Be careful when providing your details in a property purchase!
When buying a property, it’s crucial to be meticulous with the details you provide. We’ve seen several instances where buyers enter into a contract to purchase a property, only to realise within a few days that it would have been better to add a name or change the purchasing entity (such as a Family Trust).
At first glance, you might think it’s a simple fix – just draw up a new contract with the preferred names and everything’s sorted. Unfortunately, it’s not that easy. Once the contract is formed, changing the names becomes quite complicated. Due to the way Stamp Duty works, the Office of State Revenue can, and will, charge you two lots of stamp duty. The only way to avoid this is to terminate the first contract and then enter into a new one.
While this might sound straightforward, there’s a significant catch. If either party decides they want to back out of the deal entirely, all they need to do is refuse to sign the second contract after the first one has been rescinded. For sellers, this presents a considerable risk with no benefit. It's unlikely that a seller’s solicitor would recommend terminating a perfectly good contract.
To avoid making an expensive mistake, ensure you discuss who will be on the contract with your bank, financial advisor, and any other relevant parties well before signing. Ideally, start these discussions when you first decide to start looking for a property.
N.B This is not legal advice. Please always consult your solicitor for legal advice.