As many of you are getting ready for the Christmas break, the Hausples.com.pg team in collaboration with Cayman Properties is releasing the second part of the guide manual about purchasing property in Queensland in the fastest, easiest and most secure way. If you have missed the first part of the guide, catch up by reading it HERE!
The Main Steps in the Purchase Process
Step 1: There is an initial deposit to hold the property: An initial deposit of $5,000 is required to reserve the property. In other words, it will be take it off the market temporarily while you review the contract for sale. This is for a period of two weeks (14 days). If you choose to not go through with the purchase or you fail to fulfill the necessary steps, the deposit will be refunded and no sale will happen.
Step 2: There is a legal review of the contract: It must be reviewed by your Australian solicitor. They must then provide professional advice.
Step 3: The full deposit is due at signing: The full deposit is typically 10% of the total purchase price. (Financing will require a 20% deposit in total. This 10% will count towards it.)
Step 4: Getting finance and FIRB approval: If you are still trying to get financing approved, in order to protect yourself, you can make the contract “Subject to finance approval.” This typically gives you 14 days from the date you signed the contract to get financing in place. If financing falls through, you can terminate the contract. Remember, in order to get a loan in Australia, you will need approval from the Foreign Investment Review Board. Thus, those two details go hand-in-hand.
The amount of time it takes to get to settlement varies. Existing residential property is typically settled 30 – 60 days after the contract is signed. Pre-construction (“Off the plan”) residential property typically takes around 12 months to be completed. The balance of the purchase price is due at the time of settlement. This is typically 14 days after construction is finished. New homes with separate land and house contracts have separate settlement dates for each contract. The contract for the land is typically settled 30 – 60 days after the contract is signed. Meanwhile, the payments for the house contract are typically done as 5 draw down installments during construction.
Insurance and Other Expenses
Of course, the loan payments are not the entire cost involved in owning a property. You should be aware of some of the following typical local expenses: Council rates and water levies are due bi-annually. Utilities, such as gas and electricity, are due quarterly. For apartments, there are quarterly Body Corporate Levies. For homes, there is insurance, due annually.
Please note that tenants are responsible for their own utilities and for insurance on the contents of the property. Those are not the landlord’s responsibility. However, Body Corporate Levies include coverage of building insurance. The landlord is responsible for covering common areas plus the walls, floors, and ceilings of the apartment. You are responsible for insurance coverage starting the day you sign the contract.
If you have bought a new house, the builder will provide insurance during the construction. Once the construction is completed and you take possession, you responsible for insurance to cover replacement value and the contents of the home.
Furnished versus Unfurnished Property
In Australia, residential property is typically sold unfurnished. However, “unfurnished” means different things in different countries. So, to be clear, it is standard for unfurnished properties to include a cooktop, an oven, an extraction fan, a dishwasher, an air conditioner, and letterbox. It may also include fencing and landscaping.
In Australia, rentals units are also typically unfurnished. However, this is not always the case. Apartments that offer short-term leases must be furnished. Additionally, it is a good idea to furnish residential property that is located close to a business district. In such cases, the additional upfront cost of furnishing the unit can be well worth it. Furnished units near business districts typically charge an extra $20- $50 per bedroom for a weekly rental. Over time, this extra money really adds up and can more than cover the initial costs involved in furnishing the unit.
Time to Invest is now. Why?
You have just 3 weeks until the Australian Government is bringing in new Foreign investment laws will charge all Foreign investors A $5,000 approval fee!
This legislation will come into effect on 1 December 2015 which is just 3 weeks away. Click here for further details. With this new fee your purchase costs on a $400,000 home will increase from approximately 5% currently to 6.25%.
So if you are intending to purchase property this year why pay more than you have to?
Let us help you with FINANCE, LEGAL SERVICES, and BUILDING. We make it so easy for you to invest when based overseas.
We have just listed new 4 bedroom home in Smithfield Cairns area suitable for a Foreign Investors with beautiful high raked ceilings and plenty of light and breeze.