OFF THE PLAN
It is has become common to enter into a contract to buy a new property before it has been built. In some cases, the time between entering the Contract and Settlement can be in excess of 2 years!
Life and circumstance can change dramatically over that time so it’s important you understand the Contract and its effect on you now and in the future. To get advice before you enter into a Contract, contact our office and make a time for a no cost consultation with one of our team.
Commonly asked questions about off the plan purchases
Does purchasing an investment property affect my tax?
Any investment will inevitably have an affect on your tax situation and real estate is no different. Before proceeding with any sale or purchase, you should seek the advice of a qualified taxation expert. Things that should be considered include
//Q who is to bear the CGT (if any
//Q how is it to be financed
//Q should a family trust be used
At //Adcock we know stamp duty laws and we work with your Accountant or Financial Advisor to ensure these transactions can be supported by acceptable documentation and that you pay no more state tax than is necessary //Adcocks are not taxation experts or financial advisors; however we are more than willing to discuss with you or your accountant any issues you may have.
How do I know if there's any restrictions on the house I want to buy?
The Statuary Searches provide information to the Agent and your Conveyancer on the past dealing of the land and any current restrictions. If you are unsure of how to interpret these searches, Contact //Adcocks who will be able to advise on them. Remember, it’s critical you obtain your own, independent advice before your Cooling Off expires and you are bound by the Contract.
What are the benefits of being a First Home Buyer?
Currently, First Home Buyers in South Australia have available up to $25,000 of Government Grants available! Click here to see if you qualify for one, two or all three Government Grants, or Contact our office and we’ll help you assess if you qualify.
Is GST payable?
The Contract will stipulate whether there is a GST component included in the sale price. If you are not registered for GST (IE unable to claim back the GST amount), this is not terribly important to you. However, if the entity you are buying in IS registered for GST and CAN claim back GST paid, how the GST is applied is VERY important. There is a provision in Land Contracts for the Vendor to apply the Margin Scheme provided the Purchaser agrees in writing (in the Contract). Typically, people are not aware they have agreed to this when signing the Contract. Contact us to see if GST is applicable to your Contract.
Should I use the Conveyancer the Agent recommends?
The Real Estate Agent acts for the Vendor and is paid by the Vendor. If the Conveyancer or solicitor referred by the Agent obtains most of their business through that Agent they may be more interested in looking after that association than making sure your interest is protected.
Should I use the same Conveyancer as the Vendor?
Generally speaking you shouldn’t use the same Conveyancer as the other party to the transaction. At //Adcocks we prefer to act only for you because any advice we give you will not compromise the advice we would give to the other party. Any possible cost saving can be insignificant where a problem occurs and you may be required to engage another Conveyancer at the last minute resulting in far greater costs.
Should you be unclear on what you wish to do or should you wish to discuss these terms further please contact //Adcocks.
Can I on sell my Contract?
Yes, you can sell your interest in a Contract but the process is fraught with difficulties. //Adcocks are familiar with the issues involved and can prepare the documentation. You should be wary of signing a Contract with the intention of on selling your interest without first speaking to one of our Conveyancers.
What happens if I can’t get Finance?
If your Contract is subject to you obtaining finance, you must consider your position carefully. If you waive the Clause, and make the Contract unconditional you may incur large costs if you cannot settle. Usually if you have done everything possible to obtain the finance, but have failed, your costs to terminate the Contract should be minimal. However, ignoring the clause will not make it go away! //Adcocks will deal direct with your financier and ensure you have sufficient time and advice to make the right decisions.
If you do not have your finance in order and would like assistance, click here.
//Adcocks does not receive a fee or commission for it’s referrals.
It is important that you understand your obligations with regard to all the Contract conditions. //Adcocks can provide the expertise necessary to deal with these issues.
What happens after I sign the contract?
Once you’ve signed the Contract and associated forms, you need to start working towards Settlement. This means, your financier and your Conveyancer will need a copy of the Contract immediately so documentation can be prepared to avoid delay.
If you bring your Contract to our office, we’ll make copies and supply them to the relevant people on your behalf. This must be treated as a matter of urgency as the process from signing to Settlement is typically 4 weeks; and some financiers require all of that time to be ready.
What is a Form 1 (Cooling off Form)?
The Vendor Disclosure Statement, a Form 1, must be issued by the Vendor to the Purchaser upon the sale of all property. Usually the Agent for the Vendor obtains all the required searches and completes the Form 1 and the Vendor is required to sign to confirm its accuracy. Essentially the Form 1 is required to disclose everything which currently effects the title and the land. The disclosures should include any known land contamination, building works done without approval, any Council conditions which continue to apply, whether the Government has indicated that the property is required for future road use, and it should list all mortgages and caveats lodged against the title and whether these are to be paid out at settlement. The Form 1 is a lengthy document and should be read carefully before signing any Contract.
Most Purchasers are entitled to have two clear business days, after the Contract has been signed, to consider whether they want to continue with the purchase. This “Cooling Off” period is not available where a property is purchased at auction and it is not available to companies and under some other circumstances. You shouldn’t sign any Contract unless you have every intention to proceed with the purchase.
Contact us and we’ll have a Conveyancer look at the Form 1 before the auction and before you sign any Contact.
What should I consider before signing a Contract?
The purchase of any property should not be done in isolation to all your other financial arrangements. How will the purchase be financed? What are the tax implications during ownership and upon the eventual sale? Can the property be used as you intend? These are only a few of the many issues which should be addressed before you enter into a contract. At //Adcocks we can walk you through the process.
Signing the Contract?
Ideally you should get our advice before signing a Contract. Remember, while most Real Estate Agents are conscientious, they are the professional employed by the Vendor. //Adcocks can be the professional acting only for you and make sure your interest is foremost. Buying off the plan typically involves copious amounts of paperwork and it’s easy to get overwhelmed by it & just sign… You’ve heard the saying “Buyer Beware”… we’re happy to review & advise you on the Contract before you sign at no charge. Contact us and we’ll have a Conveyancer look at the Contract to identify any issues before you sign and before it’s too late!
Should we hold our property as Joint Tenants or Tenants In Common?
This depends on your personal circumstance and why you bought in the first place. A surviving Joint Tenant, will upon the death of all the other Joint Tenants, become the sole owner of the property (even if their last Will says something different). Typically, couples who purchase a home to live in, choose to be Joint Tenants so that the survivor has a secure home. Joint Tenants must equally share the ownership. Ie half each or one third each with three owners.
Tenants in Common usually are business partners. A Tenant in Common can leave their share in the property to anyone they include in their last Will. Tenants in Common can own different proportions of the property.
Do I still get the First Home Owners Grant if I buy off the plan?
Yes. That is provided you qualify for the grant. Contact //Adcocks and speak to a Conveyancer.