In recent days, bank loans have been further tightened news, let already signed a home contract but have not been delivered to the heart of the customer is also tight.
In addition to the potential buyers who plan to pay the whole sum at a time, the first reaction of most people in this situation is to find a way to get rid of the hot potato at once. The most direct way is to ask the seller, through a buyer's lawyer, that the contract cannot be delivered because of financial / loan difficulties, and ask the seller to agree to rescind the contract and return the down payment.
Unfortunately, new state home-purchase contracts usually cannot be terminated because buyers fail to get bank loans.
In our previous articles, we discussed the financial liability of the buyer of a new state contract for breach of contract, that is, the seller can usually forfeit at least 10% of the down payment or recover the 10% of the outstanding down payment; And if the resale price gap is greater than 10 percent, the seller can continue to recover the excess from the buyer.
Therefore, the seller's initiative to cancel the contract is very small, and it is likely that the buyer directly declared default in order to maximize the protection of the seller's interests.
In the current jittery situation in the mortgage market, if you really foresee that there will be non-deliverable situations, as a buyer, you should first find out which ways to transfer before the settlement. Each way involves formalities, taxes, and so on.
Knock on the blackboard and you want to know how to resell before delivery (also applicable to popular resale).
1, terminate the original contract and sign a new contract
This applies to the seller agreeing to terminate the contract and resell to a person who has no relative / consanguinity / marital relationship with the buyer.
If the buyer has found a potential next buyer, the buyer can make a request to the seller because of financial difficulties or other factors that prevent him from completing the contract. The buyer needs permission from the seller to terminate the contract.
This approach depends on whether the seller agrees or not, and if the seller agrees to terminate the contract, the contract between the buyer and the seller becomes invalid, and the seller enters into a new contract with the next buyer, usually at the same price and terms; But the seller may or may not ask for a fare increase.
In this case, the first buyer does not have to pay stamp duty, the stamp duty is borne by the second buyer, the final transfer name will be a new buyer. The initial 10% down payment by the first buyer will be refunded by the seller's lawyer from the trust account to the first buyer at the same time as the termination of the contract.
There is also a door to the contract between the seller and the first buyer. Sometimes, the seller does not completely discharge the responsibility of the first buyer. If the second buyer cannot be delivered, the seller can still pursue the responsibility of the first and second buyers. Although this is rare, you should carefully determine the terms and conditions with your lawyer.
2、On-sale
It is applicable to the first buyer who wishes to resell the price increase before the transaction.
In this way, the buyer's own contract continues, but the buyer finds a new buyer to buy his own property, so the buyer can make a new contract. In the new contract, the original buyer becomes the seller and the contract price can be set by the original buyer.
In the case of contractual restrictions, buyers must obtain the seller's consent before looking for a sales agent to sell the real estate, and the final deal also requires the presence of both parties at the same time. Of course, if the terms of the contract do not mention whether the seller is required to agree, that is, there are no restrictions, the buyer can contact the sales agent in the first place to sell the matter.
In this case involved in two contracts, the original buyer and the buyer to close the property (the same), and then transfer to the next (contract 2); The original buyer had to pay a stamp duty, and the next buyer had to pay a 10 percent down payment under the new contract; the first buyer paid 10 percent of the down payment to the seller, and the second buyer paid 10 percent of the down payment to the first buyer.
The two contracts need to be delivered at the same time, the property will eventually transfer to the second buyer's name. The contract obligation of the first buyer is not discharged until the last three parties close the same place at the same time.
3, change of name between immediate family members (Section 18 (3) of Duties Act 1997 NSW)
This applies to situations where buyers cannot lend themselves, but relatives or friends can lend and are willing to take over the property without the prior consent of the seller.
According to section 18, paragraph 3, of the new state tax law, the transferee's name can be changed to his immediate family (such as spouse, parents, brother and sister, children, etc.) on the transfer document when the property is closed. The transferee needs to write Statutory Declaration (to be prepared by a lawyer.
In this case, the buyer is only required to pay stamp duty once, and the buyer's relatives are only required to pay $10 stamp duty.
Buyers need to prepare evidence to prove their relationship with their relatives, such as the notarization of the birth certificate (which shows the name of the parent), the notarization of the relationship or the marriage certificate, etc. In the case of spouses (including cohabiting spouses), evidence is needed to prove that the relationship existed at the time the contract was signed. In addition, the transferee is required to do statutory declaration and directions (prepared by a lawyer), to sign in front of a lawyer or Justices of the Peace, and to be signed by an overseas client at the Australian Consulate / Embassy in China.
New relatives will also be required to provide passport notaries or copies of passports certified by Australian lawyers, Justices of the Peace or Consul.
After completing this series of formalities, although the name of the buyer on the first page of the contract will not change, apply directly in the name of a relative when making a bank loan, and at the same time provide a series of signed transfer documents to the bank at the same time.
Here are some other information you might need to know:
Stamp duty
In the first case, even if the buyer has paid stamp duty, if the contract is annulled, stamp duty can be returned; In the second case, the buyer's stamp duty is inevitable, and the next buyer is also required to pay stamp duty (the second contract price has been calculated); In the third case, buyers still have to pay stamp duty on time, but the buyer's relatives are only required to pay $10 in stamp duty.
Please note that, on 21 June 2016, the Government of New South Wales announced that, regardless of either of the above, if the new buyer is an overseas person, If they are not Australian citizens or permanent residents of Australia (who need to live in Australia for more than 200 days a year prior to the date of the change), the government will impose an additional 4% stamp duty on house prices.
If you are using a third approach (renaming between immediate family members) and the original buyer has paid an additional 4% stamp duty, then if the immediate relative is overseas, there is no need to pay an extra 4% stamp duty.
About overseas Investment Authority approval of (FIRB)
If a name is added, a change or change in the name or ratio involves an overseas person (that is, not an Australian citizen, an Australian permanent resident or a New Zealand citizen) and is required to apply for the approval of the FIRB overseas Investment Authority.
If the house or land price is less than 1 million, the FIRB application fee is $5,500. If it is more than 1 million, the price will gradually increase.
About VAT
Australia is required to pay value added tax (VAT) if the original buyer is profitable by selling a house or changing his name. Please consult an accountant for details.
About changing names after transfe
Change your name after the house is transferred, and one of the parties will have to pay another stamp duty (based on the market price at the time of transfer). In addition, unless it is self-housing, there is value added tax to pay.
On inheritance
We cannot predict whether the Government will have estate duty in the future, but there will be certain fees for succession, such as legal fees and court applications for estate processing. It is also important to consider whether VAT needs to be paid (especially if the beneficiary is an overseas person).
I hope the above instructions will help, please choose the best way for you and tell your lawyer.
