Changes to legislation for 2025!

As any motelier will know, there is a minefield of legislation that can apply to your business. Whilst it is always good business practice to step back and conduct a general compliance health check from time to time, it is even more relevant in 2025 as there are some important property law changes coming which will impact on anyone selling their freehold and leasehold motel.

Property Law Act 2023 – New Seller Disclosure Regime

Whilst changes to the property law act have been on the cards for a long time and amendments first written about in 2023, we finally have a commencement date – which is 1 August 2025. On this date the Property Law Act 2023 will replace the Property Law Act 1974, finally introducing some well overdue modernization which aims to align legislation with current legal practices.

We have previously written about changes specific to leases, the other key reform which will impact on motel transactions is the new Seller Disclosure Regime.

This is the new statutory seller disclosure scheme which requires sellers to provide buyers with a disclosure statement and prescribed certificates before entering into any contract.

Non-compliance may allow buyers to terminate the contract before settlement.

The Property Law Regulation 2024 prescribes various matters to support the operation of the seller disclosure scheme, including the information and certificates which must be disclosed by the seller.

The list of prescribed certificates that a seller must give to a buyer, will include (where applicable to the transaction):

• a title search and plan;
• notice containing details of any building work;
• any current show cause notices or enforcement notices issued under the Building Act 1975 (Qld) or Environmental Protection Act 1994 (Qld);
• any current work order or notice from an authority;
• any notices required to be given to the buyer under the Environmental Protection Act 1994 (Qld), including notice of contamination of the property;
• any document given to a seller in relation to the property being affected by an application or order under the Neighbourhood Disputes (Dividing Fences and Trees) Act 2011 (Qld);
• any document given to the seller from a government entity about a transport infrastructure proposal;
• any documents given to the seller from any entity in relation to an intention to resume the property (or part of the property);
• if there is a pool, pool compliance certificate (or notice that there is no pool safety certificate);
• if the property is included in a community titles scheme, the community management statement; and
• if the property is included in a community titles scheme or Building Units and Group Titles Act 1980 (Qld) scheme, a body corporate certificate (or explanatory statement if the body corporate certificate cannot be obtained).

The prescribed information to be included in the seller’s disclosure statement, includes:

• seller’s details;
• title description and address;
• whether the property is included in a community titles scheme or Building Units and Group Titles Act 1980 (Qld) scheme;
• details of any unregistered encumbrances;
• zoning of the property;
• information relating to contamination and environmental protection;
• whether the property is affected by an application or order under the Neighbourhood Disputes (Dividing Fences and Trees) Act 2011 (Qld);
• whether the property is affected by a notice from a government entity about a transport infrastructure proposal;
• whether the property is affected by the Queensland Heritage Act 1992 (Qld) or included in the World Heritage List;
• whether the property is affected by a notice of intention to resume the property (or part of the property);
• whether there is a pool on the property;
• information relating to rates and water services; and
• details of the last rent increase if the property was subject to a residential tenancy agreement or rooming accommodation agreement during the last 12 months.

There are also further warnings and other statements to be included in the seller’s disclosure statement (as contained in the Property Law Regulation).

In short, there will be an extensive amount of homework required to be done before a contract is prepared and anyone considering selling their property should bear this in mind before the perfect offer comes knocking on their door.

Foreign Resident Capital Gains Withholding (FRCGW) Changes

Effective 1 January 2025, amendments to the FRCGW regime will eliminate the existing $750,000 property value threshold. That will result in the withholding rules being applicable to all property sales, regardless of value.

Essentially, for the purposes of this regime, a seller is deemed to be foreign, meaning a buyer must withhold 15% of the purchase price unless the seller can provide a “clearance certificate” from the ATO (Clearance Certificate). A Clearance Certificate confirms that the withholding tax of 15% is not required to be withheld from the transaction.

This regime can apply to more than just a freehold sale and will also apply where an interest in land is being sold (i.e. a leasehold interest).

A seller can apply for the Clearance Certificate at any time before a contract is entered into and it is valid for 12 months from the date of issue. It must be valid at the time the certificate is given to the buyer prior to settlement.

It is advisable to apply early, as processing can take up to 28 days.

Be alert…

As always, our advice is to stay informed and seek professional advice to ensure that these upcoming changes don’t slow down your sale.

This is also an opportune time to conduct a general review of your systems, procedures and the rules and legislation governing your motel business. As each motel is different, please take our comments as general guidance and contact Mahoneys to obtain timely and practical legal advice on the actual issues you are facing.

Written by Amy ODonnell

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