If you are new to Victoria conveyancing, you might already be bombarded and overwhelmed by all the terms and rules that you have to know. While you can learn most of it on the fly, having a good basic understanding can help you in the long run. Our experts at Red Door Conveyancing team are here to explain some common terms and definitions you will encounter!
What is a Contract of Sale? | Victoria Conveyancing
Your contract of sale will be prepared by the vendor’s conveyancer before the property is put up for sale. Then, the agent will provide the contract to prospective buyers, which will include all the property information, plans for the land and certificates.
Conveyancer and Conveyancing
Conveyancing is the process of transferring ownership of a legal title of land when buying or selling properties, and a conveyancer is a person qualified in the preparation, consultation and execution of settlement. Conveyancers must be licensed.
Cooling Off Period
In Victoria, there is a cooling-off period of three clear business days applied to private sales of residential and small rural property sales. A buyer may choose not to proceed with the sale within this period. You would need to give a written notice to the seller or the seller’s agent. You will be entitled to a full refund of any money paid, less $100 or 0.2 per cent of the purchase price, whichever is greater.
This does not apply if:
- The property was purchased at a public auction or within three clear business days before or after a public auction
- The property is used mainly for industrial or commercial purposes
- The property is more than 20 hectares and used mainly for farming
- You previously signed a contract for the same property with the same terms
- The buyer is an estate agent or corporate body.
What are Disbursements?
Any amounts payable to third parties, such as council searches and title searches for the properties, will be termed as disbursements.
What is the First Home Owners Grant in Victoria Conveyancing?
The government sometimes offers a grant to assist people buying their first homes. This is set up by the State Revenue Office which requires you to meet a few criteria for eligibility.
What is a Holding Deposit?
Holding deposit is a common term involved in Victoria conveyancing. It is the payment made by the purchaser to the agent before the contract is signed. Agents may ask for a holding deposit to show seriousness about buying the property. However, it does not guarantee an exchange of contracts and the seller can sell the property to somebody else.
What is Stamp Duty?
Stamp Duty is the tax the state government charges when you purchase or are given land. As a potential homeowner, you need to know how much Stamp Duty you need to pay.
The State Revenue Office has set out the following Stamp Duty rates for properties purchased after 01 July 2021.
- Dutiable value range and its rates
- $0 – $25,000 → 1.4% of the dutiable value of the property
- > $25,000 – $130,000 → $350 plus 2.4% of the dutiable value in excess of $25,000
- > $130,000 – $960,000 → $2870 plus 6% of the dutiable value in excess of $130,000
- >$960,000 – $2,000,000 → 5.5% of the dutiable value
- More than $2,000,000 → $110,000 plus 6.5% of the dutiable value in excess of $2,000,000
Settlement and Settlement Adjustments
Settlement is the date when the agreement is finalised, the money is paid, and the keys are released to the purchaser. The buyer becomes the registered owner of the property on the settlement date. As a part of the conveyancing process, there might be settlement adjustments. This includes adjusting council rates, land tax, water rates, and other property charges so that the seller pays the debts before the settlement date and the buyer pays them after.
Buy Your Dream Home | Victoria Conveyancing
If you’ve started to get familiar with these terms, you are already one step closer to searching and finding your dream home. If you still have questions, feel free to contact our friendly conveyancing professionals at Red Door Conveyancing and we will be here to help you. Victoria Conveyancing