What do I need to include in the contract for sale?

The law says that all sellers must include certain information in the contract for sale and must also make certain promises (known legally as ‘warranties’) about the property they are selling. These obligations are known as the Vendor Disclosure Requirements.

The most common documents you may need to include with the contract are:

  • A zoning certificate. This is issued by local council and shows planning controls and other things which may affect the property, such as any proposed road widening
  • A drainage diagram. This shows the location of any sewer lines
  • A title search confirming that you own the property
  • Copies of any documents creating easements, rights of way, restrictions or covenants
  • Certificate of compliance or non-compliance for any swimming pool
  • Certificate showing whether or not land tax is owing on the property.

What if I am selling a strata title property?

Most apartments in NSW are strata title. If you are selling a strata title property, you will also need to include:

  • A copy of the property certificate for the lot and common property
  • A copy of the strata plan showing the lot
  • A copy of the by-laws affecting for the strata scheme.

You should also let your solicitor know if any special levies have been levied or are likely to be levied.

Duty, GST and CGT

In NSW, only buyers have to pay duty on a property transaction. However, there may be other taxes you will need to pay, particularly if you are selling an investment property.

GST does not generally apply to the sale of residential property. But you will be liable for GST if the property you are selling has a commercial use (and in some other limited circumstances). The sale of new residential premises and potential residential land may be subject to the GST withholding requirements. Where it applies, the purchaser withholds an amount from the contract price and pays that amount to the Australian Taxation Office.

Unless you purchased the property before 1985, the sale of an investment property will usually attract Capital Gains Tax (CGT).

However, you do not usually have to pay CGT on the sale of your own home. That said, the law of CGT is complex so you should see your solicitor if you are in any doubt about whether or not you will need to pay CGT.

If the price of the property is $750,000 or more, and you are an Australian resident, you will need to provide the purchaser with a clearance certificate from the Australian Taxation Office. Your accountant can help you comply with this requirement if it applies. If you do not provide the clearance certificate, under the foreign resident capital gains withholding regime your purchaser will be required to forward one-tenth of the purchase price to the Australian Taxation Office.

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