Buying a property in Australia or New Zealand will probably be one of the largest and most significant purchases you will ever make. It can be a complicated business with various essential checks required to help ensure that all is in order with the property, including the legal status of the dwelling. Thankfully a good solicitor can help to guide you through the whole transaction process.
Although the buying process is not complicated, it is worth noting that the policy of the Australian government is something of a conservative one. You are strongly advised to seek the assistance of a lawyer who understands Australian law and the process of buying property in the country.
If you are not an Australian citizen, or permanent resident, it is highly likely that you will need to gain consent from the Foreign Investment Review Board (FIRB) before you can buy a property in Australia.
The FIRB is an Australian governmental body which places certain restrictions on the types of property that non-residents can acquire.
You can get your Australia property search underway as and when you are ready, but it would be unwise to proceed to exchange of contracts before receiving approval from FIRB. It typically takes them between 40 and 130 days to give an answer once an application has been submitted.
You should only ever proceed to exchange of contracts if the contract specifically states that the property sale is ‘conditional’ to receiving approval from FIRB. The contract should also include any condition of loan or mortgage.
When signing the initial contract, you will have to pay a deposit of around 10%. A cooling-off period may apply after the exchange of contracts.
‘Settlement’ will be completed, once all necessary property/legal check have been made, home loan – if applicable – secured, FIRB consent granted and final contract signed.
You are less likely to have to seek permission from the FIRB if you are planning to purchase a new-build property.
If your spouse is an Australian national, even if he or she lives away from Australia, FIRB approval will not be required.
Just like in Australia, the process of buying property in New Zealand is quite straightforward, but legal guidance from a lawyer is still crucial.
When you have found a property you like, you then put in a written offer, usually through the selling agent. A verbal offer to purchase a property is not considered to be legally binding in New Zealand.
Your offer must be completed in writing using a Sales & Purchase Agreement, and is usually made conditional on factors such as mortgage finance, title searches and building reports to ensure that you are protected should anything go wrong with your acquisition.
When all the terms of the sale, including the purchase price, settlement and possession dates and any other conditions you may need, have been agreed to by the purchaser and the vendor, a contract will be signed.
Once the Sales & Purchase Agreement is signed and dated, you will be required to pay a deposit of around 10% of the purchase price, which your solicitor will hold for you.
This contract is legally binding, and therefore neither party can pull out of the transaction once it has been signed, as long as all the conditions of the contract are met.
Once all the conditions of the contract have been met to the satisfaction of both parties, the sale is then considered to be unconditional and is fully binding.
At this point, your deposit is normally released to the owner and will not be refunded should you fail to settle for any reason. Any major delay in settlement caused by you could potentially lead to interest having to be paid on the remainder of the purchase price.
If you want to purchase a home in Australia or New Zealand but are finding it hard to spend the necessary time out there, you could potentially take out a Power of Attorney. This would allow the legal process to continue without you actually being in Australia or New Zealand yourself. You can nominate a trusted individual who will represent you in specified transactions but this must be recorded as a legal document.