Absolutely Settlements

Signing the Contract is the first stage of selling your property.  

If you are selling a property privately (ie. without the involvement of a real estate agent), I can assist you with preparation of the Offer and Acceptance Contract including drafting of any special conditions which you may want included in the Contract (eg. the Contract is subject to the existing tenant remaining in the property).

The fully signed Contract (whether it has been prepared by me or by a real estate agent) should then be forwarded to Absolutely Settlements so that I can commence preparation of your settlement documentation.

If your property is encumbered by a mortgage, you must complete the Discharge of Mortgage Authority form. I will often be able to provide you with the required Discharge Authority form, however in some instances (depending on the bank involved) you will be required to contact your bank personally. The completed Discharge Authority form should then be returned to me, so that we can submit this to your bank on your behalf. I will also contact your bank and provide them with a copy of the Settlement Statement (showing the balance due to you at settlement) and a copy of your Certificate of Title.  It is important to note that your bank will not complete any discharge documentation until they have your written consent to proceed. If your mortgage is secured against a property, other than the property you are selling, then it is likely that your bank will require additional time to prepare for settlement because they may need to arrange valuations for any properties that you are retaining. Please advise me if your loan is attached to additional property.

if your property is not encumbered by a mortgage, then it is likely that you may hold the Certificate of Title (provided that a duplicate Certificate of Title has been issued by Landgate). Landgate hold the original Certificate of Title. Property owners can elect to have a duplicate copy issued. I will advise you if there is a duplicate Certificate of Title in existence. If there is a duplicate Certificate of Title, you should locate it as soon as you decide to put your property on the market to ensure that it has not been lost. If you are unsure whether there is a duplicate of your Certificate of Title, simply contact me so that I can advise you whether a duplicate Certificate of Title exists.  Lost Certificates of Title can delay settlement, can be costly to replace and can it take several weeks to obtain a replacement.  If you cannot locate your duplicate Certificate of Title, I ask that you contact me immediately so that we can discuss applying for a new Certificate of Title. If you are sending the Certificate of Title to my office by mail, I recommend that you send it via registered mail and that you keep a note of the registered mail article number.

Where there is a mortgage on your property, the first payment from the settlement proceeds will be made to your bank to clear your mortgage. Any surplus funds can be paid as directed by you. You are able to collect funds from my office, I can bank these funds for you (and provide the deposit receipt as confirmation that the deposit has been completed) or in some instances, I can deliver funds to you. Your funds directions (where applicable) must be provided to my office no later than 72 hours prior to settlement, so that I can ensure that I order your cheques in sufficient time for settlement.

If there are caveats, sale and seizure orders or other encumbrances on the Certificate of Title, I will arrange for these encumbrances to be removed. There may be additional fees for attendance of removal, including search fees, registration fees, solicitor’s fees as well as my fees. It is prudent to notify me of any encumbrances, so that I can ensure that they are included in any quote that I provide to you and that I can arrange removal as soon as possible.

Due to successful and attempted property frauds, Landgate now requires all sellers and buyers be identified prior to the property being transferred. In most instances, I visit with my clients to have the Transfer of Land signed.  I can conduct verification of your identity at this time, at no further cost to you.  Alternatively you can complete your VOI by :

• presenting 100 points of identity and a VOI form (that I provide to you) at a participating Australia Post outlet
• making an appointment to complete your VOI at my office
• contacting ZipID online to make an appointment with a representative from ZipID to visit you at a time, date and venue that is mutually convenient.

If you believe that you will have difficulty producing 100 points of identity, I ask that you contact your conveyancer as soon as possible.

Sellers are liable for rates, levies, land tax and water consumption (where applicable) up to and including the day of settlement. These accounts will be adjusted on a pro-rata basis and a Settlement Statement, showing the adjustment of these accounts will be issued to you in the lead up to settlement.   Please notify your conveyancer if you attend to payment of any of these accounts before settlement.

Legislation requires that all residential properties have at least one hard wired smoke alarm and two residual current devices installed before the property is transferred. It is the seller’s responsibility to ensure that the property meets the current legislative requirements. Failure to do so may render a seller liable for a substantial fine. For further information about your requirements please visit the Department of Commerce website or contact our office.

• For hard wired smoke alarms go to DFES Hard Wired Smoke Alarms
• For residual current devices go to DMIRS Residual Current Device Factsheet

If the property that you are selling has a tenant, then it is important that this is noted on the Offer and Acceptance Contract.  Failure to note this information on the Contract means that the buyer is entitled to vacant possession of the property at settlement (ie you have to get the tenant to vacate).  This can obviously be a costly exercise.

It is also important that you advise me of the details of your property manager so that I can ensure that you fulfill your obligations under the Joint Form of General Conditions. If you manage the property yourself, then you must also notify me so that I can make the necessary adjustment of rent and bond.

Sellers are required to provide the buyer with a copy of the Lease, Property Condition Report and notification to the tenant that the property has been sold. Please ensure that you forward these documents to me prior to settlement.

If you reside in the property as your primary place of residence, then you have until midday the day following settlement to provide your keys to the real estate agent. Please ensure that you surrender all access devices including keys to main doors, security doors, window locks and garage remotes. For all other improved properties (other than your primary place of residence) you must surrender your keys and other access devices immediately following settlement.

The Transfer of Land is usually prepared by the buyer’s settlement agent and signed by the buyer first. In most instances, I visit with my sellers to have this document signed (and complete verification of identity).  If I am unable to visit with you to sign the Transfer, then I will post it to you (with a reply paid envelope included for you to return this document to me). This document must be signed by you, witnessed by an adult person who is not a party to the transaction and returned to my office PRIOR to settlement. If you are going away before settlement you must advise me so that I can make alternate arrangements for you to sign the Transfer of Land prior to your departure.

I attend to changes of ownership in respect to your council rates, water rates, strata levies and lax tax accounts, where applicable. You will be required to arrange changes to the accounts for gas, electricity and telephone services.  Links are available to these service providers by clicking here Useful Links

When you move house, it is important to arrange forwarding of your mail where applicable. This can be done through Australia Post for a minimal fee and for varying periods of time. I recommend that you have the change in place for a minimum of one year so that you can ensure that any accounts that you receive on an annual basis are forwarded to you. You can arrange this by visiting an Australia Post outlet or their website at Australia Post Mail Re-direct Service.

Australia Post gives you the option of amending your address with various organisations when completing your “mail forwarding application”, however there are a number of parties that you should notify, including but not limited to:

• Your Doctor
• Your Dentist
• Your Optician
• Medicare
• Your newspaper delivery person
• Centrelink
• Australian Taxation Office
• Licensing Division (for driver’s and marine licences)
• Electoral Commission
• Your employer
• Your insurers
• Your bank
• Your superannuation company
• RAC or other roadside assistance company
• Your mobile phone service provider
• Health insurance provider
• Schools
• Your mechanic
• Your pet’s veterinarian
• Your library
• Your sporting clubs
• Social clubs
• Committees

From the 1st July 2017, the Australian Taxation Office (ATO) required all sellers who sell a property for more than $750,000, whether it is vacant land, commercial property or residential property, to obtain a Clearance Certificate for the purposes of Capital Gains Withholding Tax.  This means that every person noted on the Certificate of Title must provide the Clearance Certificate.  Executors acting on behalf of a deceased person must obtain the Clearance Certificate in their own name, rather than in the name of the deceased proprietor.  Applications for the Clearance Certificate may be made online at Australian Taxation Office Clearance Certificate Application.   Clearance Certificates are valid for 12 months, so it may be prudent to complete the application at the time that the property is listed for sale.  The ATO has advised that the turnaround time for Clearance Certificates is 14 to 28 days.

The application should only take 10 minutes or so to complete.  The ATO will email or post the Clearance Certificate to you and you should then provide this to your nominated conveyancer prior to settlement.  This Clearance Certificate must be provided to the buyer as part of the settlement process.

Failure to obtain a Clearance Certificate, from the ATO, prior to settlement will result in the settlement agent withholding 12.5% of the purchase price at settlement. This amount is then paid to the ATO.  As an example, a seller who fails to provide a Clearance Certificate on a $750000 sale will be liable to pay Capital Gains Withholding Tax at settlement of $93750.

From the 1^st July 2018, the Australian Taxation Office (ATO) required all suppliers (sellers) of all new residential premises (buildings that are less than 5 years old) to notify the buyer, in writing, whether the buyer is required to withhold GST from the seller and remit it to the ATO following settlement.

Most often, this written notification forms part of the Contract and is a matter of simply ticking a box. 

GST will only apply if the seller is registered or required to be registered for GST and the property is new residential premises or potential vacant land. 

If you are uncertain of your GST status, you should contact your accountant or the ATO.

If GST is withheld, the amount withheld depends on whether the margin scheme or full GST applies.  If the margin scheme applies, then the GST is 7% of the purchase price.  If full GST applies, then the GST withheld with be 1/11^th of the purchase price.

If GST Withholding Tax applies, then the buyer’s settlement agent submits a Form 1 to the ATO prior to settlement and obtains a Payment Reference Number (PRN).  This number is unique to your transaction and ensures that any payments made are credited to you.  Certain information is required from you to complete the Form 1. 

The GST is withheld from you and credited to the buyer’s settlement agent for payment following settlement.  The buyer’s settlement agent submits a Form 2 to the ATO following settlement.  The Form 2 notifies the ATO that settlement has been completed.

Confirmation of payment of the GST will be provided to you once it has been submitted to the ATO.

For further information, visit the ATO GST Withholding Tax page.