Part of the government’s response to the economic downturn caused by Covid-19 has been to encourage spending in certain sectors. The building industry have been given a lifeline via the Homebuilder scheme, which encourages eligible home owners to renovate their existing home, buy a new home off the plan or build a new home.
The scheme was to finish at the end of 2020, but has now been extended to 31 March 2021 with an amended grant amount and conditions.
The grant you will receive depends on when you entered into your building Contract and applications must be submitted by 14 April 2021. First Home Buyers are also eligible for this grant. Construction must begin within 6 months from the date of the building Contract and you will need to live in the property for at least 6 months after completion.
$25,000 Grant – For building contracts entered into between 04/06/20 and 31/12/20. The value of the house and land must be under $750,000 if you are building. For renovations your contract must be between $150,000 and $750,000 and the value of the existing house and land must be under $1.5 million.
$15,000 Grant – For building contracts entered into between 01/01/21 and 31/03/21. The value of the house and land must be under $950,000 if you are building. For renovations your building contract needs to be between $150,000 and $750,000 and the value of the existing house and land must be under $1.5 million.
To get the grant you must be an Australian citizen, over 18 and earn less than $125,000 p/a as an individual and $200,000 p/a as a couple. Permanent residents and visa holders are not eligible.
For new builds, the Grant will be paid once the foundations are laid and the first progress payment has been made. For renovations, it will be paid once payments over $150,000 have been made to the builder.
Still confused about whether you are eligible for these grants? Contact the Property Law Team at Everingham Solomons because Helping You is Our Business.
If you have bought or sold a property in the last few years, then you may have had a conversation with your Solicitor about postponed rates. If not, you probably haven’t heard of them.
The truth is postponed rates are not generally well understood, but there are consequences if they are not dealt with appropriately during a sale or purchase of property.
So what are postponed rates?
Postponed rates are a charge that Councils can levy over property.
Where you have land that is zoned commercial, industrial, residential flat building or it is permitted under a plan to be further subdivided, this land attracts higher Council rates. If you use the land for residential purposes only, you may apply to have part of these rates postponed, and essentially pay the residential rate for the land. The part you can apply to be postponed, is the difference between the residential rate and the higher commercial/ industrial/ other rate.
If the postponement is granted, Council will defer payment of the difference between the two rates for each year plus interest, and will continue to defer the difference every subsequent year for a period of five (5) years. This amount is what is known as postponed rates.
These rates are on a 5 year cycle, so that when Council levies the new year’s rates and interest, the previous 5th years postponed rates drops off. This means that there is a maximum of five (5) years’ worth of postponed rates which are levied against the property.
For example, Jo owns a block of commercially zoned land. Jo advises Council that the land will only be used for residential purposes and applies to Council to have the difference between the commercial rates and the residential amount postponed. If approved, Council will postpone part of that years rates and will continue to do so for five (5) years, so essentially Jo will pay only the residential amount of rates instead of the commercial amount as the balance has been postponed. Jo will have to pay the deferred rates when he no longer solely uses the property for residential reasons.
Postponed rates are not generally due and payable, unless the land use changes back to commercial, industrial etc.
When a property is sold with postponed rates levied against it, this becomes a bit of an issue. Is the Vendor liable to pay these rates that aren’t due? Should the purchaser have to take on the potential liability for them?
Legislation determines that postponed rates are a charge against the land, much like a mortgage and must be discharged (by making payment to Council). Alternatively, case law suggests that an alternative to payment to Council is that an amount equal to the postponed rates is retained in a Trust account for the benefit of the Purchaser for a period of 5 years. If Council deems that the rates are due and payable in this 5 year period, then the money held in trust is used to make payment to Council. If the postponed rates are not levied in the 5 year period, then the money is returned to the Vendor. Alternatively there may be options to create a special condition in the contract which outlines what is required in the event of postponed rates applying to a property.
It is important that you receive the right advice and address the issue of postponed rates upfront as the consequences could be costly.
At Everingham Solomons we have an Accredited Property Law specialist on hand to deal with complex property matters because Helping You is Our Business.
The State Revenue Legislation Further Amendment Act of 2020 has received Royal Assent.
In short, the Act indicates that any discretionary trust or family trust or testamentary trust that owns or will purchase residential property, may be subject to surcharge land tax and surcharge stamp duty.
This means that if a discretionary/family/testamentary trust is purchasing residential property, it will be charged an additional 8% of the market value of a property by way of surcharge stamp duty.
In addition, surcharge land tax over and above the standard rate, is increased by 2% on the unimproved value of the land.
Land tax is particularly nasty as it is levied each year on the 31 December.
Further there is no threshold amount when a trust is involved and land tax is payable on the entire unimproved value of the land annually.
If you have a discretionary/family/testamentary trust, it is more than likely you will receive a letter from Revenue New South Wales indicating that a trustee of a discretionary trust/family trust is deemed to be a foreign person and potentially subject to such additional surcharge taxes.
There is, however, a way to avoid the surcharge.
This involves reviewing the terms of the Trust Deed and if appropriate, amending the trust deed (provided it has an amendment power) to exclude current and future foreign person beneficiaries and ensuring that such amendments to the trust deed are irrevocable.
If you wish to take advantage of that opportunity however, you must make the amendment prior to the 31 December 2020.
If you do not make that change to your trust deed, your trust will not be able to avoid the surcharge duties and taxes.
Revenue New South Wales are regularly requesting copies of trust deeds to check whether those amendments have been made.
If you have a discretionary/family/testamentary trust and own or intend to own residential property, you need to get urgent legal advice.
At Everingham Solomons we have the expertise to assist you because Helping You is Our Business.
Renewable energy is booming in Australia. Data recently released by the Clean Energy Regulator suggests 6.3 gigawatts of total renewable energy capacity is expected to be delivered in 2020 – roughly equivalent in capacity to four large coal plants.
Wind farms and solar farms are usually located on cleared primary production land. In addition to wind turbines or solar arrays, developers also require certain area of land for access roads, transmission line easements and electrical substations.
Typical Documents
If a landowner is approached by a developer, the landowner will be provided with an Initial Licence Agreement (optional) and an Option Deed during the early stages of development, leading to an eventual Lease Agreement and/or Contract for Sale of Land once the development is approved by the authority and the option is exercised by the developer.
1. Initial Licence Agreement is a simple agreement allowing the developer site access to conduct preliminary investigations and feasibility studies. Depending on the project’s needs, not all developers sign this document with landowners.
2. Option Deed gives the developer an option to lease and/or purchase part or whole of the land from the landowner for construction and operation of the project. During the option period the landowner is paid an option fee.
3. After the project is approved and before construction commences, the option will normally be exercised and the developer will enter into a Lease Agreement with the landowner.
4. Where necessary, the developer may also exercise its option to purchase part of the land for construction of a substation, in which case the developer will enter into a Contract for Sale of Land with the landowner.
The above documents are complex and lengthy. Further, developers will usually negotiate the Option Deed and other documents at the same time before entering into the Option Deed, with the Lease Agreement and Contract for Sale of Land as attachments to the Option Deed.
Everingham Solomons have experienced Solicitors who have represented landowners in wind/solar farm projects. Please do not hesitate to contact us for any legal advice you may need in relation to a renewable energy project, because Helping You is Our Business.
There have been amendments as to what water efficiency measures a landlord needs to undertake under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020
Before a landlord is able to pass on water usage charges to the tenant, the residential property must be separately metered, meet the water efficiency measures prescribed by the Residential Tenancies Act, and the charges must not exceed the amount payable by the landlord (according to the water supplier’s bill or other evidence).
The changes provide additional water efficiency measures, including all taps and toilets on the property need to be checked at the start of a tenancy so any leaks are fixed. Taps and toilets must also be checked whenever any other water efficiency measures are installed, repaired, upgraded or any leaks fixed. This requirement applies to existing and new tenancy agreements from 23 March 2020.
From 23 March 2025, all toilets in rented properties must be dual flush with a minimum three-star rating in accordance with the Commonwealth Water Efficiency Labelling and Standards (WELS) scheme. The WELS scheme uses a rating system to help consumers make informed choices about the water efficiency of products they buy.
Landlords who intend to replace or upgrade existing toilets in their property should consider installing dual flush toilets with a minimum three-star WELS rating to meet the water efficiency requirements by 23 March 2025.
If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
ReThere are new break fees payable by a tenant who wishes to break a fixed term lease under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020
Mandatory break fees apply to all fixed-term agreements of 3 years or less, when a tenant ends the agreement early. This applies to agreements that are entered into from 23 March 2020.
The break fees are:
• 4 weeks rent if less than 25 per cent of the agreement has expired
• 3 weeks rent if 25 per cent or more but less than 50 per cent of the agreement has expired
• 2 weeks rent if 50 per cent or more but less than 75 per cent of the agreement has expired
• 1 weeks rent if 75 per cent or more of the agreement has expired
For example:
• If 7 months of a 12 month tenancy agreement (or 58 per cent) has expired, a tenant would need to pay a fee equal to 2 weeks rent to the landlord to end the agreement early
• If 2 months of a 6 month tenancy agreement (or 33 per cent) has expired, the tenant would need to pay a fee equal to 3 weeks rent to the landlord to end their agreement early
If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
There have been amendments as to what constitutes damage and the rules regarding removing modifications under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020
Tenants are responsible for any damage they cause to the property.
At the end of the tenancy, a tenant is responsible for leaving the property in the same condition as at the start of the tenancy, except fair, wear and tear. This includes making sure any alterations, additions or renovations are removed and also fixing any damage caused to the property. A tenant can choose whether to remove any ‘fixtures’ they have installed, provided they repair or compensate the landlord for any damage caused by removing the fixture. A tenant cannot remove any fixtures if the landlord paid for them.
If tenants do not remove the alterations, additions or renovations to a satisfactory standard, or the work is likely to adversely affect the landlord’s ability to let the premises to other tenants, the landlord may apply to the NSW Civil and Administrative Tribunal to seek compensation from the tenant for the costs involved.
If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
There have been amendments as to what constitutes alterations of a ‘minor nature’ under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020.
The new Regulation lists the kind of fixtures, alterations, additions or renovations that are ‘minor’. Some examples are:
• securing furniture to a non-tiled wall for safety reasons
• fitting a childproof latch to an outdoor gate of a single dwelling, installing child safety gates inside the property or window safety devices
• installing/replacing an internal window covering e.g. curtains, removable blinds, installing cleats/cord guides to secure blind/curtain cords
• installing a wireless removable outdoor security camera
• applying shatter-resistant film to window/glass doors
• planting vegetables, flowers, herbs or shrubs (shrubs that don’t grow more than 2 metres) in the garden if existing vegetation/plants do not need to be removed
• installing hand-held shower heads/lever-style taps to assist elderly or disabled occupants. A landlord will require a qualified person to carry out this installation.
• installing a phone line/internet connection. A landlord may require a qualified person to carry out this installation.
Tenants need the landlord’s written consent to install fixtures, make alterations, additions or renovations. The tenant must pay for the fixture they install or for any alteration, renovation or addition to the property they make, unless the landlord agrees otherwise. If the tenant’s request for a fixture, alteration, addition or renovation is of a ‘minor nature’ then the landlord must not unreasonably withhold consent or to place conditions on the consent.
The above changes do not apply if a property is listed on the loose-fill asbestos insulation register, or is a heritage item. Some restrictions and exclusions also apply to property in a strata scheme, residential land lease community, or to social housing properties.
If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
There are new smoke alarm obligations for landlords and tenants under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020.
Landlords need to ensure smoke alarms installed in a rented property are in working order.
Under the new Regulation, a landlord must repair/replace a battery-operated or hardwired smoke alarm and:
• carry out annual checks to ensure all smoke alarms installed at the property are in working order
• replace a removable battery in all smoke alarms in the period specified by the smoke alarm manufacturer (for a removable lithium battery) or otherwise annually
• repair/replace a smoke alarm that is not working within 2 business days of becoming aware that it is not working
• provide more than an hour’s notice to the tenant to replace or carry out repairs to the smoke alarm
• replace a smoke alarm with a new smoke alarm within 10 years from the manufactured date, or earlier if specified by the smoke alarm manufacturer.
If the landlord has not carried out their obligations (penalties apply if fail to comply), a tenant is able to do so. If the tenant carries out the replacement of a removable battery or a removable back-up battery, they must:-
• notify the landlord that tenant will replace the battery
• replace the battery within 2 business days of the notification
• notify the landlord within 24 hours of replacing the battery in the smoke alarm
A tenant who replaces a removable battery is entitled to reimbursement for repair/replacement of the smoke alarm battery by the landlord within 7 days after giving written notice to the landlord and must provide:-
• details and costs of the repairs/replacement,
• copy of receipt/invoice paid by the tenant
• receipt to be given to the landlord as soon as practicable after the repair/replacement was carried out
If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
There are new minimum standards to clarify “What premises are fit for habitation” under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020.
Currently landlords are required to provide a rented property in a reasonable state of cleanliness and ‘fit for habitation”. The changes introduce 7 minimum standards which clarify what ‘fit for habitation’ means.
To be fit to live in, the property must (as a minimum):
1. Be structurally sound
2. Have adequate natural or artificial lighting in each room, except storage rooms or garages
3. Have adequate ventilation
4. Be supplied with electricity or gas, and have enough electricity or gas sockets for lighting, heating and other appliances
5. Have adequate plumbing and drainage
6. Have a water connection that can supply hot and cold water for drinking, washing and cleaning
7. Have bathroom facilities including toilet and washing facilities that allow users’ privacy
Landlords need to ensure their rented properties meet the minimum standards to be fit for habitation. Rented properties are already required to be fit for habitation and should already meet these basic standards.
The property could have other issues that may make it unfit for a tenant to live in, even if it meets the above 7 minimum standards. Before the property is rented out, the landlord or the agent should take steps (such as make repairs) to make sure the property is fit to live in.
These standards must be maintained throughout the tenancy (by making repairs).
If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
Part of the government’s response to the economic downturn caused by Covid-19 has been to encourage spending in certain sectors. The building industry have been given a lifeline via the Homebuilder scheme, which encourages eligible home owners to renovate their existing home, buy a new home off the plan or build a new home.
If you have bought or sold a property in the last few years, then you may have had a conversation with your Solicitor about postponed rates. If not, you probably haven’t heard of them.
The State Revenue Legislation Further Amendment Act of 2020 has received Royal Assent.
Renewable energy is booming in Australia. Data recently released by the Clean Energy Regulator suggests 6.3 gigawatts of total renewable energy capacity is expected to be delivered in 2020 – roughly equivalent in capacity to four large coal plants.
There have been amendments as to what water efficiency measures a landlord needs to undertake under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020