who can purchase a property in victoria?
Anyone can purchase a Real estate property in Victoria, however, should you be a Foreign Purchaser, and you will be subjected to a Foreign Investment Review Board (‘FIRB’) Approval. Foreign Purchasers must comply with the condition(s) (if any) set out in his/her FIRB Approval.
manner of holding
a) Sole Proprietors – The individual is the only owner or proprietors of this property. Should you as a sole proprietor wish to transfer part of your interest to another party, it may occur in one of the following:
i) Tenants in common
ii) Joint tenants
Where there are multiple purchasers of a property, the following forms of ownership are as follows:
a) Tenants in common – Upon the death of one of the proprietors, the deceased person’s proportionate interest in the property will become part of the deceased’s estate.
b) Joint tenants OR proprietors – Upon the death of one of the proprietors, the deceased person’s share of the property automatically be reverted to the remaining joint owner(s) irrespective of the terms of the deceased’s will.
who will need this firb approval
Any person(s) who is/are not an Australian Citizen, PR or an eligible New Zealand citizen.
what is contained in a standard contract of sale and vendor’s statement?
You should ensure that you are fully informed of all terms and conditions set out in the contract of sale. Effort should be placed into scrutinising each and every clause to ensure that you do not lose out.
a) Documents and information with regards to the land:
- Statement of title – this document contains important and crucial information about the land, including volume and folio numbers, activities within the last 125 days, the current owners’ name and address, if there is a mortgage, the mortgage information will be available and other encumbrances on the land.
- Copy of plan: The copy of plan shows you the size and location of the land. If there is an easement over the land, the plan will also show you where the easement is located.
- Water information statement: it displays the current water rates and the estimated daily usage. Alternatively, a recent bill from the current occupant is able to be provided to upon request.
- Land tax clearance certificate: if the property is not for residential purpose, the land is usually subject to the payment of land tax. The land tax certificate is able to provide an estimate of what is current year’s land tax payable.
- Land information certificate – This statement issued by the relevant local city council. It provides details of council rate charges and any outstanding amounts that are payable to the council for the relevant year. Alternatively, a recent bill from the current occupant is able to be provided to upon request.
- Owners Corporation Certificate – if applicable.
Apartments and townhouses usually have Owners Corporation. The details can be provided via the most recent bill of Owners Corporation or an Owners corporation certificate, which contains the rules of the O.C. and cost.
b) Planning information from the government
It states whether you can re-develop this land into either a residential property or a commercial property. c) Building permit
If the house was built within the last 7 years, the vendor must provide a copy of the building permit, together with the building warranty and insurance must also be provided.
d) Other side agreements
what are the asociated fees and expenses for real estate?
The associated fees for a real estate/land includes council rate, water rate, land tax and Owners Corporation fees (if applicable).
Owners Corporation fee depends on the number of levels, facilities and services provided by the Owners Corporation management company in the building. Council rates normally range from $1500 to $3000, water rates will be pro-rated in accordance with the date of settlement and the billing date, usage of the relevant utilities will be paid for by the current tenant on the property. Other amount will be subjected to the agreement.
types of properties
i) Off-the-plan refers to a sale based on the floor plan of the property. Construction of the property may or may not have commenced, however the property is yet to be completed.
ii) New Dwelling is where the construction of the property that is completed, however the property has never been sold or occupied before.
iii) Second-hand dwelling/Established homes
What is fee simple
Fee simple is a form of interest in land. Land owned in fee simple means the owner has an absolute right to the land, without any limitations or conditions. This interest in land can be passed on and there is no limitation of time.
what is the foreign investment review board aproval firb approval?
Anyone who is not an Australian citizen, PR or an eligible New Zealand Citizen, will be considered a foreigner. All foreigners must apply for an FIRB approval before they are able to purchase any property in Victoria. Ineligible foreigners who have purchased a property without an FIRB approval will at the risk of receiving a high penalty.
According to the policy of Australian government, all foreign investment on residential real estate in Australia should increase the housing supply in Australia. All applications should be considered in accordance with this principle. The following types of properties have the following requirements should a foreigner purchase it:
a) Established homes/Second-hand dwelling Foreigner cannot purchase an established home. Unless, for the
i) The established home has been purchased for re-development purposes. In between the start date of the construction process and the settlement date, no part of this property is allowed to be rented out; or
ii) The foreign purchaser is holding a temporary resident visa for more than 1 year (such as a student visa, working visa etc. Please note, a tourist visa is not a temporary resident visa). However, the purchaser must use this property as their primary place of residence.
b) New dwelling and off-the-plan Upon obtaining the FIRB Approval, all foreigners are eligible to purchase these type of properties. Normally, the approval is un-conditional.
c) Vacant land Upon obtaining the FIRB Approval, all foreigners can purchase this type of property. This approval will be subject to a condition where the construction process must commence within 24 months.
what do you need to do before signing the contract?
VSTAR strongly recommends that you consult either a solicitor or licenced conveyancer to review your contract before signing. This will ensure that all important clauses are brought to your attention and explained to you, including all the potential risks in which you may be undertaking, therefore allowing you to make an informed decision.
what do you need to do after signing the contract?
After the contract of sale has been signed, you will need to pay the outstanding balance of the 10% deposit into the trust account of vendor solicitor/real estate agent. The deposit money must be paid into a trust account, in accordance with the laws of Victoria. You should be aware if the vendor’s solicitor or real estate agent requests that you make the cheque payable to the vendor, instead of their trust account. A copy of the fully executed contract of sale will then be provided to you for the sale process to continue.
what is settlement date?
Settlement date is the date of settlement of this property. If the purchaser needs to involve an incoming mortgagee, please select a settlement date that will allow you to have sufficient time to arrange your mortgage.
Settlement date can be 30 days, 60 days or 90 days from the date of sale. The application for a mortgage may between 3 to 4 weeks. It is therefore advisable for a purchaser to elect at least 60 days to allow sufficient time to arrange for their mortgage and finances.
what is the stamp duty
When you buy Victorian land, which may include buildings, you are liable to pay land transfer duty (otherwise known as stamp duty). The duty payable is based on the market value of the property or the purchase price, whichever is greater.
what is the difference between total amount and the funds available and why there is a difference?
Total loan amount an individual can have depends on the value of the property, their credit rating and income. After an overall valuation, the bank will then provide the loan amount in which they are willing to loan to you.