Newsletter – September 2022
Welcome to the latest newsletter with updates from the team at The Property Law Centre. It’s nice to finally see that Spring is in the air after a very wet winter and we are looking forward to a warm summer ahead.
We would like to share with you a few updates that maybe of interest.
Transfers to and from Trusts without Resetting the Bright Line Test
- On 30 August 2022 the government introduced the Taxation (Annual Rates for 2022-2023, Platform Economy, and Remedial Matters) Bill into parliament.
- The proposed legislation indicated that provided the transferee is the principal settlor at the time that the land is transferred to them as well as at the time the trust acquired the land from any person then the rollover relief provisions would apply and the bright line test date wouldn’t be reset.
- This is good news for those wishing transfer their properties to and from their family trusts who wish to avoid resetting the bright line test, however, as the bill has now been revoked it is unclear when the changes will be enacted. It appears that they will be included in the next tax bill.
- If you are considering restructuring, winding up your trust or transferring your property to or from your trust, please contact us to see whether the exemption applies to you.
- It may also be a good time to check with us on the status of your trust and whether any modifications need to be made as a result of the changes introduced by the Trusts Act 2019 and whether your trust complies with the amendments introduced as a result of that Act.
Cross Lease to Freehold Conversions
The ability to convert your cross-lease title to a freehold title is something that we often assist with, however, the parties to a cross lease can encounter problems that can prevent them from going ahead. Proceeding with a cross lease to freehold conversion can be simplified if the parties can work through some of the common sticking points from the outset. These include:
- Defining the freehold boundaries (as the underlying share in the freehold title is often different to the exclusive use areas):
- Determining how the costs of converting the cross lease to freehold titles can be shared between the parties, including Council consent fees, the costs of satisfying any Council conditions as well as legal and survey costs.
- Determining how the common area can be divided and what easements should replace the common area (e.g the shared driveway).
- Sometimes one or more parties wish to retain control over what the other cross-lease owners(s) do on their land (particularly when making structural alterations) and are unwilling to relinquish these rights. This can become an issue when one party recognises that the planning rules for the property may be more liberal than what the cross-lease memorandum allows. Occasionally these issues can be dealt with by way of a covenant registered on the title of a property in order to protect some of these rights.
We can assist with the preparation of a cross lease subdivision agreement and engage with your surveyor in order to complete the conversion of titles from start to finish. If you are considering adding value to your property by converting your cross-lease title to a freehold title, please contact us.
Wills
- If you have recently purchased a property or if your circumstances have recently changed you should consider revising your Will or making a new Will. Your Will is an extremely important document and it can help relieve pressure on your family after your death and to help minimise the likelihood of disputes. Our fee for a simple will is competitively priced at $325.00 including GST. Please contact us if you would like our assistance to prepare or update your Will.
Unit Title Amendment Act
The government introduced the Unit Titles (Strengthening Body Corporate Governance and Other matters) Amendment Act on 9 May 2022. The changes are due to take effect no later than 9 May 2024.
The changes are designed to:
- Enhanced pre-contract disclosure including what must be included in a Pre-Contract Disclosure Statement.
- Strengthen the governance arrangements in relation to the body corporate and increase the professionalism and standards of body corporate managers.
If you would like to know more about the Amendment Act, please contact us.
