1. Contract for Sale
Did you know it is illegal to market a property for sale in NSW without a valid contract for sale? This means a document with 7-8 mandatory annexures, such as title searches, plans, sewer diagrams and zoning certificates. It normally takes 4-5 days for a solicitor / conveyancer to prepare a contract for sale, so it is best to appoint them early so there’s no delay to the campaign.
2. You MAY need to make other disclosures in the contract
Even though the general principle in NSW is “buyer beware” there are still a handful of things that vendors may have to disclose to buyers in the contract. One of the most common one is unapproved works. If your property has structures on it which have not been approved by Council and the buyer only finds out about it after signing contracts, your buyer may be able to pull out of the contract.
3. If you have a pool, you need a special certificate when marketing your property
In addition to all the other mandatory disclosures, if you have a pool on your property, you need to include a compliance or non-compliance safety certificate for the pool with your property. There’s no problem with selling a pool with a non-compliance certificate and you will not need to rectify any non-compliance issues before settlement – however your purchaser will have to, within 90 days of settlement.
4. Your buyer MAY get a cooling off period
In NSW, purchasers who sign a contract for residential property automatically get a 5 business day period unless theproperty is sold at auction. If not sold at auction, it is possible to obtain aspecial certificate from the purchaser called a “66W Certificate” which waivesthe purchaser’s cooling off period. If this is something you want, you should make that clear to your agent at the start of the campaign.
5. The standard ‘settlement period’ is 42 days but you and the buyer may agree longer / shorter
The period between when contracts are signed and deposits are paid to when the final transfer of property and monies takesplace is called the ‘settlement period’. Normally that period is 42 days, whichis considered the average amount of time the buyer needs to arrange theirfinance and for the vendor to arrange to move out and discharge their mortgage.However, you can stipulate an earlier or later settlement date. The negotiatedrange is normally between 28 days – 90 days (and anything outside that rangemay come with settlement risks)
6. You need to pay off your mortgage and other property-linked debts at settlement
If you’ve got a mortgage against the property,that needs to be released at settlement. You don’t have to repay your loan prior to settlement and the vast majority of vendors use part of the sale proceeds simultaneously at settlement to do this, via an electronic settlement platform called PEXA. You also need to clear any other property-linked debts like accrued land tax, council rates and water rates. Your solicitor / conveyancerwill arrange all of this for you.
7. Taxation consideration
You normally don’t need to pay GST on the sale of your property unless the property is brand new and you’re a professional developer. However, you may be liable to pay Capital Gains Tax if the property is not your primary place of residence. In fact, the starting point is that youhave to withhold 12.5% of the purchase price for CGT payment unless you can provide an ATO Withholding Certificate. Again, your solicitor can arrange thisfor you easily but it might be worth consulting your accountant as well.
It is important to be well-informed about potential legal issues before selling your property. The expert team at Dott & Crossitt Conveyancers + Solicitors can guide you through the process and you help you navigate these legal complexities toensure a smooth property sale experience.