On 1 January 2019, foreign transfer duty and foreign landholder duty came into effect by amending the Duties Act 2008. The additional 7% duty applies to acquisitions of residential property where the buyer or transferee are foreign persons, including foreign companies and trusts.
What does this mean to you?
Every buyer or transferee that acquires or purchases land in Western Australia is now required to complete and lodge a Foreign Transfer Duty Declaration Form within two months of executing the dutiable transaction.
cimWell if you haven't already done so;
We usually send our clients ALL the required 'wet-ink' paperwork with our initial postal package. Sometimes we need to allow for the other party to complete certain forms first, so thanks for your patience and understanding if you receive more than one form requiring 'wet-ink' execution.
That Loan Amount on the Unconditional/Formal approval is usually NOT the exact amount your lender will make Available as Funds (aka funds your lender will bring) for Settlement.
The Lender will usually take their fees and costs out of that approved Loan Amount this effectively reduces the Available Funds at settlement. Which may mean that the Buyer might have a 'Client contribution', or 'Funds to complete', or sometimes misnamed as additional 'Deposit' (Deposit as defined under your contract is to be held by the Deposit Stakeholder).
So if there is a 'Client Contribution', then best become aware of the expected difference on the required balance you will need Contribute towards settlement.
We often are not advised of the exact amount the lender will bring to Settlement, till much closer to settlement -often not till morning of settleemnt. However your broker/banker who setup the loan would have the best idea of that amount, and will have usually calculated to some best efforts the amount you will need to contribute. So the next query;
However some lenders / circumstances will not cater for that, in which case our trust account for your contribution is the only other way, these deposits normally take the banks upto three (3) business days to clear those funds. There is a quicker process referred to as Real Time Gross Settlement (RTGS) which allows for funds to be cleared usually by same or at least next business day- if beating for the transferring bank cut-off.
Attend to conditions especially before any expire. ie Termite or Building Inspections, due diligence clause, etc.. and confirm with both the Real Estate Agent and also A1 Conveyancing, once done.
Sellers; Make Sure that your Discharge Authority has been completed and A1 Conveyancing have been sent a copy.
Complete and obligations under your contract and confirm with both the Real Estate Agent and also A1 Conveyancing, once done.
Foreign Buyers Duty
For transactions executed on or after 1 January 2019, an additional 7% duty will be chargeable on the dutiable value of certain acquisitions of residential property by foreign buyers.
Each person acquiring land in Western Australia must complete a foreign buyers declaration form HERE declaring whether they are a foreign person.
The Online Duties system will be modified to allow self-assessment of most dutiable transactions that are chargeable with foreign buyers duty.
For the purposes of the foreign buyers duty, residential property is –
1. land in Western Australia that is, or is capable of being, or is intended to be, used solely or dominantly for residential purposes;
2. vacant or substantially vacant land that is zone solely for residential purposes; or
3. any estate of interest in land described in (1) or (2).
A foreign person includes a foreign individual, corporation or trust.
See the foreign transfer duty HERE and foreign landholder duty fact sheets HERE for information about foreign persons and residential property.
Exemptions or nominal transfer duty
Most dutiable transactions that would be eligible for nominal duty or an exemption from transfer duty will also be exempt from foreign buyers duty. This includes certain transactions involving family court orders and matrimonial agreements, deceased estate transactions and partitions of residential property.
Face-to-face customer education sessions commenced in December 2018. Visit our OSR's education page to register now for upcoming sessions HERE.
Foreign buyer duty publications, frequently asked questions and other support material is available HERE
For more information on foreign buyers duty, see the legislation available on the Western Australian Parliament website HERE
Watch the Video HERE
Source: 19th December 2018 AICWA e-Newsletter
The amendments to the TLA have achieved a second reading in Parliament.
This Bill aims to amend three key areas of the Transfer of Land Act 1893 (TLA). It:
1. Modifies the definition of counterpart documents to improve the processing of mortgages electronically;
2. Enables electronic service of many types of notice under the TLA; and
3. Removes duplicate certificates of title from the conveyancing process, resulting in greater ability to conduct land transactions in a fully electronic environment.
In its submission to Landgate AICWA called for additional amendments such as:
Marked-up TLA can be viewed HERE
The Explanatory Memorandum can be viewed HERE
Source:6th December 2018 AICWA e-Newsletter
Source: 6th December 2018 AICWA e-Newsletter
21 November 2018 Sharon Fox-Slater
While the Airbnb juggernaut seems to show no signs of slowing, hosts are risking their finances by failing to ensure they have legal liability insurance.
The tragic death of a 4-year-old boy and the injury of a 7-year-old girl, who were playing on a homemade swing when it toppled down a slope at a property being rented via Airbnb on the Sunshine Coast in September, raised a question about legal liability at Airbnbs. The incidents shone a spotlight on the insurance gap that exists if the property owner (host) does not have specialist short-term landlord cover.
My client has home and contents cover
Ordinary owner-occupier insurance is generally insufficient to cover death and injury if the property is being rented, either through a standard lease or via a share accommodation platform like Airbnb. Most home and contents policies stipulate that there is no legal liability cover if the premises are being used to generate an income — and that includes rent.
Policyholders intending to use the property for Airbnb can ask if their insurer will extend cover, but as most insurers consider this “high risk”, there’s a good chance they’ll be refused.
My client has landlord insurance
Typical landlord insurance will only insure stays longer than 90 days and usually requires copies of residential tenancy agreements, which means it won’t cover short-term stays. Those with standard (fixed-term lease) landlord cover should confirm with their insurer if it is possible to switch to short-term cover if they go down the Airbnb route — it may not be, as not all landlord insurers offer cover for short-stay leases, and even if they do, they may specifically exclude Airbnb.
BTW: If your landlord thinks a bit of “secret squirrel” is best and they suggest keeping their plans to rent the property via Airbnb quiet from their insurer, they should think again. It is a requirement under the Insurance Contracts Act 1984 (Cth) for policyholders to notify their insurer if there is any change in circumstances, such as a decision to offer their premises for short-term rental. Failure to notify an insurer of a change in living conditions could be considered a breach of the contract and may void the policy.
What about host protection?
Relying on Airbnb’s Host Protection Insurance is fraught. Although it offers up to US$1 million in cover “in the event of a third-party claim of bodily injury or property damage” during an Airbnb stay, it generally only applies when the host or landlord has been at fault or been negligent in the circumstances of the injury.
In this specific case, there would be a need to prove that the owner of the property was aware, or should have been aware, that the swing posed a risk to children who used it, and in light of that knowledge, that they had failed to repair and maintain the swing or remove it. If it is determined that no one was at fault, then there would be no compensation payable.
If, however, it could be proved that the swing was clearly unsafe and the property owner should have been aware it posed a risk, but still failed to repair or remove it, then the children’s family could have grounds for a claim against the host.
So how can my landlord protect their legal liability?
The best way for a host/landlord to protect their legal liability when they rent their property via Airbnb is to have the right landlord insurance. Your landlords need a specialist policy that covers the risks associated with short-term leasing — including legal liability — and one which specifically covers renting via share accommodation platforms like Airbnb.
Hosts/landlords and their agents should reduce the risk of being responsible for damage to property or for compensation for an injured guest by making sure they take steps to avoid any liability in the first place. A key to this is ensuring the property is safe and well maintained.
Despite the best intentions, sometimes things don’t go according to plan and the host/landlord — and also possibly you as their agent — can face a compensation claim from a guest. Having a guest injured or worse on the property is bad enough; finding out that your landlord (and quite possibly yourself) could be legally liable but not insured could be a financial disaster.
So, it pays to make sure landlords hitching their wagon to the Airbnb star have the right short-term insurance in place, and that your Professional Indemnity cover is up to date, too.
The most significant changes to strata in over 20 years have been confirmed following the passage of the Strata Titles Amendment Bill 2018 and the Community Titles Bill 2018 on 1 November 2018 and 6 November 2018 respectively.
What happens now?
Landgate’s focus will now be on completing the regulations to support the amended Strata Titles Act 1985 and the new Community Titles Act 2018. Landgate will continue consulting with public, government, industry and community stakeholders on those regulations.
How to stay informed
For further information on the reforms, refer to the updated strata reform webpages.
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