Selling Property? Read our Sellers Guide
Selling your family home
The reasons for selling your family home can be varied and are individual for each of us. From getting a job in a new state or country, moving to be closer to family, downsizing, upsizing, relationship breakdown or even wanting a tree change – there are a number of things to consider when putting your property on the market.
Selling commercial property
When you sell a commercial premises, you will likely have a capital gain or a capital loss. While individuals and trusts may be eligible for a discount on capital gains tax, you will need to consult your financial advisor or accountant to discuss the implications for your circumstances. Note that you may also be liable for GST on the sale price. You can read more here: https://www.ato.gov.au/General/Property/Property-used-in-running-a-business/Selling-commercial-premises/
Selling investment property
If you’re selling an investment property, the main things to know about are selling with a tenant in place and that you may be liable for capital gains tax. Below we discuss selling a rented property and the state government requirements for this. We talk about the capital gains tax implications, and being aware of the implications and costs involved. Your accountant or financial advisor will be best placed to assist you and provide advice for your specific circumstances.
Selling a rented property
If you have tenants in your property, you will need to consider the requirements for selling your property tenanted as outlined in your state. In Queensland, as at 1 October 2022 there have been changes to rental laws and more information can be found here about ending a tenancy agreement: https://www.rta.qld.gov.au/podcast/selling-a-rental-property
Cost of selling property
Aside from the potential capital gains or GST expenses, the costs of selling a property include the commission to the real estate agent, conveyancing or legal fees, marketing expenses, possible staging fees, and possible lender fees if there is an early exit fee on payout of your mortgage.
Real estate agent commission fees are on average between 2 – 2.5% of the sale price in Queensland https://www.realestate.com.au/advice/real-estate-agent-commissions/#qld plus marketing fees which are generally by negotiation or agreement as part of your sales strategy.
Conveyancing fees should be between $800 and $2000 and ELDAD Property Group can assist you in finding the best fit for your needs in your area.
Lender fees usually fall between $150 and $1500 and styling costs can be as much as $6000 depending on the extent of the service that you require.
Selling property stamp duty
Stamp duty is paid by the purchaser of the property and is calculated as the greater amount of a percentage of the purchase price or a percentage of the market value of the property. It is generally paid at settlement by the buyer, and they do not receive title to the property until it is paid.
Selling jointly owned property
When two or more people purchase a property together, you will need to decide if the property is to be held as joint tenants or tenants in common. In the case of joint tenancy, while all tenants have their names on the title as co-owners, upon the death of one of the owners, the shares in that property automatically go to the other joint tenant – this is known as survivorship, and this overrides the Will. Joint tenancy is suited to a couple that intends to live together permanently and want their share of the property to go to their partner upon their death. If one joint tenant wants to sell their interest in a property, but the others do not, this is where problems can arise, and it may be necessary for the courts to be involved.
Conversely, if tenants in common own a property, then each person has a percentage share in the land proportion and on the death of one of the tenants, the deceased person’s shares get distributed as per their Will.
Tax on selling property
If you are selling your family home or principal place of residence, then there is no tax payable on the sale of your property with some exceptions – it’s best to get advice from your accountant. However, capital gains tax is applicable if you are selling an asset, other than a principal place of residence. You can get more information here https://www.realestate.com.au/advice/capital-gains-tax-cgt/
Selling mortgaged property
It’s common for properties to be sold before the mortgage on them is paid off. When you have a home loan, the lender has a mortgage over your property, and this appears on the property title and means that they have a formal interest in that property and can sell it to recoup money lent if the loan can’t be paid.
When you sell your property, the lender obviously loses their right to sell that property and when money is repaid on the mortgage, this is called a discharge of mortgage. You will need to notify your bank and arrange for the mortgage to be discharged prior to property settlement. The process can take two or three weeks, so get in touch with your bank early to ensure that settlement is not help up. There may be fees involved in discharging a mortgage, often referred to as break costs, but your lender will be able to notify you of what these are.
https://www.realestate.com.au/home-loans/guides/what-happens-to-your-mortgage-when-you-sell
Selling your house at auction
Selling your house at auction is a strategy that you will need to discuss with your Real Estate Agent. Auctions are mainly suited to properties that have unique features and are in high demand as they can help drive the selling price up and create scarcity amongst bidders. ELDAD Property Group can help you determine if auction is the best strategy for selling your property.
Selling a deceased estate
The process for selling a deceased estate is similar to other sales, with a few extra considerations. Although the laws are different in each state, generally the executor of the Will becomes the owner of the property and is responsible for ensuring that all laws and processes are followed and all debts against the property are paid. This is often a stressful time for families, so it might be a good idea to seek assistance from both your real estate agent and a solicitor depending on your level of confidence. Read more here… https://www.realestate.com.au/advice/how-to-sell-a-deceased-estate/
Selling to a property developer
Don’t be afraid of selling your property to a property developer. However, it is important to note that just because a developer might be interested in your property, doesn’t mean that it will be worth more than market value. Developers are in the business of making money, but they also know the value of a property and what it is going to cost them to develop the land and on sell the project. It pays to talk to your Real Estate Agent and have the correct information to understand exactly what your property is worth. ELDAD Property Group can help you and connect you with the right buyers.
https://propertyadvice.com.au/selling-to-a-developer-read-this-first/
You can learn more about the selling process by reading our article on Selling Property? What’s the Process?. For a confidential discussion and appraisal, please contact ELDAD Property Group.
