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Legal considerations when applying for a mortgage in Australia

Buying a house is exciting, but few people realise the legal paperwork and processes involved until they’ve already dived straight in and started searching for a property. Here’s some handy information about conveyancing; the legal process involved in buying a house.



Buying a home requires a very detailed contract and it can look overwhelming when you first start to read it.

1.  Understanding the sale process

Each property is sold differently, and buying a house at auction is very different to a private sale. Ask a conveyancer about details of the sale of the property you’re interested in, as you don’t want to be stuck with something if you’re not 100 per cent sure about it. For example, there’s no cooling off period for auctions and once the hammer slams it’s all yours!

2.  Knowing the title type is important

Different properties have different titles. There are community, leasehold, company, Strata and freehold Torrens Titles. Each of these have different rules, but the most common one most people forget about are Strata titles. ‘Strata’ is a legal word for a multi-level building or a building divided into lots.

If you’re purchasing a town house, unit or apartment, your property may have a Strata title, which has different bylaws and levies attached. You’ll be required to pay fees to the Strata scheme, sometimes called Body Corporate Management. These fees are important to consider when you’re budgeting for buying a home, as they’re compulsory and will add more payments on top of your mortgage.

3.  Buying a house requires a detailed contract

Buying a home requires a very detailed contract and it can feel overwhelming when you first start to read it. The contract requirements differ between states and territories but essentially include everything from land transfer to types of ownership, settlement periods and everything in between. Off the plan properties require even more complex contracts, making the task of interpreting them considerably tougher.

This contract is vital, as is your understanding of the contract; it has all the information about what you’re entering into and what your obligations are. Conveyancers can help you make sense of the contract so you know exactly what you’re agreeing to.



Always enlist a qualified building inspector to review your new home and prepare a detailed report before you purchase property.

4.  Building inspections are vital

Your new home may look great, but the inner workings might not. Any DIY renovations that may not have council-approved could get you into trouble if you don’t check them before you purchase the property.

Always enlist a qualified building inspector to review your new home and prepare a detailed report. It’s also handy to get a pest control report in if you notice any signs of insect nests, or insect-related damage or wear and tear. Agreeing to the property’s condition will be part of your contract.

5.  Understanding your settlement period

As soon as you buy a house, you usually can’t move in straight away. Property settlement is when ownership passes from the seller to you. It’s a process your legal and financial representatives will manage by liaising with the representatives of the seller. Usually the period is 30 or 90 days, and once it’s over, the new home is yours.

6.  Don’t forget about stamp duty

Stamp duty is a tax attached to all real estate purchases in Australia, and it’s one thing many people forget about when buying a new home. Stamp duty differs between each state and territory and, while your legal team can help you understand the rules in your area, they do change regularly so it’s important to do your own homework too.

There are exemptions and exceptions. For example, in Victoria from July 1, 2017 first-home buyers who purchase a new or established home worth up to $600,000 won’t pay stamp duty as long as they live at the property for at least 12 months.

Buying a home involves a lot of legal paperwork, which is put in place to protect you from ending up with a home, or a situation, you really don’t want. Finding a conveyancer will help you understand your financial and legal obligations so you skip the overwhelming part and go straight to the excitement of buying a new home.

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Veda Dante

Veda Dante is an accomplished journalist, consultant and content creator who has nearly 30 years’ experience writing about everything from tourism, hospitality and health to architecture, pools and luxury goods. When she’s not producing copy for clients, this self-confessed word nerd is usually writing and photographing the Byron Bay region for her blog

The opinions expressed in this article are the opinions of the author(s) and not necessarily those of Homeloans Ltd.