 they have also applied a minimum distance requirement of 100 km between the metropolitan home and the regional home to be eligible to receive the grant.

To be eligible you must:

  • be a natural person (not acting in the capacity as trustee)
  • at least one applicant must be an Australian citizen or permanent resident.
  • have bought a regional property for less than $600,000 for a home, or less than $450,000 for vacant land.
  • start living in the regional property within 12 months from the purchase, for at least 12 continuous months. If you have purchased vacant land you must commence construction of your home within 6 months and be residing in the home within 12 months of the date of purchase
  • have lived in your metropolitan home in the 12 months before purchasing your regional property. The metropolitan home must be sold in the 12 months before or after the purchase of the regional property, OR
  • have been renting a home in a metropolitan area in the 12 months before purchasing your regional property and can establish a 2-year continuous rental history in this and other metropolitan homes.

The above information has been simplified to make it easier to understand. There are however, firm requirements that must be met to be eligible for each benefit so if you would like to know more please contact the Office of State Revenue http://www.osr.nsw.gov.au/contact or I would love to hear from you.

I encourage comments and also invite you to be involved and ask any questions or suggest a future topic.

Helpful Link

 

http://www.osr.nsw.gov.au/grants