Updated form of contract deals with Foreign Resident Capital Gains Tax requirements and more.
The Law Society of New South Wales has issued an updated form of the standard sale of land contract. It is recommended that all conveyancers use the updated form of contract (known as the “2016 Edition”) from 1 July 2016.
Changes in conveyancing procedure and practice which were the catalyst for the issue of the 2016 Edition of the contract were:
- that, for contracts for a price of more than $2M, purchasers are entitled to withhold an amount towards potential foreign resident capital gains liabilities of the vendor to meet obligations in respect of the Commonwealth Government’s Foreign Resident Capital Gains Withholding Payments measure under subdivision 14D, Schedule 1 to the Taxation Administration Act 1953;
- that, for contracts settling in less than 14 days from the contract date, a vendor must provide a land tax certificate to the purchaser on exchange;
- the requirement of vendors to attach a certificate of compliance or details of non-compliance in respect of a swimming pool on the property pursuant to obligations under the Swimming Pools Act 1992; and
- legislative changes resulting in changes to a vendor’s ability to rescind an off-the-plan contract.
The 2016 Edition of the contract also clarifies clauses which first appeared in the 2014 Edition of the contract in relation to e conveyancing.
Conveyancers should be aware that the 2005 Edition and 2014 Edition of the contract is no longer being sold. Vendors and purchasers should seek advice from their conveyancer about the impacts the update of the standard form of contract may have on their sale or purchaser.