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[MoreMore Insights] Property Titles in Australia

Australia recognises the private ownership of land, and owners have permanent ownership of the property. Property title can be divided into Torrens title, strata title, and other title like comminity title. Understanding the types and characteristics of titles can help buyers find a property that meets their needs.

Torrens Title

Torrens title, or freehold, is the most common form of property title in Australia. Torrance title means that the buyer owns the whole land and the buildings on it. These properties are self-contained, which means owners should maintain the house and land by themselves, as council doesn't weed their yards. At the same time, when purchasing a torrens title property, buyers should check the property in advance whether there are any illegal construction problems. Once the buyers own the property, all the potential risks will be transferred to the buyers. Whenever the government finds problems, buyers will be fined or even will be required to demolish the building. Most houses on street are of torrens title with large amount of land, so they have high prices as well as the high appreciation. Many people prefer to purchase as their owner occupied home. But when it is used for investment, land tax might be payable.

Strata Title

Strata title properties are segmented from land of torrens title, and apartment, townhouse and villa are of strata title. The biggest difference with torrens title is that land is not owned by the individual but by the collective, which means buyers just obtain the properties on the land. Generally, a professional property management company is responsible for properties’ daily security, cleaning, pest control and other services, which greatly facilitates owners’ life. Owners need to pay council rate, water rate and a quarterly property management fee. However, different management companies will have different regulations. The buildings belong to the owners' group, so it greatly restricts the freedom of the owners, who cannot rebuild or decorate their own homes. But strata title properties are generally cheaper and closer to train stations and shopping centres. So they are easier to rent out and have higher rental returns, which make them popular amount young people and investors.

Community Title

Community title properties have become popular in recent years. The properties are normally located in a large complex. The road, garden and landscape of community need to be managed and maintained by all owners. This type is between torrance title and strata title in which owners who buy a community title property will get ownership of the land and the house, but they also are subject to owners’ group and management company. Much like Strata title properties, the owners will also entrust management company and pay quarterly for property maintenance. This type is mainly dominated by independent houses and is characterized by large area and community facilities.

Leasehold Title

Leasehold title properties are usually in rural areas. They are owned by the government and leased out to buyer for a period of time. This type of property could be a cattle farm, a wheat property, or a church. The government has the power to decide the ownership of the land. All properties in Australian Capital Territory are of 99-year leasehold titles.

Company Title

Company title properties usually refer to the properties owned jointly by the shareholders. By purchasing shares in the company, the buyers acquires the right to live in the property, to occupy certain parts of the property, and to use the common property. The equity certificate is the proof to use house. This type properties price are relatively low, but buyers are highly restricted by shareholders, who cannot easily renovate or deal. Similarly, it is difficult for owners to apply loans from lender, which have strict standards and procedures. And this type of property is very rare now.

Any questions or concerns about property titles? Contact your mortgage broker at Moremore Finance, and we can provide professional advice and suggestions.

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