Section 15 of Doing Business in Australia

In Australia, each state and territory has its own legislative requirements and conventions for the transfer of real property and registration of interests in land.

The Torrens system of registering title to land exists in each state and territory. Under this system, interests in land are registered in a central state register which provides a government-guaranteed indefeasible title (subject to limited exceptions, e.g. obtaining title by fraud). Upon registration, a legal interest is created in the land subject only to the

pre-existing interests registered on the title.

The interests which may be registered on title include mortgages, leases, easement and covenants.

Sale and purchase of land

If the vendor is registered (or required to be registered) for GST, GST is payable on the sale of land that is commercial vacant land or new residential premises. However, no GST is payable on the sale of commercial land which is sold subject to full tenancies, or on existing residential premises. Any GST payable is payable by the vendor but it is usual commercial practice for the vendor to contractually pass its GST liability to the purchaser. If the purchaser is registered for GST, it may claim input tax credits (i.e. refunds of GST) from the ATO for the acquisition of the taxable component of the purchase price.

Certain purchasers of new residential premises or potential residential land are required to withhold the taxable component of the purchase price and remit it to the ATO, rather than paying it to the vendor.

Stamp duty on the contract and transfer is generally payable by the purchaser, and the rate of duty and time for payment varies in each state or territory. In some states the purchase of property by foreigners is subject to a stamp duty surcharge in addition to the standard rates of stamp duty.

Depending on the land value and the way the land is owned (e.g. by a trustee) or used, state or territory land tax may be payable. A person’s principal place of residence is usually exempt, but most land used for commercial and investment purposes will be liable for land tax. Some states impose a land tax surcharge on foreign owners of property in addition to the standard rates of land tax.

The sale of land may give rise to a CGT or an income tax liability for the vendor, depending on whether the land was “trading stock” or held as a longer-term investment. The purchase price of the land and associated non-deductible expenses will generally establish a tax cost base for the calculation in due course of any gain or loss realised by the purchaser on the subsequent sale of the land.

Unless a vendor of property (among other transactions) with a market value of AU$750,000 or more has obtained a clearance certificate from the ATO, the purchaser will be required to pay 12.5% of the consideration payable to the ATO.

Until recently, all settlements for the sale of land required a paper certificate of title and transfer form to be physically submitted to the land registry for processing. Australia’s States and Territories are currently transitioning to an electronic settlement system, though the timing of this transition varies across the States and Territories. Once in place, the electronic system is intended to streamline the settlement process.

It is now required practice to carry out a verification of identity process on clients involved in conveyancing transactions, which involves taking copies of clients’ identity documents (eg passport and drivers’ licence) and storing these in a secure database. This purpose of the VOI process is to avoid fraudulent transactions.


The commercial terms and statutory requirements for leasing of retail, commercial and industrial premises are similar in all Australian jurisdictions.

In most jurisdictions leases with a term exceeding three to five years are required to be registered on the title to the land.

Each jurisdiction has minimum lease covenants implied into leases (e.g. the tenant’s right to quiet enjoyment), but these are usually significantly amended or excluded completely by the terms of the lease.

There is also specific legislation in each jurisdiction to protect retail tenants (other than large or anchor tenants, e.g. supermarkets and department stores). This legislation ensures that small and specialty tenants are given adequate disclosure about their obligations before entering into a lease. It also mandates or prohibits certain terms from leases (e.g. a minimum five-year term, unless waived with legal advice, limit on number of rent reviews, prohibition on payment of key money). In most jurisdictions, if the lease terms are inconsistent with the retail lease legislation, the legislation will prevail.

Foreign investment approval 

Many acquisitions of interests in land by foreign persons are likely to require foreign investment approval. Please see section 2 - Guide for Foreign Investors to Acquisitions in Australia.


This guide is current as of April 2021.