Transfer Duty Concessions
There are currently three concessions available to purchasers of residential properties, being:
- First Home;
- Home; and
- First Home (Vacant Land on which your build your first home).
We recommend that you review your eligibility for any of the above concessions prior to signing your contract so that you are aware of your transfer duty liability (if any) and can inform your solicitor accordingly.
You can assess your eligibility for these concessions online at:
First Home Owners Grant (FHOG)
First home owners may also be eligible for the First Home Owners’ Grant (FHOG)
The Queensland FHOG is a state government initiative to help first home owners to get their new first home sooner. Depending on the date of your contract, you’ll get $15,000 or $20,000 towards buying or building your new house, unit or townhouse (valued at less than $750,000). You can even buy off the plan or choose to build yourself.
You can check your eligibility online at: https://firsthomeowners.initiatives.qld.gov.au/
Choosing a Bank or a Broker
Finance is a crucial aspect to consider when buying a home. A commonly asked question is who to see when considering finance. A banker can generally only offer you products specific to their bank whereas a broker has a wider range of options and can offer you many different products which can tailor to your needs.
When you meet with your banker or broker you should ask them the details required to complete the contract’s finance clause, being:
- the timeframe for obtaining an unconditional approval (for example, 21 days from the Contract Date);
- the lender (bank) who they intend to lodge your loan application with; and
- the amount of the loan (taking into consideration legal fees, transfer duty, registration fees, your deposit and other costs such as moving fees and the adjustments to be made under the contract (rates, water, body corporate levies, etc.).
Lenders Mortgage Insurance (LMI)
When you meet with your broker it is important to discuss whether or not Lenders Mortgage Insurance (LMI) will apply to your loan and if so, the cost that your bank will be charging you. LMI is insurance taken out by your bank to cover it in the event that you default.
Setting up a “shortfall” account
It will make the conveyancing process much easier if you liaise with your broker/banker to set up what is known as a “shortfall account”. A shortfall account allows your deposit to be drawn at settlement alongside your loan, although please note that some banks do not offer this facility.
You should factor in the cost of registration fees which are the government charges (in addition to transfer duty) for the registration of the change in ownership of the property.
Registration fees can be calculated online at https://www.business.qld.gov.au/industries/building-property-development/titles-property-surveying/titles-property/fee-calculator
Please note that the registration fees are reviewed annually and are subject to change at the discretion of the Queensland Government represented by the Department of Natural Resources and Mines. This means that, although you may sign the Contract in a prior year, the registration fees for the year in which your change of ownership documents are lodged may have higher registration fees.
The standard REIQ contracts in Queensland provide that the property being purchased is at the Buyer’s risk from 5:00pm on the first Business Day after the Contract Date.
You may wish to consider amending this clause to provide that risk remains with the Seller until the Settlement Date. If you consult us before signing a Contract, we can implement this amendment for you.
This saves you having to take out an insurance policy prior to actually owning the property.
There is a section on REIQ contracts that allows the parties to insert any chattels (moveable objects) to be included in the sale.
It is important that you list all of the chattels you intend to receive as part of the sale.
Example of chattels can include rugs, blinds, drapes, air conditioning remotes and many other objects.
If you are buying land in an estate that is subject to building covenants, you should thoroughly review them and show all of the relevant documents to your builder so as to ensure that you comply with the terms and conditions.
For more information please contact our dedicated conveyancing solicitor Troy Roberts on 07 4081 7111.