Page 7 of the Contract for the Sale and Purchase of Land (2022 edition) outlines important statutory warnings for property purchasers in New South Wales. These warnings highlight critical legal, financial, and regulatory matters that may affect the transaction or ownership rights. If you're buying property in NSW, reviewing and understanding these warnings is essential for avoiding legal or financial surprises post-settlement.

1. Government Authorities and Third-Party Interests

Many different Acts of Parliament, public authorities, and adjoining landowners can affect property rights. These include:

• APA Group, ATO, Local Councils, NSW Planning Department
• Land and Housing Corporation, Public Works Advisory, Transport for NSW
• Electricity, gas, and water authorities
• Privacy laws, education departments, and telecommunications providers

What to do: If you suspect a third party has rights affecting the land (e.g. easements, access, zoning changes, etc.), tell your solicitor or conveyancer immediately.

2. Leases

If the property is leased, it may be affected by:

• Agricultural Tenancies Act 1990
• Residential Tenancies Act 2010
• Retail Leases Act 1994

The rights and obligations of tenants and landlords must be reviewed before purchase.

3. Money Owing to the Crown

Any outstanding payments to the Crown (e.g. unpaid rates, levies) will become payable on registration of the property unless prior consent is obtained.

4. Transfer Consent

Some properties require government consent before a legal transfer can occur (e.g. land subject to environmental restrictions or leases). Clause 27 of the contract contains further detail.

5. Vendor’s Insurance

Vendors must maintain insurance until settlement. If the purchaser is granted early possession, the vendor must confirm that this won’t void the policy.

6. Transfer Duty and Taxes

Most buyers will need to pay stamp duty (transfer duty). Other taxes may also apply:

• Surcharge purchaser duty for foreign buyers
• Option for First Home Buyer Choice to pay annual property tax instead

Tip: Delays in duty payments may incur interest and penalties.

7. Deposit Release Risks

If the deposit is released early (e.g. to pay off a vendor’s mortgage), the purchaser’s rights to recover the deposit may be reduced. This is especially risky if the vendor defaults.

8. Purchaser’s Insurance Obligations

Buyers should arrange building insurance as soon as they exchange contracts, especially in vacant possession or early access cases.

9. Personal Property Security

Transactions involving personal property (such as furniture or fixtures) may be affected by the Personal Property Securities Act 2009. Title and ownership should be verified.

10. Finance Responsibility

It is the buyer’s responsibility to ensure their finance is in place before settlement. Failure to complete due to lack of finance can lead to loss of deposit and other liabilities.

11. Foreign Resident Withholding

If the property’s market value is above the ATO threshold, the buyer may need to withhold and remit capital gains tax (CGT) on behalf of the vendor under foreign resident withholding rules, even if the vendor is not foreign.

12. GST Withholding Obligations

In some cases, the purchaser must withhold part of the purchase price to meet the vendor’s GST liability. This is governed by the ATO’s GST withholding rules for residential property sales.

Summary Table

Frequently Asked Questions (FAQs)

• Do I need to arrange insurance before settlement?
  Yes. Buyers are strongly advised to take out building insurance as soon as the contract is exchanged.
• Can I release the deposit early to the vendor?
  Yes, but this carries legal and financial risks. You should consult your solicitor before agreeing to this.
• What is foreign resident capital gains withholding?
  A requirement for buyers to withhold part of the purchase price and pay it to the ATO if the vendor is—or is assumed to be—a foreign resident.