ByLawyers News and Updates

Retirement Villages – QLD

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By Lawyers are pleased to have published a new guide for Retirement Villages (QLD).

With a separate matter plan, commentary, and precedents, the new guide is available as part of the Conveyancing (QLD) publication.

 

Buying a retirement unit

The Retirement Villages (QLD) guide assists practitioners acting for buyers and residents. It sets out the practical steps of conducting a standard residence contract transaction, and highlights important aspects of the law that must be complied with.

The commentary covers in retail the:

  • relevant considerations when taking instructions and advising on a retirement village transaction, including its potential effects on the age pension and rent assistance from the Commonwealth government;
  • types of residence rights, registered and unregistered, that are available to buyers and residents;
  • types of entry payments that can be required under a residence contract, such as a purchase price or an ingoing contribution;
  • stamp duty, goods and services tax and capital gains tax implications;
  • the standard outgoings of a retirement unit that will be payable;
  • important documents that must be obtained before advising on a residence contract, such as compulsory pre-contractual disclosure documents and financial documents of the scheme;
  • necessary steps in entering and completing a residence contract.

Moving into, living in, and exiting a retirement unit

The commentary further deals with:

  • taking occupation of a unit, recurrent charges and other financial considerations during residence;
  • the obligations of residents and scheme operators after moving into and during residence at the retirement village;
  • ending a residence in a retirement village, including termination, the sale of the accommodation unit, exit fees, exit entitlements and sharing in capital gains or losses;
  • available options to resolve village disputes such as mediation and applying to the Queensland Civil and Administrative Tribunal (QCAT) and appeals processes.

Practical precedents

The guide also contains helpful precedents, including:

  • Retainer Instructions;
  • To Do List;
  • Checklist of Important Considerations – Retirement Village; and
  • Letter to Client Providing Advice on Residence Contract.

For detailed guidance on property transactions and additional relevant precedents, the Retirement Villages – QLD guide is best used in conjunction with the By Lawyers conveyancing and property publications: Purchase of Real Property (QLD) and Leases (QLD).

AI prompts – ALL states

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AI prompts are transforming legal document drafting. Technical precision in prompting artificial intelligence can significantly improve the utility and credibility of its output, especially when the AI draws exclusively from data contained in client matters and not from outside sources.

A well-drafted AI prompt acts like a clear direction from a senior lawyer to a junior about how to prepare a document. It sets precise parameters for the task, identifies the required information and where it must be drawn from, specifies the document’s form and any legal or procedural rules with which it must comply, and forbids the use of external or unauthorised sources, including invention – or in AI’s case, hallucination.

The outcome of using an AI prompt in a matter that contains sufficient reliable data should be a competent first draft of a document that the lawyer can then refine and perfect, either with or without further input from AI.

Even if sufficient data is not available in the matter to satisfy the prompt’s requirements for the document, the AI will identify the missing data the lawyer needs to obtain via instructions or other means.

By Lawyers is pleased to introduce AI prompts to our publications, helping our subscribers harness the power of LEAP’s Matter AI.

Initially, prompts for letters, affidavits, statutory declarations, and briefs to counsel are being added to the following guides:

  • Sale and Purchase of Real Estate – All states;
  • Mortgages – NSW;
  • Family Provision Claims – QLD;
  • Family Provision Claims – VIC;
  • Probate and Letters of Administration – VIC;
  • Family Law – Divorce, Children, and Property Settlement – FED;
  • Personal Injury – VIC; and
  • Transport Accident Commission Claims – VIC.

By Lawyers will continue adding AI prompts to our publications as part of our regular and ongoing commitment to enhancing our content and helping our subscribers enjoy practice more.

Like all By Lawyers precedents, AI prompts will be updated as required for any changes in the law and practice.

We welcome feedback and suggestions from our subscribers about AI prompts.

Electronic conveyancing – TAS

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Electronic conveyancing has arrived in Tasmania, but is not currently mandatory.

The conveyancing process in Tasmania is transitioning away from paper-based conveyancing and the physical lodgment of registry instruments in favour of an electronic process.

Transfers and change of ownership transactions can now be completed electronically, along with mortgages, refinances, and discharges of mortgage.

A certificate of title is still required to be lodged with registry instruments and documents, for both paper and electronic lodgements.

Tasmanian Revenue Online (TRO) platform has been upgraded for payment of duty in electronic conveyancing. Online duty payments are available only to TRO Agents registered with PEXA. See the TRO’s website for more information.

Paper-based transfers of land are still available. The duty and post settlement process remains unchanged for paper-based transfers.

The matter plans, commentary, and precedents in the following By Lawyers conveyancing guides have been updated to cover the electronic conveyancing process:

Sale of Real Property (TAS); and

Purchase of Real Property (TAS).

Conveyancing cases – VIC

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A selection of recent conveyancing cases has been added to By Lawyers 1001 Conveyancing Answers (VIC) as part of a review by our property author Russell Cocks.

The following conveyancing cases are among those that have been added:

Additional information has also been added about:

  • Deposit or option fee – A preliminary payment pursuant to a contract may be a deposit that is potentially refundable to the purchaser if the contract does not proceed, or an option fee that is not refundable even if the contract does not proceed.
  • Lessee’s right to quiet enjoyment – A lessor’s failure to repair defective premises may constitute a breach of the lessee’s right to quiet enjoyment.

The extensive 1001 Conveyancing Answers (VIC) publication is available in the Reference materials folder on the By Lawyers Conveyancing (VIC), Mortgages (VIC), and Leases (VIC) matter plans to assist property lawyers and conveyancers in understanding more detailed aspects of the conveyancing process and addressing clients’ issues quickly.

Foreign resident capital gains withholding – FED

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The foreign resident capital gains withholding tax regime is changing.

With effect from 1 January 2025:

  • the withholding rate increases from 12.5% to 15%; and
  • the $750,000 threshold is removed.

The foreign resident capital gains withholding regime applies to sales of taxable Australian property, including vacant land, residential property, and commercial property.

Until 1 January 2025, the regime applied only to properties valued at $750,000 or more. From 1 January it applies to all properties.

Buyers must withhold a percentage of the purchase price and pay it to the Australian Taxation Office (ATO) instead of to the seller unless the seller is an Australian resident and provides evidence of that fact by way of a clearance certificate from the ATO. Sellers who are foreign residents can apply to the ATO for a variation notice and potentially reduce the amount required to be withheld.

Without a clearance certificate or a variation notice, all buyers must withhold the required percentage of the purchase price, even if the seller is an Australian resident.

For sales of taxable real property before 1 January 2025, the foreign resident capital gains withholding amount was 12.5%. From 1 January 2025 it is 15%.

The effect of these amendments is that ALL sellers of real property in all states and territories, whether Australian residents or foreign residents, need to apply for a clearance certificate from the ATO and provide it to the buyer before the completion of the sale. If they do not, then the buyer must pay 15% of the purchase price to the Australian Taxation Office on settlement. For those jurisdictions with electronic conveyancing, this may be able to be done via the settlement platform.

All By Lawyers publications that cover foreign resident capital gains withholding have been updated to reflect this change. This includes the Conveyancing and Property and Estates guides in each state and territory, Retirement Villages (NSW), and 1001 Conveyancing Answers (VIC), (NSW), and (QLD).

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:

Title reform – Conveyancing – NSW

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Title reform – involving the cancellation of certificates of title and other changes to the NSW land titles system – commenced on 11 October 2021. Certificates of title are abolished and the Torrens Register is the single source of truth as to a person’s interest or estate in land. All documents to be registered on the Torrens Register must be lodged by a subscriber, who must verify the identity of the client and establish that they have the right to deal with the land.

These significant changes were introduced in part by the Real Property Amendment (Certificates of Title) Act 2021. The Act provides for the cancellation of certificates of title (CTs) and progression towards 100% electronic lodgment of land transactions.

Title reform  – Cancellation of certificates of title

From 11 October 2021:

  • All certificates of title have been cancelled and will no longer be issued.
  • Existing CTs cannot be required to be produced to have a dealing or plan lodged for registration.
  • Practitioners no longer need to obtain a copy of the CT from their client for a property dealing.
  • Banks are no longer issued with ‘control of the right to deal’ (CoRD) and all recordings relating to CoRD holders have been removed from the Register.
  • Banks can no longer be asked to provide CoRD holder consent in a workspace when a mortgagor wants to lodge a dealing for registration, including a subsequent mortgage.
  • Mortgagee consent still needs to be obtained for the registration of certain dealings.
  • Subscribers are no longer requested to enter the CAC (Certificate Authentication Code) details taken from a CT for consent purposes in the workspace. The concept of the CAC is redundant and is no longer required to be kept securely.
  • Where a subscriber has relied on a CT to establish a right to deal in a transaction conducted before 11 October 2021, the CT or a copy of it must be retained, in line with the requirements for retaining supporting evidence in the NSW Participation Rules.
  • Otherwise, firms holding CTs in safe custody after commencement of this title reform have the following options:
    • seek instructions from each client on what to do with their CT;
    • return all CTs to clients;
    • take a ‘do nothing’ approach.

It is not necessary for firms to stamp a CT as cancelled or mark it in any way if returning it to their client.

Information Notice

From 11 October 2021, in all instances of property ownership, an Information Notice will issue. Details on this notice will include the folio identifier, the dealings registered including registration numbers, the subscriber’s reference and the date of registration. As an Information Notice is not a definitive statement of the state of the Register, a title search will be necessary to acquire accurate title information.

All land dealings must be lodged electronically

From 11 October 2021:

  • Lodging land dealings in paper is no longer permitted. All land dealings are to be lodged with NSW Land Registry Services electronically by a subscriber to an Electronic Lodgment Network such as Sympli or PEXA.
  • The Lodgment Rules specify when out-of-scope electronic dealings can depart from the usual manner of preparing an electronic dealing.
  • Paper dealing prepared before 11 October 2021 can still be lodged with NSW Land Registry Services electronically. They are uploaded as a PDF attachment to the electronic dealing known as ‘Dealing with Exception’. Once lodged, NSW Land Registry Services will examine the paper dealing.

All By Lawyers NSW Conveyancing & Property publications have been updated to reflect these changes.

Conveyancing To do lists – All states

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The By Lawyers Conveyancing To do lists have been enhanced. As a result of recent feedback from a subscriber, space has been added next to the checkboxes in the Sale of Real Property and Purchase of Real Property guides. This extra space can be used to enter the date that a task has been completed, or any other note relevant to that particular aspect of the matter’s progression.

This small but important enhancement to the utility of these popular precedents will be extended to other guides in due course.

To do lists precedents are available in most By Lawyers guides. They reside within Folder A. Getting the matter underway on the matter plans and are an essential matter and risk management tool.

The Conveyancing To do lists chronologically set out the usual steps to be completed in a sale or purchase matter and allow team members working on the file to tick off each step as the matter progresses. This ensures that nothing important is missed. It also assists with seamless continuity when multiple people are working on a matter. These documents can be of particular assistance to team members who are unfamiliar with a particular area of law, or when assigning a task to more junior staff and assessing their progress or providing training.

To do lists can be printed out and attached to the file for manual completion, or ‘pinned’ to the top of the LEAP matter and competed electronically.

In order to pin a To do list to the top of the correspondence window in a LEAP matter, simply right-click on the precedent after it has been saved into the matter and select ‘Pin to top’. It will then stay at the very top of all correspondence in the matter as a handy reminder and reference tool.

By Lawyers love feedback from subscribers! If you have a suggestion or request, please don’t hesitate to get in contact: askus@bylawyers.com.au.

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