16/07/2008 - 22:00

Changes to land sale laws

16/07/2008 - 22:00

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Changes to legislation governing land sales may soon prevent developers from pre-selling lots unless conditional approval of the sale is secured.

Changes to land sale laws

Changes to legislation governing land sales may soon prevent developers from pre-selling lots unless conditional approval of the sale is secured.

The draft changes, which were first proposed in early 2007, will only apply to lots of land, rather than apartments or strata title properties.

Property Council of Australia WA policy and communications manager, Lino Iacomella, said there was a broad consensus that pre-selling should be restricted to lots that had conditional approval for sale.

But, he said the changes would have less impact in the current property market than they would have had last year.

"At the time [the regulations were drafted], it was a very different market and there was a lot more pre-selling happening," Mr Iacomella said.

"The government said there were concerns with delays in the number of lots being produced and some instances of lots coming onto the market even after the expiry of contracts [to purchase]."

Mr Iacomella said the new system reflected a balanced approach to the issue. "We were concerned at the definition of a lot, and that it may apply to apartments, but we've been assured by government that it will be mainly land lots that the regulations apply to, rather than strata title," he said.

"We were pleased that government didn't take a stronger line, which may have prevented or further restricted pre-selling."

Meanwhile, stamp duty reforms applying to the sale of properties off the plan have come into effect this month, which are likely to result in fewer properties being on-sold.

Under the new legislation, buyers that on-sell properties bought off-the-plan must notify the Office of State Revenue within two months of their new agreement being signed.

Property owners who fail to lodge their on-sale agreement may be forced to pay a fine of $20,000, as well as three times the amount of stamp duty avoided.

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