The duties of solicitors acting for both buyers and sellers are listed. Buyers must pay fees for searches, registration at Land Registry, caveats, transfers as well as Stamp Duty and solicitors’ costs. The Business Licensing Authority (BLA) handles disputes between agents and sellers or buyers. Arbitration is available for disputes but this course can be costly. Mediation on contracts disputes is less costly and the Law Institute of Victoria can recommend a mediator.
Foreign Investment Review Board
Foreign ownership of land in Australia is a prominent issue and sales of residential properties in Australia are now more closely monitored than in the past.
The Australian Government’s Foreign Investment Review Board (FIRB) decides whether a foreign buyer is eligible to acquire land in Australia.
In general, a foreign buyer of residential property (including vacant land) in Australia must obtain the FIRB’s approval of the purchase before entering into a contract of sale. The FIRB’s powers to enforce this requirement are extensive (e.g. the FIRB can order a sale to be reversed). The buyer may also have to pay damages to the vendor for breach of contract if a sale is found to be void because the buyer failed to obtain the FIRB’s approval.
The minimum cost of submitting an application to the FIRB is $5,000.
For more information about the FIRB, see www.firb.gov.au.
The state of Victoria has an interest via the Duties Act 2000 (Vic). If a buyer of property in Victoria is not one of the following:
• an Australian citizen;
• the holder of a permanent visa;
• a New Zealand citizen holding a special category visa (sub-class 444),
then the SRO assesses the duty payable on the transfer and adds 7 per cent of the land transfer duty on the purchase price of the property. This rate applies to contracts entered into on or after 1 July 2016. Contracts entered into on or after 1 July 2015, but before 1 July 2016, incur an additional land transfer duty of 3 per cent. This applies to all transactions entered into on or after 1 July 2015 where the buyer is a foreign person at the time of the transaction (usually at settlement).
A foreign buyer can be a natural person, a corporation, or a corporation acting as a trustee.