Welcome to the 10th and final installment in our Buy Property in Australia from Overseas Series. This week will wrap up the end of the process of buying property in Australia. (To start at the beginning of the series, read Part 1: Real Estate Industry Professionals Foreign Investors Should Deal With).
The day of your closing, often called settlement day in Australia, is the day that you go from being the prospective owner of the property to the actual owner of the property. It’s an exciting day for everyone involved. You’re getting your dream home or piece of land, the seller is getting to profit from the sale, and all of the business parties involved are getting their profits, too. The day of the closing runs smoothly for most buyers and sellers because all of the paperwork and background research is done. All that’s left is to finalise the documents, sign a few pieces of paper, and pay any fees.
Fees Due at the Closing
You know that you need to pay the final deposit on the property, but you will also need to pay duty fees. The transfer stamp duty is a government tax based on the value of the home, and this will be the largest tax you pay at settlement. You will also need to pay any solicitor and bank fees. The mortgage stamp duty is a state tax, and it’s based on the amount you’ve borrowed from the lender. All of these fees are included in the paperwork, but a solicitor may review the fees with you before finalising the settlement.
What Happens on Settlement Day?
Settlement day occurs anywhere from 30-90 days after the initial contracts are signed. The date of settlement is listed in the contracts, so you and the seller will have plenty of time to prepare for the closing of the contracts. Usually, only the agents or solicitors are present on the day of settlement, so there’s no need to stress that you must attend the settlement. On the day of the settlement, the final payment will be released to the seller from the trust that it’s been in through the agent.
If you need to reimburse the seller for any fees paid up to that point, it will be done at settlement. An example of a reimbursement fee may be if the seller paid the water rate for that month, but you will be owning the property for half of the month. You will reimburse the seller for any monies paid out for utilities or the council.
After the final amount is paid to the seller, the title transfer will happen. This can take a while to go through, so you may or may not get access to the property immediately following the closing. Most settlements transfer the keys on the same day, but it can take a few hours for everything to become finalised and approved. This won’t be a problem if you’re purchasing the property while overseas, but if you make a special trip to Australia just to have access to your new property, you may find yourself waiting around until the agent can release the property to you. Once the keys or title are in your hands, the property is yours.
Thanks for reading this series. Hopefully it has helped you with your quest of buying property in Australia. I hope you’ll subscribe to this blog to be kept informed of other news, info, and tips and discussions about Australian real estate.