Buying Property - Frequently Asked Questions
1. Why does the settlement process take 6 weeks?
The standard settlement process takes 6 weeks as this allows for your bank and the seller to prepare for settlement. The main delay in the settlement process is finance so it is important for you to organise your finance by signing and return your mortgage documents as soon as possible. Your bank will need time to certify the mortgage documents and calculate the funds available. During this 6 week period Prime Conveyancing will also conduct further checks on the property to ensure that you are not left with any council or water rates debt.
2. Why are there adjustments made on settlement?
On settlement you will pay the balance of the purchase price (less the deposit you have already paid) and also several adjustments. Adjustments are made to account for any council, water rates and strata levies paid by the seller following the date of settlement. Without these adjustments the seller would have paid your water bill for the period following settlement. Conversely, in some circumstances the seller may be in arrears of their council, water or strata levies and the adjustments are made to ensure that you do not get stung with a large rates notice following the settlement date.
3. What is the difference between joint tenants and tenants in common?
When you are transferring property you may be asked to specify the type of tenancy that will apply to your purchase. Joint Tenancy means that title passes by survivorship (the last person alive takes all) and is commonly used by married couples as it will avoid the need to obtain a grant of probate in the event of the death of either joint tenant. Tenants in common is a type of ownership distinguished by a percentage or share in the property, for example, you may have a 50% share, or 20% in the property and the other owner the balance. Any property owned as a Tenant in Common will pass according to the terms of your Will and not according to the law of survivorship.
4. How is stamp duty calculated and when do I have to pay it?
Stamp duty is calculated by the Office of State Revenue on the purchase price for transfers of land based on a scale relative to the purchase price. Prime Conveyancing will calculate this duty for you and will also attend to the stamping of the contract and transfer. Stamp duty must be paid on the earlier of settlement or 3 months from the date of the contract to avoid interest being charged. If you are buying a property ‘Off the Plan’- meaning that the property has yet be constructed and settlement is dependant upon completion of the dwelling, then stamp duty must be paid within 15 months from the date of the contract. There are a number of exemptions and concessions from stamp duty and if you are relocating to certain rural areas, buying a new property or are a first home buyer you should contact Prime Conveyancing to find out how much duty is payable on your impending purchase and whether there are any exemptions or concessions available.
5. I am a first home owner, do I need to pay stamp duty? What are my entitlements?
If you are a first home owner and you are purchasing a new home up to the value of $500,000.00 or you are buying vacant land up to the value of $300,000.00 you will be entitled to a stamp duty exemption- meaning nil duty. First home owners will also be entitled to the First Home Owners Grant of $7,000.00 (if your property is below the threshold of $835,000.00) and your financial institution will prepare the first home owner grant application to ensure that those funds are available for settlement.
Could not find what you were looking for, have another question, want to obtain a quote or need Prime Conveyancing to assist with your purchase? Contact us by calling (02) 9521 2222 or clicking here. Prime Conveyancing offers the most comprehensive contact advice in Sutherland, Parramatta, Hurstville or Sydney and is a must before you sign on the dotted line. We hope to hear from you soon!