When you plan to sell vacant land in any Australian jurisdiction, it is essential that you become conversant with the laws that govern the sale of vacant land in your city/town. There are many legal covenants when it comes to selling vacant land in Australia and most sellers are unlikely to know their duties and responsibilities in this regard. Therefore, the best way to ensure a hassle-free transaction is to find a competent property lawyer who can give you all the property legal advice necessary.
Documentation is a critical part of selling your vacant land in Australia. There are specific guidelines on how the sale deed is constructed and the information it should carry. Your ownership and the manner in which you became the owner will need to be established through registered documents. This is the first prerequisite to sell vacant land in Australia and the buyer will always need a clean and marketable title to the property when the sale transaction is completed.
Commitments and promises
All commitments and promises should be reduced in writing and the legal language structure is different from commercial or personal communication. A property lawyer can be a huge help to wade through this and ensure that your documentation mirrors all your promises and commitments in writing and with the appropriate language structure.
Understanding GST and its implications
When you sell vacant land in Australia, the transaction attracts GST. Do remember that vacant land delineated for residential use is not exempt from GST while a residential premise is exempt from GST. A property lawyer can examine your documents and provide appropriate advice in this regard. Notice also that as a seller of vacant land, you cannot recover the GST component from the purchaser. The purchaser may also demand a tax invoice which will help him claim a GST credit for the amount you have paid to the tax office. However, when your sale contract is drawn up, you are at liberty to seek an additional 10% above the agreed sale price to offset your GST liability. With appropriate property legal advice, you may also be able to apply the margin scheme to reduce the incidence of GST.
Measurements and physical inspection
Purchasers will in all likelihood demand physical inspection and measurement of the vacant land you seek to sell. This measure is helpful for the seller and purchaser and by recording the measurements as well as physical inspection details, potential future conflicts can be avoided.
When you are selling land in growth areas, chances are that the law may stipulate a contribution towards infrastructural growth. Your property lawyer can guide you on how you deal with while creating your sale contract and who is responsible to make this contribution. If the purchaser is required to make this contribution, it will likely impact the sale price.
If the vacant land you are selling is part of a subdivision with a common property like driveways, grounds, lifts, etc, you may need to elaborate the conditions laid down by the owners’ corporation for use of common facilities in your contract. The rules may also include certain payments to the corporation and have certain restrictions like with pet ownership. Speak to your property lawyer on framing this part of the contract.
If you have any encumbrances on the vacant land, you would be required to clear all of them and present your vacant land with a freehold title. However, there can be exceptions when the purchaser also agrees to take on the existing encumbrances without your having to clear them before executing the sale deed.
Zoning and town planning
The planning scheme applies to all vacant lands in Australia and the scheme is run by local councils. It is a good idea to highlight the zoning regulations that apply to the land you are selling and how it can impact future use of vacant land in the hands of the purchaser. If specific laws on retaining walls or buildings are in place, incorporate them in your contract so that the purchaser is aware of those laws and can go through the approval process for building construction with ease.
If the vacant land is being sold to a foreign buyer, the buyer will have to obtain a FIRB clearance before you can execute the sale contract with him.
In most situations, legal language and legal provisions are not common knowledge irrespective of your level of education. Therefore, it is always desirable to work with a legal professional so that your documentation is correct and does not spring surprises for you or the purchaser at any point in time.