ByLawyers News and Updates

Publication reviews – All states

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Publication reviews are part of By Lawyers’ commitment to quality and keeping our subscribers up to date with changes in practice and procedure.

Our publication reviews target commentaries, or precedents, or both. The purpose of the reviews is to update and ensure consistency in styles, formatting, hyperlinks, naming protocols and, if necessary, the substantive content.

The results of a review can include new, amended, or deleted commentary, commentary headings, and precedents.

Sometimes the title or location of a precedent will be altered.

Occasionally there are amendments to the sequence of folders, commentary headings, precedents, and hyperlinks on the matter plan.

Any changes applied will be reflected in an amended matter plan.

Practitioners using our guides will not always realise when a publication review has been conducted. However, sometimes the resulting changes will be apparent, and amendments or enhancements might take a moment to get used to.

Lately, our in-house team, in conjunction with our authors in the various jurisdictions around Australia, have been focussed on reviewing the Full Commentaries in the following publications:

Some of these are still a work in progress, so keep an eye out for any changes.

We love to help our subscribers, and we love feedback. If you have any questions or concerns about changes arising from a publication review, do not hesitate to let us know. We are always happy to discuss any change we have made, or consider others. If you can’t find a section of commentary or a precedent, send us an email and we will point you in the right direction.

And, if you like the changes we have made, please take a moment to let us know so we can continue helping you to enjoy practice more.

Our email is: askus@bylawyers.com.au

Titles – VIC

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From 3 August 2024, all titles to land issued by the Registrar of Titles in Victoria will be electronic.

Existing paper certificates of title (pCT) remain valid until they are replaced with electronic certificates of title. This will occur when they are next produced for a conveyancing transaction. On registration of any transaction requiring a certificate of title, whether lodged as paper or electronically, an electronic certificate of title (eCT) will be issued.

Paper will no longer be an available format in the Issuing Instructions section within an Electronic Lodgment Network such as PEXA.

The procedures around the production of paper certificates of title remain unchanged. If a property has an existing paper certificate of title, the document must be produced for lodgment when conducting a paper transaction.

For an electronic transaction, an existing paper certificate of title must be converted to an electronic certificate of title for lodgment. This is done by way of an Administrative Notice – Convert to pCT and Nominate to Lodgement Case in a workspace. The paper certificate of title is no longer required, and the subscriber must destroy or invalidate the certificate of title. Supporting evidence for electronic instruments must be retained for at least seven years, as per the Model Participation Rules.

On registration of a paper transaction, eCT Control will be held by the Registrar. On registration of an electronic transaction, eCT Control will be determined by the rules outlined in the Business rules for determining eCT Control after a transaction from the Guide to Certificates of Title and Administrative Notices published by The Department of Transport and Planning.

The By Lawyers Purchase of Real Property (VIC) and Sale of Real Property (VIC) are being updated to reflect these changes.

Land transfer duty – VIC

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Victorian land transfer duty has undergone a significant reform, however it will be some years before the full effects are felt.

Overview

The Commercial and Industrial Property Tax Reform Act 2024 progressively abolishes land transfer duty on commercial and industrial land and replaces it with an annual property tax known as the commercial and industrial property tax (CIPT).

From 1 July 2024, commercial and industrial properties will enter the CIPT scheme when there is an eligible transaction, which is generally a sale, a subdivision, or consolidation of title. These events are defined in the Act as entry transactions.

Transfer duty still applies to an entry transaction, and any applicable transfer duty concessions also apply, such as the 50% concession for a transfer of eligible commercial and industrial property in regional Victoria. Eligible purchasers will have the option of accessing a government loan through Treasury Corporation of Victoria for the duty payment on the entry transaction. The loan will be secured by a first ranking statutory charge on the applicable land.

Ten years after an entry transaction, CIPT will begin to apply to the land at a flat rate of 1% of the land’s unimproved capital value, assessed annually.

Generally, transactions after the entry transaction will be exempt from land transfer duty if the property continues to be used for commercial and industrial purposes.

CIPT will not apply to any property until it has an entry transaction. Properties that stay in the same ownership will not become liable for CIPT.

Exemptions and concessions

Transactions under a contract entered into before 1 July 2024 are not affected by the scheme.

If, after entry into the CIPT scheme, a property changes ownership in circumstances where a land transfer duty exemption applies, the transaction will generally also be exempt from CIPT. This applies, for example, to transfers from a deceased estate, or between spouses.

For a build-to-rent property that has entered the CIPT scheme, a reduced CIPT rate of 0.5% applies.

By Lawyers updates

Updates to the By Lawyers Conveyancing (VIC) publications reflecting these changes to land transfer duty include:

Revenue measures – QLD

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The Revenue and Other Legislation Amendment Act 2024 (QLD) made a number of changes to state government revenue measures.

Affected revenue measures include transfer duty concessions, the First Home Owner Grant, the surcharge rate of land tax, and additional foreign acquirer duty.

Transfer duty concession changes – From 9 June 2024

Eligibility for the first home concession has been extended to homes with a dutiable value up to $800,000 with no duty payable on homes valued up to $700,000 and a partial concession for homes between $700,000 and $800,000.

Eligibility for the first home vacant land concession has been extended to land valued up to $500,000 with no duty payable on land valued up to $350,000 and a partial concession for land valued between $350,000 and $500,000.

First Home Owner Grant changes

The First Home Owner Grant and Other Home Owner Grants Act 2000 (QLD) has been retrospectively amended from 20 November 2023 to increase the amount of the First Home Owner Grant for eligible transactions entered into between 20 November 2023 and 30 June 2025.

For buying or building a new house, unit, or townhouse, the grant amount is:

  • $30,000 for contracts signed between 20 November 2023 and 30 June 2025, both dates inclusive.
  • $15,000 for contracts signed before 20 November 2023.

For owner-builders, the grant amount is:

  • $30,000 where foundations are laid between 20 November 2023 and 30 June 2025, both dates inclusive.
  • $15,000 where foundations were laid before 20 November 2023.

Surcharge rate of land tax – From 30 June 2024

The surcharge rate of land tax applied in addition to land tax rates for foreign companies and trustees of foreign trusts, and absentees, has increased from 2% to 3%. Ex gratia relief continues to be offered for Australian-based foreign entities whose commercial activities make a significant contribution to the Queensland economy and community.

Additional foreign acquirer duty (AFAD) – From 1 July 2024

The rate of additional foreign acquirer duty has increased from 7% to 8%.

By Lawyers updates

By Lawyers Conveyancing (QLD) publications updated to reflect these changes to revenue measures include:

1 July – All states

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1 July updates are always a big focus for By Lawyers. Many Commonwealth and state legislative instruments provide for the scheduled indexing of relevant monetary amounts, and adjustments – usually increases – in government fees and charges. These regular updates occur at the start of every financial year and they impact many different areas of law, and therefore numerous By Lawyers publications.

The 1 July updates include court filing fees, lodgment fees for property dealings, land tax thresholds, minimum weekly compensation amounts for Workers Compensation, the cap on damages in defamation claims, and penalty units for fines for various criminal offences and civil penalty provisions.

By Lawyers always monitor and apply these changes for our subscribers. Each year we ensure our publications are amended where necessary to reflect 1 July updates.

We also monitor and update for similar legislative indexing and increases which occur regularly at other times of the year. These include 1 January changes and other specific dates for various areas of law as prescribed by some statutes.

The 1 July updates have been applied this year, or are in the process of being applied as they get released, to the following By Lawyers publications:

Quite separately, there is also new and amending legislation from both Commonwealth and state parliaments that commences on 1 July. Substantive amendments have been made to a number of By Lawyers publications to account for the commencement of such legislation. Please see the various other By Lawyers News & Updates posts dealing with those updates.

By Lawyers is always up to date!

First home owner – SA

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Property value caps have been removed for both the First Home Owner Grant and the stamp duty relief available to first home owners.

These provisions were announced in the 2024-25 State budget, and apply to contracts entered into on or after 6 June 2024.

Additional measures to tighten the previous home ownership criteria will apply to contracts entered into on or after the Statutes Amendment (Budget Measures) Bill 2024 passes and the Act receives assent.

Stamp duty amendments

The property value caps for stamp duty relief have been removed. For contracts entered into on or after 6 June 2024, full stamp duty relief applies on the purchase of all eligible new homes and vacant land used to build a new home, regardless of price.

The additional amendments to apply from assent of the amending Act will:

  • tighten the previous home ownership criteria so that a first home buyer and their spouse or domestic partner who have previously owned a residential property in Australia will not be eligible for stamp duty relief, including where that property was not occupied, or was occupied for less than 6 months; and
  • remove relief for first home buyers from the foreign ownership surcharge.

 First Home Owner Grant amendments

The property value caps have been removed for contracts entered into on or after 6 June 2024 for first home owners buying or building a new home, regardless of price.

The additional amendments to apply from assent of the amending Act will:

tightens the previous home ownership criteria so that a first home buyer and their spouse or domestic partner who have previously owned a residential property in Australia will not be eligible for a First Home Owner Grant, including where that property was not occupied, or was occupied for less than 6 months.

Publication updates

The by Lawyers  Conveyancing (SA) publication has been updated regarding the removal of the property value caps, including the commentary and the Retainer Instructions – Purchase of Real Property in the Purchase guide. The updates relating to the tightening of the previous home ownership criteria and the removal of relief for first home buyers from the foreign ownership surcharge will be made in due course.

Electronic signing and witnessing

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A new guide to Electronic Signing and Witnessing has been added to the Reference Materials folder on all By Lawyers matter plans.

This helpful resource summarises the various legislation across all Australian jurisdictions for electronic transactions.

Electronic signing and witnessing

In Australia under federal, state, and territory legislation many transactions can be completed electronically.

Electronic signing and witnessing are available for many, but not all, transactions and documents encountered in every day practice. However, the availability of electronic signing and witnessing is considerably different in each jurisdiction.

The new guide summarises the applicable legislation in each jurisdiction, to assist practitioners understand when electronic signing and witnessing is permitted and how it can be done.

Legislation

The Commonwealth took the lead on legislation to enable electronic transactions at the turn of the millennium, and sought the cooperation of the states in enacting consistent laws across all jurisdictions, resulting in the following legislation:

Electronic Transactions Act 2001 (ACT)

Electronic Transactions Act 1999 (CTH)

Electronic Transactions Regulations 2020 (CTH)

Electronic Transactions Act 2000 (NSW)

Electronic Transactions Regulation 2017 (NSW)

Electronic Transactions (Queensland) Act 2001 (QLD)

Electronic Transactions (Northern Territory) Act 2000 (NT)

Electronic Transactions (Northern Territory) Regulations 2001 (NT)

Electronic Communications Act 2000 (SA)

Electronic Communications Regulations 2017 (SA)

Electronic Transactions Act 2000 (TAS)

Electronic Transactions Regulations 2021 (TAS)

Electronic Transactions (Victoria) Act 2000 (VIC)

Electronic Transactions (Victoria) Regulations 2020 (VIC)

Electronic Transactions Act 2011 (WA)

Electronic Transactions Regulations 2012 (WA)

Unfortunately, the approach taken by each state and territory to implementing this legislation differs to various degrees from both the Commonwealth’s and each other’s. Each jurisdiction has exempted certain statutes, transactions, and documents from the operation of their Act or some of its provisions.

This means that, while all jurisdictions have laws providing for electronic transactions and electronic signing, and some have laws for audio visual witnessing, the documents that can be electronically signed and the requirements for execution vary between the jurisdictions.

The new guide brings all of this information together for practitioners to easily reference in any matter they are working on.

Conveyancing Answers – VIC

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Some notable recent conveyancing cases have been added to 1001 Conveyancing Answers (VIC) and the information in several sections has been updated.

These enhancements are part of an extensive review of the publication by our author Russell Cocks.

Updates include detailed information on:

  • recent changes to land tax for vacant residential land;
  • the new prohibition against the adjustment of land tax for properties priced under $10,000,000;
  • the new prohibition against the adjustment of windfall gains tax; and
  • new requirements surrounding building manuals under s 15A Sale of Land Act 1962.

New cases added to the publication include:

1001 Conveyancing Answers (VIC) is available in all By Lawyers conveyancing and property publications in Victoria. This comprehensive reference work assists property lawyers and conveyancers to understand more detailed aspects of the conveyancing process and solve problems for their clients.

Land tax – NSW

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From 1 February there are changes to land tax exemptions in New South Wales. A new minimum ownership requirement applies to applicants seeking the principal place of residence land tax exemption.

A principal place of residence is generally exempt from land tax. Only one property can be claimed as a principal place of residence, for either an individual or a family. If a principal place of residence is used for non-residential purposes, then there will be a reduction of land tax for the proportion used as a residence.

A principal place of residence exemption can only be claimed by natural persons, not corporations or trusts except for a concessional trust: s 3B of the Land Tax Management Act 1956.

Following the amendments, s 15 of Schedule 1A of the Act now imposes a minimum ownership requirement in order for a property owner, or owners, to access the principal place of residence exemption. There is now no entitlement to the exemption unless all of the people who use and occupy the land as a principal place of residence together hold at least a 25% interest in the land.

Those who currently claim the principal place of residence exemption, but collectively have an interest in the land of less than 25%, can continue to claim the exemption as a transitional measure up to 31 December 2025.

The requirement does not apply to participants in an approved shared equity scheme under s 281 of the Duties Act 1997.

The By Lawyers Conveyancing (NSW) publication has been updated accordingly.

Adjustments and land tax in 2024

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By Russell Cocks, Solicitor

Adjustments

As of 1 January 2024, practitioners need to ensure that the form of contract that they are using for the sale of real estate complies with amendments to the Sale of Land Act 1962, being new s 10G and s 10H. These amendments apply to contracts for a purchase price of LESS THAN $10,000,000 indexed: s 10I.

It is the responsibility of practitioners to ensure that contracts that may be signed after 1 January 2024 are compliant. These changes also need to catch up with any contract that was prepared before 1 January 2024 and may be awaiting execution, especially those provided to estate agents in anticipation of a sale, but which did not occur before 1 January 2024.

Section 10G provides that a condition in a contract is of no effect to the extent that the provision purports to require the purchaser to contribute to the vendor’s Land Tax. Such conditions are virtually universal, so this change will affect 99.9% of contracts for the sale of land. The section only applies to contracts that come into force after 1 January 2024.

Including a condition in breach of the Act in a contract AFTER 1 January 2024 exposes the vendor to a substantial financial penalty.

Land Tax is not a factor in the great bulk of conveyancing transactions that relate to the sale of a Principal Place of Residence or, to a lesser extent, exempt farming properties, as these categories of property do not attract Land Tax, so no adjustment is required. However, it will still be an offence to include reference to Land Tax in the adjustment condition, so it is important to ensure that ALL contracts are reviewed to ensure that Land Tax is REMOVED from the outgoings to be adjusted at settlement.

The change will have the greatest effect in relation to the sale of commercial/industrial properties and where a vendor owns multiple properties. While adjustments may be conducted in the “normal” way if the contract was signed before 1 January 2024, no adjustment can be made in respect of Land Tax for any contract that came into existence after 1 January 2024.

An area where this change will be significant, and perhaps not before time, is where a residential land subdivider includes adjustment conditions that pass on what can be substantial and generally unexpected Land Tax liabilities. In extreme examples, subdividers include conditions that pass on the vendor’s Land Tax, often at the subdivider’s high rate, from the date of the contract rather than the date of settlement. This results in “Mum & Dad” purchasers unwittingly becoming responsible for many thousands of dollars of the subdivider’s Land Tax. It may be this extreme example of consumer abuse that has prompted this “big stick” response of prohibiting Land Tax adjustment at all.

In a similar vein, s 10H prohibits contractual conditions (including in options) that seek to adjust the vendor’s existing Windfall Gains Tax (WGT) liability. WGT commenced on 1 July 2023 (see the Legal Practitioners Liability Committee Windfall gains tax hub for details) so it is not likely that this amendment will affect any or many contracts. WGT MIGHT potentially apply to any land (except GAIC land) that is rezoned with a consequential gain in value. The amendment only prohibits adjusting WGT in respect of an EXISTING WGT liability (assessment). It does not prohibit an adjustment condition in a contract that allows adjustment of a future WGT assessment which arises during the course of the contract. The parties may agree that this will be borne by the vendor, who will receive the assessment, maybe the responsibility of the purchaser at settlement or may be apportioned between the parties according to some agreed formula.

A vendor with an EXISTING WGT liability must take that liability into account when calculating the price for which the vendor is prepared to sell the land. That EXISTING WGT liability CANNOT be passed on, in whole or in part, to the purchaser and will become payable by the vendor in full at settlement.

Land tax

In addition to changing how Land Tax can be adjusted on sale, amendments to the Land Tax Act 2005 change existing Land Tax obligations and create new obligations.

Section 34A presently imposes a vacant residential land tax on taxable land capable of being used for residential purposes within certain municipal districts of Melbourne. That tax is to be extended from 1 January 2025 to apply to all land in Victoria which is taxable vacant residential land. This tax applies to homes, not vacant land, which have been vacant for more than six months in the preceding calendar year, commencing 2024, and attracts land tax at the rate of:

  • 1% Capital Improved Value (CIV) in first year;
  • 2% CIV in second year; and
  • 3% CIV in third year.

Section 34B(2)(b) introduces a new tax from 1 January 2026 on vacant land suitable for residential use within metropolitan Melbourne if the land has been vacant for five years in one ownership. This tax applies to unimproved land.

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