Disclosure requirements for conveyancing transactions in Australia

Purchasers of real property (including vacant land, buildings and residential and commercial property) must withhold and remit 12.5% of the purchase price to the Australian Taxation Office (ATO) on completion of the sale unless one of the following apply:

A separate clearance certificate must be obtained for each vendor and the name on the certificate must be the same as the name on the title for the property (for example, where a trustee is the registered proprietor, the clearance certificate must be in the name of the trustee, not the trust).

A clearance certificate provides certainty to purchasers regarding their withholding obligations. It confirms the withholding tax is not applicable to the transaction.

The application for a clearance certificate requires taxation information for the vendor that would not normally be known by the vendor's lawyer. The vendor or the vendor's accountant is usually in the best position to apply for the clearance certificate. The application is made online and most straightforward applications are generally processed within 24 to 48 hours, however the ATO estimates that applications may take up to 28 days to process, but may take longer if further information is required or the application has factors that may be considered higher risk or unusual.

While not required, if the clearance certificate is available before the contract is entered into, the vendor's lawyers will usually attach the clearance certificate to the contract.

Clearance certificates are valid for 12 months from the date of issue.

For further information, see ATO: Capital gains withholding - a guide for conveyancers and ATO: Capital gains withholding clearance certificate application online form and instructions - for Australian residents.

A vendor making a supply (either taxable or non-taxable) of residential premises (not just new residential premises), or potential residential land, must give a notice to the purchaser before completion (or, in the case of an instalment contract, before payment of the first instalment) that states whether or not the purchaser is required to make a withholding payment under section 14-250 of Schedule 1 to the TAA 1953 unless the following exceptions apply:

To rely on this exception, the vendor must be satisfied in relation to the purchaser's registration and intentions in relation to the acquisition at the time of completion. The vendor can rely on an Australian Business Register search carried out up to seven days before completion as proof of registration and a written statement via correspondence or as part of the contract for sale in relation to the purchaser's intention (paragraph 61, Law Companion Ruling LCR 2018/4 (LCR 2018/4)).

Vendors who fail to provide this notice may be subject to a penalty (section 14-255(4) and section 14-255(6), TAA 1953).

While the notice is not required to be given on or before exchange of contracts, it can be included in the contract for sale and it is considered prudent to do so, particularly where there are multiple vendors or purchasers as this avoids the need to provide separate notices (paragraph 65, LCR 2018/4). The vendor can provide the purchasers with an updated notice before settlement if the details relating to the withholding payment change.

The notice is included on page 3 of the New South Wales (NSW) contract for the sale and purchase of land 2022 edition (see Standard document, Standard form: Contract for the sale and purchase of land 2022 edition (NSW)) and, unless amended, indicates that no withholding payment is required.

A withholding payment is required where:

(Part 3 of Schedule 5 to the Treasury Laws Amendment (2018 Measures No 1) Act 2018 (Cth).)

Generally, the amount of the withholding payment will be 1/11th of the purchase price (excluding the usual adjustments) or 7% of the purchase price where the margin scheme is applied, but the amount may differ where the transaction is between associates or only part of the property is subject to the withholding payment (section 14-250(1)(a) and (9), TAA 1953).

For more detailed commentary on the GST withholding payment, see Murray-Jones I, Australian GST Handbook 2023-24 (Thomson Reuters, 2023) at [27-650] to [27-800], and LCR 2018/4.

A vendor must comply with disclosure obligations under the Building Energy Efficiency Disclosure Act 2010 (Cth) (BEED Act) if the property being sold is:

The vendor's obligations are as follows:

A BEEC sets out the energy efficiency rating of a building or area of a building and consists of a NABERS energy rating and a commercial building disclosure tenancy lighting assessment.

If the property being sold does not already have a BEEC, the vendor must engage an accredited assessor to apply for a BEEC on behalf of the vendor.

For further information, see Practice note, Building Energy Efficiency Disclosure (BEED) obligations.

There are no statutory disclosure obligations for the sale of commercial property in the Australian Capital Territory (ACT).

A contract for the sale of residential property must:

Certain contracts for sale are exempt from these requirements, including contracts arising from:

(Section 6, CLSRP Act (ACT).)

The buyer has a right to rescind the contract or complete the contract and claim damages in relation to some of the prescribed conditions and warranties.

Before entering into the contract, the seller must also give to the buyer either:

(Section 23(1), CLSRP Act (ACT).)

For a detailed summary of these obligations, see Practice note, Disclosure obligations in conveyancing transactions (ACT).

Where a unit is being sold prior to registration of the units plan, the seller must provide the buyer with a disclosure statement before entering into the contract or include it as part of the contract. The disclosure statement must include the matters specified in section 260 of the Civil Law (Property) Act 2006 (ACT).

If the seller fails to provide the disclosure statement before entering into the contract, the buyer can rescind the contract before the earlier of settlement and 21 days after the seller gives the disclosure statement to the buyer.

The seller is also required to give the buyer notice if the seller becomes aware of a material change to a matter set out in the disclosure statement (Update Notice) and the buyer may then have a right to rescind or complete the contract and claim damages.

The contract for sale is deemed to include a warranty by the seller that the information in the disclosure statement and any Update Notice is accurate and the buyer may have a right of rescission if there is a breach of that warranty.

For a detailed summary of these obligations, see Practice note, Disclosure obligations in conveyancing transactions (ACT): Off-the-plan sale of a unit in a proposed units plan.

The requirement to attach the required documents to a contract or proposed contract for the sale of residential land does not apply to a contract that arises from the exercise of an option to buy the property if either of the following apply:

(Section 6(2), CLSRP Act (ACT).)

Subject to certain exemptions, all contracts for sale in NSW:

(Section 52A(2), Conveyancing Act 1919 (NSW) (CA 1919 (NSW)).)

The purchaser may rescind the contract in either of the following scenarios:

(Sections 21 and 22, CSLR 2022 (NSW).)

For a detailed summary of the disclosure obligations for the sale of land in NSW, see Practice note, Disclosure obligations in conveyancing transactions (NSW).

Where a contract arises from the exercise of a call option, it may be exempt from these disclosures (see Options to purchase land).

Off-the-plan contracts for the sale of a residential lot must, in addition to the usual disclosure requirements, include a disclosure statement in the approved form that attaches the prescribed documents. These include:

(Section 12 and Part 2 of Schedule 1 of the CSLR 2022 (NSW).)

If the vendor fails to attach the disclosure statement to the off-the-plan contract, the purchaser may rescind the contract at any time within 14 days of the contract being made (unless the contract has been completed) (sections 21(1)(b) and 22(1)(a), CSLR 2022 (NSW)).

The vendor must give the purchaser a notice at least 21 days before completion if the vendor becomes aware that one of the following applies in relation to the disclosure statement attached to the contract:

(Section 66ZN, CA 1919 (NSW).)

A purchaser may rescind the contract if:

(Sections 66ZO and 66ZP(3), CA 1919 (NSW).)

For a detailed discussion of vendor disclosure obligations in relation to residential off-the-plan contracts, see Practice note, Disclosure obligations: off-the-plan residential conveyancing (NSW).

For the approved form of disclosure statement, see Standard document, Vendor disclosure statement: off-the-plan residential conveyance (NSW).

There are no statutory disclosure obligations for the sale of land in the Northern Territory (NT) except for off-the-plan sales.

Where the property being sold is a proposed unit in an unregistered unit title scheme under the Unit Title Schemes Act 2009 (NT) (UTSA 2009 (NT)), before the buyer enters into the contract, the seller must give the buyer a signed scheme disclosure statement that is registered together with any document prescribed by regulation (in-force disclosure statement).

There are no seller disclosure obligations when granting an option over land in the NT.

For an overview of the disclosure obligations for the sale of land in Queensland, see Checklist, Seller disclosure obligations: overview (Qld).

There are no statutory disclosure obligations for the sale of commercial property in Queensland (Qld) unless any of the following apply:

In addition to the general disclosure obligations (see Commercial contracts), the seller of residential property has the following additional disclosure obligations.

There are no statutory seller disclosure obligations when granting an option over land in Qld, except that the seller of a proposed lot in a community titles scheme must give a buyer a disclosure statement prior to the buyer signing an option to purchase (section 212B, BCCMA 1997 (Qld)) (see Proposed lot in a community titles scheme).

A vendor of land must prepare a disclosure statement and, except for properties being sold at auction, provide it to the purchaser at least ten clear days before the date of settlement (section 7, Land and Business (Sale and Conveyancing) Act 1994 (SA) (LBSCA 1994) (Vendor's Statement).

The Vendor's Statement must be prepared in accordance with regulation 8 and Form 1 of Schedule 1 of the Land and Business (Sale and Conveyancing) Regulations 2010 (SA) (LBSCR 2010) (Form 1) and must include:

(Section 7, LBSCA 1994 and regulations 8 and 9, LBSCR 2010.)

For a template Vendor's Statement, see Land Services SA: Form 1 – Vendor's statement.

For further details regarding vendor disclosure obligations in South Australia (SA), see Practice note, Disclosure obligations in conveyancing transactions (SA).

There are no specific disclosure obligations for land or units sold subject to registration of the relevant plan of subdivision.

However, where the land being sold is a lot in a proposed community scheme:

(Section 142A, Community Titles Act 1996 (SA).)

As a vendor is not required to provide a Vendor's Statement to the purchaser before entering into a contract for sale (other than an auction contract), there is no requirement to provide a Vendor's Statement as part of an option agreement or the contract attached to the option agreement (see Commercial and residential contracts).

Nevertheless, the statutory cooling-off period will apply to the contract for sale unless one of the exemptions in section 5(7) of the LBSCA 1994 applies, including:

Obtaining a waiver of the cooling-off rights and disclosure obligations will usually be the most straightforward option for the vendor, particularly where the purchaser is an experienced developer and will have the opportunity to carry out its own investigations during the call option period.

A vendor of land must provide a disclosure statement (section 32 statement) to the purchaser before the purchaser signs the contract for sale. The section 32 statement must contain information and attach documents about the following matters relating to the land, as set out in more detail in Division 2 of Part II of the Sale of Land Act 1962 (Vic) (SLA 1962 (Vic)):

The purchaser can rescind the contract for sale before it accepts title and becomes entitled to possession or receipt of rents and profits, in any of the following scenarios:

(Section 32K(1), (2) and (3), SLA 1962 (Vic).)

However, the purchaser may not rescind the contract for sale if the court is satisfied that:

(Section 32K(4), SLA 1962 (Vic).)

A vendor commits an offence if they knowingly or recklessly:

(Section 32L, SLA 1962 (Vic).)

For a detailed summary of the disclosure obligations for the sale of land in Victoria, see Practice note, Disclosure obligations in conveyancing transactions (Vic).

For a form of vendor statement under section 32 of the SLA 1962 (Vic), see Standard document, Vendor statement under section 32 of the Sale of Land Act 1962 (Vic).

In addition to the usual disclosure requirements, the vendor under an off-the-plan contract must make the following disclosures to the purchaser.

Further, if the Registrar of Titles or vendor requires the plan of subdivision to be amended between the time of entry into the off-the-plan contract and registration of the plan of subdivision, the vendor must advise the purchaser in writing of the proposed amendment within 14 days after receipt of the Registrar's requirement or the vendor making the amendment request (as the case may be) (section 9AC(1), SLA 1962 (Vic)). The purchaser:

A vendor must provide the purchaser with a section 32 statement before entering into an option to purchase land, in the same way that it must be provided before entering into a contract for the sale of land (see definition of "sale" in section 2, SLA 1962 (Vic)).

Where the vendor provides the purchaser with a section 32 statement before entering into the option to purchase, the vendor is not required to provide the purchaser with a further section 32 statement before entering into the contract for sale (being a subsequent contract) on the exercise of the option, if the contract for sale is:

(Section 32O, SLA 1962 (Vic.)

Further, if the purchaser under the resulting contract for sale is a different person or entity to the grantee under the option to purchase (for example, where the grantee under the option exercises its rights to nominate another person to be the purchaser under the contract for sale), the vendor is excused from providing another section 32 statement to a nominee or assignee of the purchaser (see definition of "purchaser" under section 2 and section 30 of the SLA 1962 (Vic)).

There are no statutory disclosure obligations for the sale of commercial or residential property in Western Australia (WA) unless:

Where the property being sold is a proposed lot in a strata or community scheme, the seller must provide, in addition to its other general disclosure obligations:

(Section 156(2), Strata Titles Act 1985 (WA); section 130(2), Community Titles Act 2018 (WA).)

The contract for sale must also require any deposit or other money paid by the buyer to be held and invested by a nominated legal practitioner, real estate agent or settlement agent (section 137(2), Community Titles Act 2018 (WA) and section 163(2), Strata Titles Act 1985 (WA)).

The buyer may avoid the contract if the contract does not comply with these deposit requirements or the proposed lot is not created within the period agreed by the parties or, failing agreement, within six months of the contract date (section 137(3), Community Titles Act 2018 (WA) and section 163(3), Strata Titles Act 1985 (WA)).

For a more detailed summary of these obligations, see Practice note, Disclosure obligations in conveyancing transactions (WA): Off-the-plan contracts.

There are no seller disclosure obligations when granting an option over land. However, if disclosure obligations applies in relation to the resulting contract, the seller will need to ensure that the option agreement provides for the seller to provide the prescribed disclosure information and documents to the buyer prior to either party exercising its option.