Australia maintains a very inward-looking and conservative policy in terms of residential real estate. Acquisition of the residential real estate by the foreign national as well as corporations is always a subject to approval of Foreign Investment Review Board (FIRB). However, this particular approval is not required by the Australian citizens resident abroad or for the acquisitions in terms of residential zoned properties by the foreign nationals who hold permanent resident visas.
The foreign investment is provided only in the areas which are contributing to the increase of housing stock. The approval of the government is considered obligatory in buying residential real estate in the country. At the same time, it is inadvisable to sign a contract prior to securing an approval from the FIRB unless the contract permits for a grace period for securing the approval of the government.
The following steps are involved in buying property in Australia:
- Securing of a title search, plans, easements and covenants by the sellers from the Land and Property Information department.
- Securing a zoning certificate from the Municipal Council and Drainage Diagram from the local water authority.
- Preparation of transfer form by the solicitor for the execution of sale.
- Sending the contract and transfer form to the Office of State Revenue for stamping and settlement of duties.
- Sending of the transfer form and certificate to the Land and Property Information Department for registration.
The stamp duty while buying land depends upon the total value of property. If the contract is not stamped within three months, an exchange penalty becomes due which is payable at the rate of 12.78 percent per year.
Registration Fee is then paid to the Land Titles Office and the same varies from state to state. Some states impose a fixed fee while the others impose a variable fee.
The fee of the solicitor is very negotiable and could also be a fixed amount wherein a solicitor charges for an hourly rate or a percentage of the total value of the property. GST is always paid while buying a property. A total of 10 percent of the total amount is usually considered as the security deposit while buying a property.
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