Transfer of Land

When you buy or sell a property, one of the most important legal documents involved is the Transfer of Land. This document is used to officially change the ownership of the land from the seller to the buyer. Understanding how the Transfer of Land works is crucial for anyone involved in a property transaction.

What is a Transfer of Land?

A Transfer of Land is the legal document that transfers the title of a property from one party to another.

It contains important information including:

• The names of the seller (transferor) and buyer (transferee)
• The legal description of the property being transferred
• The purchase price
• The date of the transfer
• Signatures of the seller and buyer (which must be witnessed)

The Transfer of Land is the official "proof of transfer" that the property has changed hands.

Without this document being lodged and registered with the appropriate government authority, the buyer does not legally own the property yet.

How Transfers of Land Work on the PEXA Platform

In Australia, property transfers are now primarily handled electronically through the PEXA (Property Exchange Australia) platform. PEXA is an online property settlement solution that allows lawyers, conveyancers and financial institutions to transact together digitally.

On the PEXA platform, all parties involved in the property transaction - including the seller, buyer, their respective legal representatives, and banks collaborate in a secure digital "workspace". The Transfer of Land is prepared electronically on PEXA. On settlement day, the Transfer of Land is digitally signed and lodged through PEXA to the Land Titles Office in the relevant state or territory.

At the same time, the purchase funds are transferred electronically to finalise the settlement. Using PEXA streamlines the settlement process, as all the legal paperwork and financial transactions happen simultaneously online. It eliminates the need for physical attendance at settlement, paperwork and bank cheques.

Paper vs Electronic Certificates of Title

Once the Transfer of Land is lodged, the Land Titles Office will register the new owner on the Certificate of Title for the property. In the past, Certificates of Title were always issued as a physical paper document. However, most Australian states have now transitioned to electronic Certificates of Title (eCTs). With an eCT, there is no physical title document the proof of ownership is stored digitally in the Land Titles Office's database and a digital copy is held by the purchaser's conveyancer.

In states that have adopted eCTs, the paper Certificate of Title is no longer issued to the new owner after a property transfer. Instead, the eCT is held electronically by the Registrar of Titles and the purchaser's conveyancer.

Both paper and electronic Certificates of Title provide the same legal proof of ownership. Having an electronic title is more secure, as it eliminates the risk of the document being lost, damaged or stolen.

Transfer Fees and Taxes

When a property is transferred to a new owner, there are fees and taxes that must be paid as part of the settlement process. The main costs are:

• Transfer registration fee - paid to the Land Titles Office to register the Transfer of Land
• Stamp duty - a tax on the transfer, based on the purchase price of the property

The amount payable for the transfer registration fee and stamp duty varies between states and territories. These costs are usually paid by the buyer.

Using the PEXA platform, the transfer fees and duties are automatically calculated and paid as part of the online settlement process. This ensures the correct amounts are paid to the relevant government authorities on time.

Conclusion

The Transfer of Land is the most important document in a property transaction, as it is what legally changes the ownership from seller to buyer. By understanding how Transfers of Land work, the differences between paper and electronic titles, and the fees involved, buyers and sellers can be well prepared during the settlement process. With the widespread adoption of electronic conveyancing platforms like PEXA, property transfers are becoming more streamlined and efficient. Buyers can have peace of mind that once settlement is completed, the Transfer of Land will be lodged promptly so the property title can be registered in their name.

For more information please contact Pearson Chambers Conveyancing on 03 9969 2405 or email at contact@pearsonchambers.com.au