The Definitive Guide to Australian Property Law Michael Quinn ISBN 978-0-6487930-2-1

THE DEFINITIVE GUIDE TO AUSTRALIAN PROPERTY LAW MICHAEL QUINN Published in Sydney The Quinn Group (Australia) Pty Ltd ACN: 078 526 860 ABN: 86 078 526 860 PO Box 161 Sutherland NSW 1499 Australia 1300 784 667 (1300 QUINNS) [email protected] www.quinns.com.au National Library of Australia Cataloguing The Definitive Guide to Australian Property Law Michael Quinn ISBN 978-0-6487930-2-1 © 2021 The Quinn Group Australia Pty Ltd This publication is copyright. Other than for the purposes of and subject to the conditions under the Copyright Act, no part of this publication may in any form or by any means (electronic, mechanical, micro-copying, photocopying, recording or otherwise) be reproduced, distributed, stored in a retrieval system or transmitted without prior written permission of the publisher. For permission requests, write to the publisher addressed: ‘Attention: Permissions Coordinator” at the address below. The Quinn Group (Australia) Pty Ltd PO Box 161 Sutherland NSW 1499 Australia Also by the Quinn Group The Definitive Guide to Selling your Business Everything you Need to Know about Employment and Contracting in Australia The Definitive Guide to Wills and Estates in New South Wales Disclaimer No person should rely on the contents of this publication without first obtaining advice from a qualified professional person. This publication is sold on the terms and understanding that: (1) the authors, consultants and editors are not responsible for the results of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication; and (2) the publisher is not engaged in rendering legal, accounting, professional or other advice or services. The publisher and the authors, consultants and editors, expressly disclaim all and any liability and responsibility to any person, whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication. Without limiting the generality of the above, no author, consultant or editor shall have any responsibility for any act or omission of any other author, consultant or editor. THE DEFINITIVE GUIDE TO AUSTRALIAN PROPERTY LAW MICHAEL QUINN EDITED BY ISABELLE WILLIAMS Contents ______________________________________________________________ Page Number Acknowledgements ……………… 9 About the Author ……………… 10 Introduction ……………… 11 1. The Types of Title and the Types of Housing ……………… 12 2. The Types of Property Ownership ……………… 20 3. The Types of Property Zoning ……………… 23 4. Property Purchasing: Before you Buy ……………… 27 5. The Property Purchase: How it Works ……………… 32 6. Investment in Property ……………… 36 7. Positive v Negative Gearing ……………… 45 8. Rental Properties ……………… 47 9. Taxes on Property – Federal and State ……………… 56 10. Mortgages ……………… 59 11. ATO Guidance on Property Development ……………… 65 12. Property Sales: Before you Sell ……………… 80 13. Non-residents and Property Purchases ……………… 83 Conclusion ……………… 87 Glossary of Terms ……………… 88 References ……………… 89 Acknowledgments I would like to thank the many wonderful people who contributed to the creation and publication of this book; especially, our Editor and Paralegal, Isabelle Williams, Paralegal, Damian Chan, and Accountant, Elena Ivanchenko. Thanks also to those clients and staff who made valuable suggestions regarding additions to the book. 9 About the Author Michael Quinn ____________________________________________________________ With over 30 years’ experience as a Chartered Accountant and over 25 years as a practising Lawyer, Michael Quinn is a Director and co-founder of The Quinn Group. His clients are predominantly private businesses, both Australian and foreign owned, as well as high wealth individuals and their families. Michael advises domestic and foreign clients on federal, international and state tax matters, and has a special interest in property, taxation, trusts, estate and succession planning. He accepts referrals from other accountants, lawyers, financial planners and finance brokers. The Quinn Group is a firm of Accountants, Lawyers, Financial Planners, and Mergers and Acquisition specialists with 4 locations throughout Sydney. They have clients throughout Australia and overseas; specialising in assisting clients with their tax, accounting and legal needs. Qualifications and Memberships Bachelor of Commerce, University of NSW (UNSW) ⬧ Bachelor of Laws, University of Technology, Sydney (UTS) ⬧ Master of Applied Finance, Financial Services Institute of Australasia (FINSIA) ⬧ Master of Business Administration (AIBA) ⬧ Practising Lawyer ⬧ Practising Chartered Accountant ⬧ Registered Company Secretary ⬧ Registered Tax Agent ⬧ Registered Company Auditor ⬧ Registered External Examiner – Law Society of NSW ⬧ Member – Law Society of NSW ⬧ Fellow – Australian Institute of Company Directors ⬧ Chartered Tax Advisor 10 Introduction ______________________________________________________________ Property refers to anything that has value and is capable of being owned. It refers to people’s rights concerning physical and non-physical things. There are two main types of property: personal property and real property. This book will discuss the physical ‘things’; land and it’s attachments, otherwise known as real property. In this easy to understand overview, we will dissect the law surrounding real property, answering your common questions. Notably, in property law, there is a distinction between possession and ownership. Ownership is more permanent than possession, can be private, collective or common and involves having unlimited and uncontrolled rights over a property. When we discuss ownership or ‘owning’ something in this book, this is what we mean. Possession by comparison is physical control over a property with limited rights and impermanence. We have included a glossary of terms in order to help you understand terms such as these. Please note that the information contained within this book is as current and up to date as of its’ date of publication. Should you have any questions or queries in relation to this book or its’ content, please feel free to contact the Quinn Group via our website: quinns.com.au or at [email protected]. 11 CHAPTER ONE The Types of Title & The Types of Housing In this chapter, we will examine: • Torrens Title • Leasehold Title • Strata Title • Old System Title • Community Title • Company Title • Types of Housing _________________________________________________________ In understanding real property law, we must first understand the types of title. A title is essentially a way of registering the ownership of property. We have listed them below for your reference. Type of Title Description Torrens Title The most common type of title. The Torrens Title provides a single document (Certificate of Title) and is registered with the State Government. It is typically used for land and houses. Leasehold Title Land that is leased to a party by the State. All mineral rights are reserved to the State. Strata Title Allows for individual ownership of a lot or unit whilst sharing common property ownership for the common grounds on which the lot or unit is built. Old System Title A system of registration that uses a separate document for every land dealing. There can be complex chains of documents. Community Title Relates to property where two or more lots share common property (such as a driveway). It usually references large estates or retail outlets. Company Title When companies own the property. 12 Torrens Title The Torrens system of title (Torrens Title) is now the most widespread type of title in Australia that revolutionised property registration. It was first introduced in 1858 in South Australia. It has since been adopted by many nations and jurisdictions across the planet. In Australia, it is the primary register for land and is governed by the Real Property Act 1900. Torrens Title was introduced and created by Robert Richard Torrens for the South Australian land title registry when he was appointed as a Registrar. Torrens based his system on the methods used to insure shipping, using a single register for each land holding and updating it with each new transaction. This is opposed to the other old system title method, that involved a sea of paperwork recording each and every transaction on the property. The conclusivity of the Torrens Title System enables something known as ‘title by registration’. Once registered on the Torrens Title Register, you become the owner of the property to the exclusion of all others; making registration vital. Components of the Torrens Title System come in a set of three parts: the Old Form Bound Register, the New Form loose leaf Register and the Integrated Titling System (ITS). From 1863 till 1961 the Old Form Bound Register collected Torrens Titles. It was in a larger paper format, filed in volume/folio order with 250 folios to each volume with colour-coded sections. From 1961 onwards, the new form loose leaf Register was utilised. It involved (as its name suggests) loose leaf files only accessed by photocopy. The third and most modern register for Torrens Title is now the Integrated Titling System. As the world’s first computerised Torrens Title System, it includes minimal diagrams and shows details of previous dealings under the automated system and origin of title from a ‘historical search’ function. Further, a Certificate of

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