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Before property settlement
Checking property measurements
Your legal practitioner or conveyancer will send you a plan of the land so you can check all measurements and boundaries correspond with the Certificate of Title.
Confirm with your legal practitioner or conveyancer if the measurements and boundaries are correct or alert them to any discrepancies.
If you use a conveyancer, make sure that they are licensed. You can find a licensed conveyancer, or check a conveyancer’s licence details, by searching the Public register of conveyancers online.
Lender’s property valuation
Your lender will usually arrange for a valuation of the property to ensure the price you paid corresponds with its approximate market value. This may happen before you sign the contract of sale, if the property is not being sold at auction.
Even though the seller’s insurance may cover the property up to the date of settlement, your lender will recommend you take out building insurance effective from the date the seller signs the contract. This is to safeguard their interest in the property, as well as your own.
Pre-settlement property inspection
Buyers are entitled to inspect at any reasonable time during the week before settlement. You can contact the agent to arrange this inspection.
The contract of sale requires the seller to hand over the property in the same condition as when it was sold. If, during the final pre-settlement inspection, you find that something is damaged or not working as it was on the day the property was sold, you can request a repair.
Make a list of the things you need to check from the notes you made about the property during your pre-purchase inspections. Check all the items listed in the contract are there and in the right condition.
At the time of property settlement
About property settlement
The seller sets the date of settlement in the contract of sale. The settlement period is usually 30 to 90 days.
Settlement is the date when the buyer:
- pays the balance of the purchase price to the seller
- receives the property title and become the registered owner
- takes possession of the property, unless otherwise arranged.
This is an official process usually conducted between legal and financial representatives of the buyer and seller.
At settlement, all outgoings such as rates and other charges are adjusted between the seller and the buyer.
The seller is responsible for rates up to and including the day of settlement. The buyer is responsible from the day after settlement.
Taking possession of the property
Once settlement is completed, the buyer can collect the keys from the agent and take possession of the property.
Land transfer duty (formerly stamp duty)
The buyer is responsible for paying land transfer duty (formerly known as stamp duty) on the sale.
Duty is calculated as a percentage of the purchase price or the market value of the property, whichever is greater. Duty applies to the GST-inclusive price of a new property.
It is usually paid at settlement but the buyer has up to three months after settlement to pay. The buyer cannot receive title to a property until they have paid the duty.
There are generally two duty rates:
- a general rate that applies to all types of property including residential, commercial, industrial and rural
- a lower rate for a property that will be the buyer’s principal residence.
For more information, visit the State Revenue Office Victoria website.
Transfer of land
This document transfers ownership of the land from the seller to the buyer.
If two or more people are buying the property together, the land transfer document sets out how they will hold the property; jointly or as tenants in common.
- Jointly-held property: If one person dies, ownership of the property automatically transfers to the survivor(s).
- Tenants in common: Tenants in common effectively hold shares (equally or otherwise) in the property and each has the right to dispose of their interest as they see fit.
The transfer of land is usually lodged with the Land Registration Services office by the buyer’s legal practitioner, conveyancer or lender.
Building problems after settlement
If you find problems with the building work in your new home, repair work may be covered by the:
- legal warranties that set the standard of workmanship for all domestic building work
- builder’s domestic building insurance.
Legal warranties apply to building work for 10 years, even if the property sells several times. The warranties cover new houses, extensions, renovations and repairs.
To use the warranties, contact the builder to discuss the problem. You can find out the builder’s details by contacting your local council.
If you believe the problem is covered by the warranties but the builder is going to charge for the repairs, you will need to consider legal action.
In some situations, you may be able to claim the cost of repairs on the builder’s domestic building insurance. This insurance covers work worth more than $16,000 for six years and six months if the builder has died, disappeared or become bankrupt.
For more information, view our Building warranties, insurance and insolvency page.