Real Estate – Land Ownership
As laws in countries around the world become more stringent, investors are on the lookout for markets that offer more opportunities. That is why of recent, the Australian market has been flooded with investors from around the world looking to invest in real estate. The boom in the Australian real estate market has attracted investors like bees to honey.
As the foreign investors come in their numbers to invest in real estate, local buyers have also noticed the booming market and are making efforts to be part of it. This has led to an increase in competition within the market that has also resulted in price hikes. Thanks of the government’s policy on foreign investment, it is relatively easy for foreign investors to come in and invest. Nevertheless the legal and regulatory system can be complex and buyers need to take measures o protect themselves. This means carrying out due diligence where necessary.
Although the different states and territories may have their own land law, most of these laws are fairly similar. Generally, land ownership is regulated by the Torrens title system which requires land titles to be registered at land registry office for the concerned state or territory. Although the most common land title is freehold, there are certain lands that can only be given out on lease. Most times such leasehold titles are given out for very long term making them to have almost the same benefits as freeholds.
Those investing in Australia Real Estate as foreigners are advised to carry out due diligence on all landed property. Most land is sold on an “as is” basis and on the principle of “buyer beware”. What this means is that the buyer is responsible for taking steps to protect themselves from making any wrong investments. The investor is advised to carry out due diligence on the property they are buying. The extent of the due diligence will depend on the type of property being considered, the location and the expected use.
Getting planning approvals
Investors will have to get their proposed use of the land approved by the relevant authority. The requirement for approval will vary depending on where the land is located and the proposed use. States and local councils are responsible for managing approvals at local and state levels. There may be separate requirements related to environmental approvals.
During the process of purchasing property, a request for approval may be structured by the buyer based on the nature of the property and their risk tolerance.
- The least risky option is to purchase property that already has a valid and relevant approval. The investor should investigate to be sure that the approval is valid and they will not need any further approvals.
- It is possible for the investor to purchase the property before getting approval. However, they should make sure that in the purchase contract they include terms that are favourable to them. Also they should carry out due diligence to assess the likelihood of the approval requested being granted.
- It is also possible to buy property without making any approval request. This option is highly risky for the investor so proper due diligence should be done to assess the likelihood of getting an approval.
Also See : 3 essential tips for unwrapping and making sound investments in real estate in Australia
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