Finally … Property Lingo Explained!
When it comes to property, there are many terms and abbreviations to know and understand.
Here is a list comprising the most common terms and abbreviations to help you in your future
property transactions:
Body Corporate:
Is responsible for the administration and maintenance of all areas shared by owners in a block of apartments or multi-dwelling complex.
Capital Gain:
The amount by which your property has increased in value compared to the amount you purchased it for.
Caveat:
A record stated on the Certificate of Title advising that an interest in the property is claimed by a third party.
Certificate of Title:
A legal document which details ownership and property particulars such as the lot number, plan/diagram/strata plan number, volume and folio and encumbrances. A Volume and Folio number is given to each Certificate of Title.
Consideration:
The price paid by a buyer for the purchase of a property.
Covenant :
Registered on the Certificate of Title restricting the titleholder to certain effects such as building above a certain height.
Easement:
Registered on the Certificate of Title to access utilities such as sewer lines.
Encumbrance:
A charge that affects the use of a property such as a Caveat, Easement or Restrictive Covenant. It is registered on the Certificate of Title.
Final Inspection:
An opportunity for the buyer to inspect the property they are purchasing just before settlement to ensure everything is in working order. The property must be in the same state and condition as to when the offer was accepted.
Joint Tenants:
Each owner has equal shares and rights in the property. Upon the death of one joint owner and if a right of survivorship exists, the share of the interest of the deceased automatically goes to the surviving owner(s).
Negatively Geared:
Income from a property is less than outgoings such as council and water rates, insurance, property management fees etc. This loss can offset any income thus lowering the tax liability (taxable income is reduced).
Off the Plan:
The purchase of a property before it is built and can also be before the Certificates of Title are issued. (eg. Apartments, land in new estates).
Offer and Acceptance (O&A):
Form used when an offer is made to purchase a property. When the acceptance of the offer has been communicated back to the buyer, it becomes a legally binding contract (‘Contract of Sale/Purchase’).
Passed In:
When a property does not sell at auction as the highest bid does not meet the reserve price or no bid has been received at all.
Positively Geared:
Income for the property exceeds all expenses. The income is then added onto taxable income.
Reserve Price:
The minimum amount a seller will accept for their property at an auction.
Settlement:
The day all legal documentation and funds are exchanged between banks and settlement agents. The buyer is then the new owner of the property.
Stamp Duty:
The Government tax paid by a buyer when purchasing a property. Stamp Duty is paid before settlement.
Tenants in common:
Entities purchasing a property in specified shares. Upon the death of one entity, the property does not automatically go to the remaining entities unless it is stated in the will.
Valuation:
A written report of the estimated value of a property prepared by a valuer. A Valuation is different to an appraisal as an appraisal is given by a real estate agent. The banks instruct valuation companies to estimate the value of a property before finance is given. The banks do not obtain appraisals, only valuations.
Abbreviations:
BIR: Built in robe
CGT: Capital Gains Tax
Dbr: Double bedroom
Ens: Ensuite bathroom
FHOG: First Home Owners Grant
GHWS: Gas hot water system
Lug: Lock up garage
OFP: Open fire place
ONO: Or nearest offer
OTP: Off the Plan
PPOR: Principal place of residence;
POA: Price on application
P/a: Per annum
P/w: Per Week
R/C ac: Reverse cycle air-conditioning
WIR: Walk in robe