Booklet: Buying Property in NSW (Chapter 7 – Settlement)

Booklet: Buying Property in NSW

Below is Chapter 7 of our ‘Buying Property in NSW’ booklet. To read the other chapters of our booklet, click the links below:

Settlement marks the final stage of the property purchase process, where ownership officially transfers from the vendor to the purchaser.

Stamp duty

Stamp duty is a significant tax payable by property purchasers in NSW. 

Stamp duty is typically payable within 3 months of exchanging contracts, unless you are buying off-the-plan. In the case of off-the-plan purchases, you may have an additional 12 months to pay. You must ensure you have sufficient funds available to cover the stamp duty costs. It is essential to factor this into your budget when planning your property purchase. Your lawyer usually arranges for payment but will require you to provide the funds. 

You should check whether you qualify for any stamp duty exemptions or concessions. Eligibility may depend on factors such as the purchase price, your property ownership history, and whether you intend to occupy the property as your primary residence after settlement.

Client authorisation and verification of identity (VOI)

Most property settlements now occur online via an e-conveyancing platform. Your lawyer signs the transfer documents electronically on your behalf. To allow your lawyer to sign, you must provide your authority via a client authorisation form for the transaction. 

Your lawyer also needs to verify your identity to ensure you are the purchaser on the contract and can properly authorise them to sign. Verification of identity is usually done via a face-to-face meeting where you show 100 points of identification to the lawyer, such as your current passport and driver’s licence.

Financing

As a purchaser, you will need to contact your lawyer to obtain settlement figures. These figures will detail the balance of the purchase price, along with your portion of rates and levies, such as council, water and strata rates. 

Coordinate with your mortgage lender to ensure that funds will be available for the settlement day. If your mortgage does not cover the entire amount payable on settlement, you will need to arrange for any shortfall to be available for payment. This is usually organised by you transferring cleared funds to your lawyer’s trust account or to a bank account that your lender can access prior to the settlement day.

To download a PDF of our booklet, enter your email below.

 

The information contained in this post is current at the date of editing – 21 August 2024.

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