The end of year rush is something we’re all familiar with. When it comes to buying and selling property, there’s much more to consider than just “getting it done” over the summer break.
The Christmas and New Year holidays are a welcome time of year for us all. It’s a time to gather with loved ones to reflect and celebrate the year that was. It’s also a busy time of year for buying and selling properties, as people have more time to make decisions and want to get things finalised before the beginning of a new year.
There are many things to consider when it comes to property purchasing and settlements over the Christmas and New Year holidays. We’ve gathered some crucial dates and impacts that you should consider when buying or selling a property around this time.
Completion / Settlement dates
Olivia Parsons, NSW State Manager at Conveyancing.com.au, says that the timing of your completion and settlement dates is vital in the successful closure of a sale.
“The date for Completion/Settlement is usually 42 calendar days, however this can get significantly blown out if the settlement date falls within a closure period”.
Closure periods usually begin around 21st or 23rd December and end either 12th or 20th January and it means you cannot settle during this time.
“Beware of settlement delays which then roll into the closure period – you may be charged default interest (8% – 10% p.a. on the amount owing at settlement), calculated daily for the duration of the closure period.”
This can often trip up keen buyers at this time of year. If your settlement rolls into a new calendar year, you might be liable for additional fees and taxes, so ensuring your settlement is clear of the closure period over the holidays could save you thousands.
Cooling off periods
While the settlement period is calculated in calendar days, the cooling off period is counted in business days. Olivia explains that from the seller’s perspective, you may have to wait longer than you expect over the Christmas holidays.
“From a vendor’s perspective, this may be longer than usual. Extensions to cooling off [periods] are more frequent as the banks are having a bottleneck of loan applications at this time of year”, she explains.
“If you haven’t exchanged on a Contract of Sale yet, it is unlikely you will be able to settle in 2020”, at least in New South Wales or Victoria.
Olivia says, “you may be liable to pay for the entirety of the Vendors Land Tax if you cause settlement to occur in the next calendar year”.
If you want to negotiate a quick settlement over the New Year’s holiday break, you can speak with your bank and broker, however it comes with some strong recommendations.
Our NSW State Manager, Olivia Parsons, says, “engage a firm that does a written contract review”. Having legal advice written down either on paper or in an email is crucial to your decision making, as it allows for you to sit and digest the advice you’ve been given, and revisit areas you need to follow up.
“It’s possible that over the closure period you’ll have limited calendar days available when you can seek legal advice on your contract, due to the public holidays”, Olivia notes.
The importance of getting your settlement finalised often supersedes seeking the correct and significant legal advice and review at this time of year. Olivia recommends always seeking the right legal advice for your settlement, to make sure you have ample time before the closure period.
Do you have tenants?
“It’s often difficult to vacate tenants over this holiday period. After settlement you only have 14 days to provide vacant possession before the buyer has an option to rescind”, advises Olivia.
While the property market can deliver some fantastic opportunities at this time of the year, it’s imperative that buyers and sellers alike are aware of their obligations and legal requirements during the process over the Christmas and New Year holidays.
All the above could make or break a property sale or purchase over the holidays. If you need more assistance or have any questions, you can give our team a call on 1300 932 738.
This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.