Property Law – Top 5 Frequently Asked Questions

[vc_row][vc_column width=”2/3″][vc_column_text]I have seen a house I want to buy. Do I need finance approval before exchanging contracts?

Yes you do. This is so for a few reasons. First and foremost you need to know that you can actually obtain the necessary funds from your lender in the time required in order to complete the purchase of the house. Secondly it is needed so as to ensure that any conditions attached to the home loan can be complied with before the purchase of the property is completed.

Do I pay GST on the purchase price of a business?

Ordinarily there is no GST payable on the purchase price of a business which is being operated as a “going concern”. This is so as long as all the elements involved in the conduct of the business are being purchased from the vendor. This would include such things as the plant, fittings, business name and the lease from where the business was being conducted. Expert legal advice that can be provided by Brydens Lawyers should be obtained prior to entering into any contract for the purchase of a business.

I am interested in buying a property which is listed for auction shortly. Do I need to have the contract reviewed by my solicitor prior to the auction?

Yes you do. If you are successful at the auction in purchasing the property then you will be required to execute the contract for sale and put down a deposit as provided for in the contract. That is, the terms of the contract will have been fully settled and you will not be able to modify or alter the terms of the contract in any way at that time. These terms will include items such as the time for completion of the purchase, penalties for late completion, disclosures concerning any out buildings on the land, home warranty protection, release of deposits after auction and other such relevant matters. It is imperative that you be aware of your obligations under the contract before you commit to the purchase of the property at the auction.

I have been asked to guarantee a loan. Should we ever guarantee a loan for a friend or relative?

Whether you choose to guarantee a loan taken out by a friend or relative is a matter for you. However, you must be fully aware of what the implications are of doing so. You must be aware that by guaranteeing a loan you are taking on a contingent liability which may also impact upon any future borrowings that you may wish to undertake. Then, and most importantly, you will become liable for the loan in the event that the borrower defaults. This may expose you to recovery proceedings and impact upon your property and income. You should also be aware that if there is indeed default on the part of the borrower the financial institution which lent the money is not obliged to pursue the actual borrower for the monies outstanding. They will determine the path of- least resistance. That is, the person from whom they would have better success in securing recovery of the monies borrowed. If you are the guarantor then that could be you.

I have decided to sell my investment property. Do I need to pay land tax?

This will depend on a number of factors. If the investment property is held in the name of a trust then you could be liable for land tax and should have already lodged an initial return with the Office of State Revenue. Otherwise, if the land value does not exceed the tax-free threshold relevant for land tax, then there will be no land tax payable. Enquiries should be made with your accountant or the Office of State Revenue as to whether there will be any land tax liability before a decision is made to sell an investment property.

For over 40 years Brydens Lawyers has been expertly assisting both vendors and purchasers in connection with the sale or purchase of residential or commercial property.
Brydens Lawyers can help you take away the stress of buying or selling a property, call us today on 1800 848 848 or email info@brydens.com.au.

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