If you’re getting ready to buy a property, we have gathered our
top 10 tips and the most helpful resources for you on how the
process works, common pitfalls, and what to do next.
Once you’re ready to take the plunge, make sure to send us the
contract of sale and section 32 vendor’s statement for a free
apply). We’re committed to making your
purchase easy and stress-free!
Whether it’s your first home or your tenth development site,
buying a property is always a big decision with numerous
Our top 10 tips for navigating the transaction successfully
Look for recent sales of similar properties in the area.
Inspect the property properly, and do your due diligence.
Know your budget, and understand the loan document.
This includes stamp duty, GST, conveyancing, financing
applications, insurance, etc.
Get them to review the contract of sale and vendor’s
statement before you sign.
Consider the practical and tax factors: whether to hold in
your name, in a family trust, or some other structure.
If you are buying an apartment or unit, understand the
owners corporation fees, rules and arrangements.
Make sure you physically and legally can do what you want
to do with the land.
If attending auction, understand the auction rules and
If you make an offer in a private sale, always set a
deadline by which the vendor has to accept your offer.
We have also compiled for you here the best resources on the
web, to give you a smooth ride through the whole process.
Once you decide which area(s) you want to buy in, familiarise
yourself with property value there. We recommend:
Consumer Affairs Victoria also has a helpful guide about property
It is hard to back out of a property sale contract after you’ve
signed it, so make sure you check it properly before you sign!
The mandatory due diligence checklist
given at inspections is a great starting point for questions you
should be asking, to make sure you understand exactly what you
For a property that you plan on living in, seriously consider
getting a professional, independent building inspection done
before making an offer, or bidding.
Consumer Affairs Victoria has further tips on inspecting
In other words, know your budget. You shouldn’t ever make an
offer or a bid at auction unless you know that you can afford
it, and that you will have the funds ready in time for
settlement (which can be two very different things!)
The Fitzroy Legal Service has a good overview of financing
options for property purchases. See also the Australian
government’s MoneySmart website.
If a lender is financing part of your loan, these tend to be
long-term arrangements that will have a significant impact on
your financial life over many years, so read the documents and
fully understand your obligations!
In our experience, Australian banks are increasingly
outsourcing the drafting of these agreements overseas, and there
are often errors in the loan documents that you or your lawyer
need to raise and get fixed.
For the basics of home loans, see the Australian Government’s MoneySmart website.
If you are still unsure about the loan documents, your lawyer
or financial planner should be able to help.
Beyond the purchase price, there are many additional costs:
See the State Revenue Office
website. Stamp duty laws can be complex, so speak to your
lawyer to find out whether you are entitled to any
concessions, reductions or exemptions.
GST is payable on most commercial properties: speak to your
lawyer or accountant to find out whether GST is payable and
whether you can claim it back.
Loan application and other borrowing costs
Speak to your bank or broker.
The land title transfer fee is currently up to $1,366, and
mortgage registration fee is currently $111.
Rates and charges
This includes council rates, land tax, other rates and
utility charges and body corporate fees: most of these will
be disclosed on the section 32 vendor’s statement.
Legal or conveyancing costs
Speak to your lawyer or conveyancer.
Other once-off costs
This includes building inspection fees, moving costs,
utility connection fees, and the cost of any repairs or
renovations that will need to be done before or when you
Other on-going costs
This includes ongoing mortgage repayments, and home and
Get a lawyer or conveyancer involved once you are seriously
considering purchasing a property.
The special conditions on contracts of sale are often
complicated and are drafted to benefit of the vendor.
Off-the-plan contracts can be hundreds of pages long. Make
sure you get advice before signing anything!
Some real estate agents might pressure you into signing an
offer without getting legal advice first, telling you that you
can always use your cooling-off rights.
You should never sign something you don’t really understand,
and hope that you can get out of it later. In any case, cooling
off can cost you thousands of dollars (0.2% of the purchase
price, and at least $100), and those rights can be easily lost
if you are careless. Also, there are no cooling off rights when
you buy at an auction, or within 3 days before or after one. See
Consumer Affairs Victoria for more details.
Some lawyers and conveyancers, including us, offer to review
most contracts of sale and vendor’s disclosure statements for
free. There’s little reason not to take advantage of the offer.
As for retaining a lawyer or a conveyancer, the main difference
is that lawyers can advise and act on broader issues like the
most tax effective ways of making the purchase, how to jointly
buy, and related legal disputes, like recovering damages if a
party cancels the sales contract or fails to settle. See
Consumer Affairs Victoria for more details.
This step is often skipped, when a little thought and planning
could have led to income tax savings each year, or avoiding or
reducing a large stamp duty or capital gains tax liability later
There are a variety of ways for a typical family purchasing a
property to hold it, including:
Each option has different income tax, stamp duty, family law,
estate planning and practical differences for now and in the
future. We strongly recommend at least having a short chat with
your lawyer or accountant about your circumstances, future plans
with the property, and which of these (or other) options would
work best for you.
If you’re buying an apartment, unit or townhouse, there is
likely to be some shared areas or facilities that are managed by
an owners corporation.
The rules in an owners corporation can be quite restrictive and
even intrusive. The fees can be quite high. Make sure they are
acceptable to you.
Consumer Affairs Victoria has a useful checklist of things to
consider when buying these sorts of properties.
If you plan on making any changes to the property, from a minor
renovation to a full rebuild, make sure the land is such that it
is physically possible, and that you are legally allowed to do
The vendor’s statement gives you some idea of restrictions like
the zoning of the property and planning overlays (such as a
heritage overlay) which apply.
Calling the local council is usually a good way to find out
more for smaller projects.
For major changes, you should get advice from an architect,
town planner or other experts.
If you are buying at auction, make sure you know the rules
first. Consumer Affairs Victoria has a good practical guide to how auctions work.
If you have never attended a property auction before, we
recommend attending a few before yours, to get a practical feel
of the process.
Finally, the most important things at an auction are:
Many properties are still sold by private sale in Victoria.
Without much of the urgency and competition of an auction, there
is much greater scope to negotiate price, terms and conditions,
and the settlement date.
We recommend Consumer Affairs Victoria’s guide to private sales to
understand the basics.
Dong 29 January 2015
Growing up in a family of property developers, real estate is
in Lucy’s blood. It’s that experience and her time at her
previous commercial and property law practice that allows Lucy
to cut to the chase, identify the real issues, give you
practical advice alongside the legal, and help you with anything
from the smallest purchase to your next major development
Lucy can also draw from her years of experience at the
Australian Tax Office and Victorian State Revenue Office to help
you structure your property transactions in the most
Call us on +61
3 9041 7733 if you would like to find out more.
The Fitzroy Legal Centre’s law handbook is a good
reference for the legal aspects of a purchasing transaction.
There are many helpful resources on the web to help property
buyers. Always check when they were written, as the law and
industry practices change frequently, and many articles are
You can see our related services for property purchases on our
Kai Legal publications provide general information, and are not
legal advice. These are not complete summaries of the law, and
only touch on select points and scenarios that may be relevant
to our readers.
This fact sheet is current as of 29 January 2015.
© Kai Legal 2015
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+61 3 9015 6430
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