16 April 2018
Over recent years, Queensland property law has been subjected to change like never before, leaving an indelible mark on the residential market. Below, we explore some of the key changes and shifts, including the transition to a digital future, policy reform and developing case law.
2017 saw a raft of changes impact the way property transactions are carried out in Queensland:
Foreign owners of residential real estate will be required to lodge an annual vacancy fee return with the Australian Taxation Office after the end of the 12-month period (vacancy year) in which the foreign person may be liable for the vacancy fee for their property.
This has significantly increased the number of vendors required to apply for clearance certificates, but the practice of attaching these certificates to the contract of sale has quickly developed.
In short, changes, changes and more changes! We’re expecting significant reform to the property industry in Queensland:
The shift to e-conveyancing brings with it a range of issues for law firms including trust accounting, governance, resourcing and procedural changes.
Additionally, the shift to e-conveyancing is playing out in an environment where:
Reminiscent of the current Capital Gains Tax (CGT) withholding regime, the legislation will require, from 1 July 2018, vendors selling residential properties (including potential residential land) to notify the purchaser prior to settlement whether GST is to be withheld or not. If so, the purchaser can elect to either remit the GST to the ATO on or before settlement or give to the vendor a bank cheque made payable to the ATO for the amount.
There will be a two year transition period for contracts entered into before 1 July 2018 which settle before 1 July 2020.
The withholding rates will vary for full taxable sales (1/11th of the contract price) and margin scheme sales (a fixed 7% of the contract price regardless of the actual margin). The cash-flow of vendors will likely be impacted under this scheme, as money which would have typically been remitted as part of the vendor’s monthly or quarterly BAS return process will now become payable on or before settlement.
Our tax team published an article on the amending bill which has been enacted without any changes. That article can be accessed here.
A recent decision of the Privy Council builds upon a 2017 decision of the WA Supreme Court which upheld a restriction of leasing for less than 3 months within a 12 month period. This is inconsistent with the current views of the Victorian Supreme Court. In Queensland, various orders by adjudicators have held that by-laws seeking to restrict short term stays are invalid.
We expect the issue to be on the agenda in 2018.
Other termination rights which may exist are not disrupted and parties will continue to be able to terminate on other grounds such as for non-payment of the balance of the purchase price.
This stay on enforcement of so called ipso facto clauses will apply to any contract, agreement or arrangement entered into after 1 July 2018 which contains an ipso facto termination clause (other than any contract, agreement or arrangement which has been expressly excluded under the relevant regulations or by ministerial declaration). It will not however apply to any contract, agreement or arrangement entered into prior to 1 July 2018 or to any variations or amendments which occur after 1 July 2018 to contracts entered into prior to 1 July 2018. You can read more about these upcoming reforms in this recent article by our team.
 O’Connor (Senior) and others v The Proprietors, Strata Plan No. 51  UKPC 45
 Byrne v The Owners of Ceresa River Apartments Strata Plan 55597  WASCA 104
 Owners Corporation PS501391P v Balcombe  VSC 384
The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.