long settlement

Has anybody requested a longer than normal settlement on a property ?

I have requested a 6 month settlement on a property I wish to buy (for various reasons) and need to understand the implications such as ... (I am planning to use a deposit bond for the deposit to reduce costs before settlement)

When would stamp duty be payable ?
Would a normal contract cater for longer settlements ?
What if the house is trashed during this time ? Should I take special insurance ?

Cheers
 
Yes definately take out insurance as well as a very THOROUGH ingoing conditoon report. Do another conditon report on the property just before settment to make sure everything is the same.
 
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Has anybody requested a longer than normal settlement on a property ?
Yes absolutely.

I have requested a 6 month settlement on a property I wish to buy (for various reasons) and need to understand the implications such as ... (I am planning to use a deposit bond for the deposit to reduce costs before settlement)
Its no big deal doing it in 6 months. Developers do it all the time for 12 - 24+ months out.

When would stamp duty be payable ?
You can literally do this the day of settlement although some solicitors would like to have it done prior. I stand corrected if there is some legal requirement to do it sooner in this case of WillG's.

Would a normal contract cater for longer settlements ?
Yes, just where the contract says 42 days make it say 6 months (or the equivalent number of days)
What if the house is trashed during this time ?
Either don't settle or make an insurance claim.
Should I take special insurance ?
Just take the normal house insurance you would when you exchange contracts on any house purchase you make. You have an "interest" in the property as soon as contracts are exchanged. If you don't have it and something drastic happens and the original owners insurance lapses for example, there might be tears.

Cheers,
Aimy
 
Thanks for the responses. I had a good search but couldn't find any 'legal' requirement to pay the stamp duty at a specified time prior to settlement.

I guess a long settlement could be used as a tool to make extra $$'s in a rising market - or in the case of developers, developing the land with no money down.
 
When will stamp duty be payable?
I know when we bought our first property a few years back, we bought it off the plan in the ACT and had about a 12 month wait till it was ready for occupation. We find out a special form that I got from the ACT Revenue Office to defer stamp duty payment. You can apply for up to 12 months extension for off-the-plan. I gather it would be the same for extended settlement. The only provision was that you had to pay the stamp duty before settlement, so if settlement went through early, you would have to come up with the money earlier.
 
Stamp duty in the ACT has to be paid within three months of exchange, or 12 months if it is an 'off the plan' purchase. If not, interest starts accruing, I think it is something like 12% off the top of my head. Also just to expand on luckyone's comments - the ACT govt doesn't require stamp duty to be paid before settlement, but most incoming mortgagees will, so depending on your finance situation you will need to cough up if settlement occurs before 3 months.

Other implications not already covered above - when you get a deposit bond be aware the have 'expiry' dates and the longer you need to use it for, the more it is going to cost. Make sure your deposit bond won't expire before settlement!

(I work in ACT & NSW Conveyancing)
 
Stamp duty in the ACT has to be paid within three months of exchange, or 12 months if it is an 'off the plan' purchase. If not, interest starts accruing, I think it is something like 12% off the top of my head. Also just to expand on luckyone's comments - the ACT govt doesn't require stamp duty to be paid before settlement, but most incoming mortgagees will, so depending on your finance situation you will need to cough up if settlement occurs before 3 months.

(I work in ACT & NSW Conveyancing)

Thanks for the info. Is this information available to the general public ?
 
Long settlement is fine anytime.
You may find in a frantic market (like we are experiencing here in Cairns) that if there is multiple offers on the table, the vendor may lean towards the shortest settlement tho. So although there is no issue with a long settlement, you may miss out on some properties.

Thats my experience as an agent anyway...seems vendors want the most cash in the shortest time...fair enough too!

cheers.
 
Thanks for the info. Is this information available to the general public ?

Here ya go, I found you a link :)

http://www.revenue.act.gov.au/duties/property_purchases

Compliance Obligations/ Requirements

Purchasers or their legal representative are required to lodge the contract for the purchase of the property and pay the duty within 90 days of the liability arising, e.g. execution (signing) of the contract. You should be aware that giving false or misleading information is a serious offence.

NOTE: Your contract and a Memorandum of Transfer must be stamped by the ACT Revenue Office before the Registrar of Land Titles will place your name on the title of the property.
 
I'm not sure if it applies to other payments, as I said I can't remember off the top of my head what the rate is... 12% was just a guess ;) If your concerned just give them a call, you won't have to hold long to get an answer.
 
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