199838_Australian Legal Issues Q&A What legal issues are people concerned about when buying property in Australia

Australian Legal Issues Q&A: What legal issues are people concerned about when buying a property in Australia?

Australia's legal system is impeccable and complete, but the process is still very complicated in terms of buying a house in Australia. The process usually involves many legal issues, so it is necessary to hire a professional lawyer when buying a house in Australia! (Conditions for China investor to buy property in Australia)

Juwai.com collected email questions from netizens, sifted out questions, and invited professional licensed lawyers in Australia to answer the legal issues you may encounter during the process of buying a property in Australia.

1. Q：I will be going to Melbourne soon to study for 3 years for my master's degree, can I buy a second-hand villa? Do I have to apply for FIRB to buy a used house and what is the application fee? Can I rent out the house I bought

A：You can buy a second-hand house for your own use during the period of your student visa, but you need to sell it within 3 months after your visa expires or before you leave the country. Usually requires a contracted buyer to apply for a loan. All purchases require a FIRB application, depending on the circumstances. Alternatively, you can apply for a permit to buy a house and then switch to a house permit. You may not rent out, sublet or vacate the property as it is considered a breach of the FIRB regulations.

2. Q: I read your article about pre and postnuptial property in Australia and my family is facing this problem. So how do you protect premarital property such as property purchased before marriage and bank deposits?

A: There are several ways to consider the reasonable protection of premarital property between spouses: 1. The creation of a will. 2. The signing of a prenuptial or marital agreement between spouses. 3. To apply to the court for a decree regulating the agreement on the distribution of each other's property. All of these methods can protect prenuptial property, especially in the event of future separation, and reduce the exposure to the impact of legal jurisdiction.

3. Q: I signed the purchase contract with the developer in November 2015 and paid a 10% deposit. At the time, the developer said the property would be delivered in February 2016. The developer failed to deliver the house on time and pushed it to July. However, the inspection failed in July and the house was not delivered. Can I cancel the contract and recover the 10% deposit?

A: The first thing to look at is the state in which you are buying the property and the specific contract terms. Usually, there is a sunset clause in the uncompleted contract, which means that the property cannot be delivered after the sunset date and the contract can be rescinded. If withdrawn, the developer will refund the buyer. Therefore, it is necessary to know specifically; 1. Whether there is a sunset clause in the contract and, if so, the specific date of sunset. 2. Whether the sunset date has arrived. 3. What are the contract’s arrangements after the sunset date?

4. Q：What are the reasonable and legal ways to reduce tax on rental income for overseas investors investing in property in Australia?

A: With regard to taxation, the main principle is that rental income should be included as part of one's taxable income for the year and paid according to the tax rate. The main methods of general tax deductions are through the depreciation of the property to be reported as a book loss. Depreciation is based on the condition of the property and the depreciation schedule, which can be negotiated with your accountant.

5. Q: 1. Is the electronic version of the contract valid in Victoria? 2. If the electronic version of the contract is valid, the contract is effective from the date the developer signed the contract or the date I received the electronic version of the contract in the mail? 3. Cooling period's start date is when the developer signs the contract or the date I receive an electronic copy of their signed contract in the mail?

A: 1. In simple terms, the signature is valid in electronic form. However, the two parties (or their attorneys) will generally be contacted in advance to negotiate and add the original signatures within a specified period of time. 2. Contracts: The effective date is the date on which the contract was signed by the last contracting party. In the home buying process, the buyer usually signs the contract first and the seller later. Therefore, the effective date of the contract should be the date of the seller's signature, which would also appear on the contract. Please see the signed contract received from the seller and the date stated there. 3. Generally, the cooling-off period begins on the effective date of the contract. After the cooling-off period, the buyer will not be able to cancel the contract. In most cases, both parties are represented by their own lawyers when buying a property in Australia.

6. Q: I don't want the house I bought in Australia anymore, how can I get the security deposit back?A: Usually, if the buyer is unable to deliver the property, the deposit under the loss contract will be given to the seller. If the bond is in lieu of a contractual deposit, it will not be retrievable. In addition, the seller is entitled to claim other damages from the buyer. It is recommended to try to resell or negotiate a settlement with the seller as soon as possible.7. Q: What kind of loan agreement will be recognized and protected by Australia and what are the requirements of the Australian government regulations?

A: As Australia follows the case law, the answer to this question will vary depending on the circumstances of each individual case. It's worth remembering that the loan agreement itself will be different. In addition, depending on how the loan agreement is set up, the borrower may also be required to pay stamp duty (depending on state requirements, this may also be enforced differently), so as to qualify as ‘admissible evidence’ in the future. Of course, in some cases, the IOU may also be part of the evidence. However, we recommend that each party hire an attorney and sign a formal loan agreement as required by each state. And you can add a "Notification Memo" to the title of the property. In addition, besides parents and children, spouses should also prepare property agreements in a timely manner to regulate the future division of property between them. In many cases, the federal court will consider the fact that a parent borrowed money to buy a home for a child and make adjustments in the distribution of the couple's assets. And disputes over loan agreements are generally considered to be within the jurisdiction of state courts.

8. Q: I am a Chinese of Japanese descent, currently living in Japan. No valid Australian visa. Looking to buy a condo to live in for a month or two each year and the property will be up for rent the rest of the time. I have also heard that you have to sell your house after your visa expires.

A: Currently, overseas buyers without a valid visa can purchase new properties or uncompleted properties in Australia. The FAC will apply for a letter of approval to buy the house. If buying a brand new property or uncompleted building, there are no specific restrictions on living or investing in it and it can be kept as the owner wishes. Buyers who have a temporary resident visa and are buying a second-hand house for their own use in Australia must sell the house when their visa expires.

9. Q: Is it legal to use the ‘nomination’ method to purchase property in Melbourne?

A: Melbourne has a ‘nomination’ method which is basically renaming. If you are transferring your name, you need to comply with FIRB regulations, which means that you need to obtain the appropriate permission to take over. That means nomination is not going to help violate the FIRB rules for buying a home overseas.

10. Q：Can I buy a second-hand house with a 3-year master's degree from the University of Melbourne? 2. Is the FIRB required for every property you look at for a second-hand home? 3. How much is the application fee (FIRB)? 4. What is the cost if you get a lawyer? 5. What happens if you rent out one or both of the rooms in a buy-to-let house

A: 1. You can buy a second-hand house for your own use during the period of your student visa, and you need to sell it within 3 months after your visa expires or you leave the country. Usually requires a contracted buyer to apply for a loan. 2. All purchases require a FIRB application, depending on the circumstances. Alternatively, you can apply for a permit to buy a house and then switch to a house-specific permit when you buy a house. 3. The application fee varies according to the price of the house. The application fee is $5,000 for houses up to $10,000. 4. The lawyer's fee is approximately $1,500 (depending on the circumstances with adjustments) 5. You may not rent, sublet, or vacate a house or you will be considered in violation of FIRB regulations.

11. Q: Is there an age limit for international students to buy a house?

A: International students are generally required to be over 18 years old to buy a property in Australia, but there is no other strict age limit. However, younger students without sufficient income may face significant obstacles if they need to take out a loan to purchase a home. Especially considering the fact that full-time students will have very limited income. Therefore, if you need to take out a loan, it is more prudent to buy a house from someone who has enough financial resources. If you are buying in your parents' name, you can buy a new home or uncompleted property in Australia after applying for permission.

12. Q: The definition of a ‘foreign person’ includes a company in which a controlling interest is held by a natural person who is not a permanent resident of Australia or a foreign company. If the company is a ‘non-Australian company’, such as a Hong Kong company in China, does FIRB need to be notified in the future if there is a change in the shareholders and/or directors of the company?

A: Overseas companies can also purchase Australian property, but need to apply to the FIRB for approval. Usually, the approval letter will contain conditions, such as the need to apply for a separate FIRB permit in the event of a material change in the company's circumstances. It depends on what type of property your company is buying (e.g., residential, commercial).

13、Q: My wife is an Australian citizen and I am a Chinese citizen. We want to buy a second-hand house in Melbourne, it is said that my wife has to be the sole owner of this house. Can I add my name into the title deed, and if I do, will I still be considered an Australian citizen to buy the property? Or overseas investment? Is it still possible to buy a used house?

A: In relation to your question, if your wife is an Australian citizen (permanent residence holders are not covered) and the two of you are in joint interest, there is an exemption for joint tenants purchasing Australian property (including second-hand property). If you are buying a home in your own name, you can only buy a new home or vacant lot and will need to submit an application to buy the home.

14. Q: I would like to inquire about how long it will take for a loan property in Australia, if not to pay the mortgage, to be forced to auction. My family bought a condo a few years ago, and my brother has been managing it in Australia, and just recently came back to say that he hasn't paid the mortgage for more than half a year. Need a lawyer's professional advice on whether you can wait until after the New Years to go back and pay it off in one lump sum.

A: This is a troublesome situation, if you are blacklisted by the bank, you will have problems getting loans and bad credit history. Please provide us with the full name, address and bank name of the customer as soon as possible and authorize us to ascertain the circumstances of the situation with the bank so that we can promptly take action to see if you can negotiate with the bank to make up the arrears.

15. Q: We are on a 457 visa, can I buy a second-hand apartment for self-occupation only, or can I buy another one?

A: 457 visa holders are allowed to buy a second-hand house in Australia for self-occupation, but not for rental. If the property is to be purchased as an investment for rental use, only uncompleted or new homes can be purchased.

16. Q: My mother-in-law is married in Australia, can we migrate there?

A: There is no direct relationship between your mother-in-law's marriage to Australia and your family's immigration. If the mother of an only child acquires Australian status, the child may travel to Australia as an accompanying family member if the child is under 25 years of age. This policy is not available if the child is married. If you and your family are interested in migrating to Australia, consider investment migration, employer sponsorship or independent skilled migration.

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