Conveyancing across Australia: Mind that state line

Conveyancing in Australia is governed by a patchwork of state-specific legislation, regulatory frameworks, and practices. While the Torrens Title system dominates nationwide, each state (or jurisdiction) introduces enough of its own nuances to keep any legal practitioner on their toes.

This article explores key differences and common principles to be aware of when managing property transactions in different parts of the country.

Title systems and contract forms

Although Torrens Title is the general rule, Crown Leaseholds require special attention in some states. Clauses within standard form contracts that can vary between states include those relating to deposits, settlement, and risk.

Contract preparation

In most states, contracts are prepared by the vendor’s legal representatives. Queensland and West Australia, however, allow real estate agents to draft contracts. Unsurprisingly, this can lead to variability in quality and legal robustness. Caveat emptor – and caveat venditor, too.

Disclosure requirements

Different states have different stances towards disclosure (which is essential for informing buyers, managing risks, and ensuring legal compliance). NSW and Victoria have strict statutory disclosure rules, while Queensland and West Australia rely more on contractual terms. It’s important to be aware of requirements in each state, as failure to disclose can result in serious legal consequences, including the right to cancel the deal and claims for misrepresentation.

Cooling-off periods

Cooling-off periods, which apply primarily to residential properties, can vary widely:

• Every state except West Australia and Tasmania has a statutory cooling-off period.

• No state provides for a cooling-off period with commercial properties. If you want one, the terms must be negotiated.

• NSW is unique in allowing a waiving of the cooling-off period via a prescribed form (s66W).

Insurance and risk transfer

Who carries the risk between the signing of the sale agreement and settlement date? You won’t be surprised to learn that that can also depend on which state you’re talking about. 

• In NSW, Victoria, SA, Tasmania, ACT and Northern Territory risk remains with the vendor up until settlement date.

• Queensland delays things by a day, having risk pass to the purchaser the day after contract date.

• Western Australia allows some flexibility in this area, but risk most often passes to the purchaser upon settlement or possession.

These differences are particularly important when considering insurance prior to settlement. Whoever carries the risk at any given time, must also have appropriate insurance in place. 

Chop, chop

Queensland is a stickler for agreed deadlines; failure to meet any written into the contract can result in action. Other states take a more lenient approach, requiring reasonable notice to enforce time-based obligations.

Ensure the contracts you create in each state clearly express an intent to make time essential if that’s what you intend.

Stamp Duty and Land Tax

Stamp duty (sometimes called transfer duty or conveyance duty) rules differ significantly among states:

• NSW: Stamp duty is due within three months. Off-the-plan purchases allow a 15-month deferral.

• Victoria: Payable within 30 days of settlement.

• Queensland: Concessions are available for home buyers.

• ACT: Within 14 days of the title to the property being registered at Access Canberra.

• Stamp duty regulations in the remaining states also vary and can be subject to foreign ownership surcharges.

Similarly, land tax varies, with some states imposing additional levies on foreign owners. 

Some Commonwealth requirements are uniform across Australia. For example, the Foreign resident capital gains tax withholding regime applies to a vendor that is a foreign resident– so a vendor needs to obtain the relevant clearance certificate. The Commonwealth also imposes uniform taxes like GST and CGT, and recent federal changes include a temporary ban on foreign purchases of established dwellings. There is also the FIRB regime that applies to property transactions generally.

eConveyancing: the digital shift

The traditional paper-based process of buying and selling property is rapidly giving way to digital technology, which is faster, more convenient for both parties, and secure.

In NSW, Victoria, SA and WA, eConveyancing is now mandatory. Queensland, Tasmania and ACT still allow parties a paper or electronic approach, while Northern Territory has yet to allow anything but the traditional approach (although it is transitioning to eConveyancing).

The main issue arises when handling cross-jurisdictional transactions, especially if one requires wet ink signatures and the other requires an electronic approach.

Due diligence: always important, regardless of jurisdiction

One constant across jurisdictions is the need to carry out proper due diligence, whether buying or selling. That includes:

• Confirming the vendor’s capacity to pay and solvency.

• Investigating the property title, encumbrances, and condition.

• Assessing any zoning, heritage, or environmental issues that may come into play.

• Understanding the tax implications involved in buying or selling, including stamp duty, land tax, CGT and GST.

Conclusion

The bottom line is that it would be an egregious error to suppose conveyancing laws that apply in one state will transpose easily to another – even one next door. The differences, while sometimes subtle, are sufficiently numerous to create a potential minefield for the unwary. Familiarising yourself with conveyancing laws in each jurisdiction will ensure smooth transactions.

Authors: Andrew Grima, Sara Duong and Chester Hong