There are limitless possibilities for the things you might want to check before you buy a property and this may vary based on why you are buying the property. We’ve compiled a list of some of the most important things to look out for. If you haven’t already done so, you might want to check out our overview of the process for buying a property.
1. The Terms Of The Sale
The contract for sale of land will dictate the terms of the sale. This includes things such as the price, deposit, settlement period, and any obligations of the parties to the contract. It’s important to have a lawyer review your contract and negotiate the terms of the sale for you before signing a contract. There will usually be significant financial penalties built into the contract if you don’t comply with its timelines.
2. Tax Implications
Buying property can have substantial tax implications. Stamp duty is usually payable at the time of purchase, and depending on your circumstances you might also have to pay ongoing land tax.
If you are not an Australian Citizen, there can also be significant taxes both at the time of purchase, and on an ongoing basis.
It’s always a good idea to speak to your accountant about how your property purchase may impact your tax liabilities.
3. Matters Affecting The Title
Your lawyer will provide you with advice on anything affecting the title to the property. This can include things such as easements, rights of way, restrictions on the use of land, or covenants. These are obligations that run with the land, and which you the property purchaser are going to have to comply with during your future ownership of the land.
It’s important to have a lawyer check these things for you as they may stop you from using the land the way you intend to.
4. Consultant Reports
Engaging consultants to prepare repots are also a critical part of the process. For houses, a building and pest inspection report is usually done prior to purchase to check for any structural or other problems with the building, and to determine any pest infestations such as the presence of termites.
In strata properties, you will usually need to have a strata inspector prepare a strata inspection report which will involve an inspection of the strata scheme’s records to understand what is happening in the building. This will usually include documents such as financial statements, minutes of general meetings, copies of insurance documents, and fire safety statements.
In addition to these searches, depending on what you are planning to use the property for, you may want to engage additional consultants such as town planners or surveyors to provide their advice to you on the property as well.
5. Due Diligence Searches
There are some matters that can be investigated by way of ordering searches. It’s common practice to undertake rate enquiries and land tax searches to make sure you don’t inherit the previous owner’s outstanding rates or tax bill along with the property.
Further to this however, it is also possible to search for records of building approvals, outstanding notices or orders, and whether various government organisations have proposed acquisitions in the land you are intending to purchase. All of these searches have the potential to uncover problems with the property which can end up costing you tens or even hundreds of thousands of dollars.
6. Planning And Development Information
An often overlooked part of the process is checking what is happening in the area around the property. A search of your local council’s development application tracking tool can tell you whether development is taking place near you. For example, you wouldn’t want to pay extra money for a waterfront view, only for someone to build in front of you a few months later and block your views.
In addition, the way the property is zoned may impact what can be built on the land, or what can be built around your land.
It’s also important to consider heritage controls, flood maps, bushfire zones, and land contamination in the area you are looking to purchase your property.
At Thornton and King, we have team of specialist property lawyers who conduct diligence on thousands of property transactions each year. Whether you’re looking to buy your first property, or you’re a seasoned property professional, we’d love to help you through the property buying process.
Give us a call or submit an enquiry now.