Chinese Buyers Should Know the Difference: Three Types of Australian Property Title
Property in Australia comes in several different title types, of which:
Torrens Title
Strata Title
Community Title
are the most common and the ones you really need to understand.
1. Torrens Title Torrens Title
Torrens Title is also known as freehold title. If you buy a property with Torrens Title, it means you own not only the house itself outright, but also the land on which the property sits.
So when buying a Torrens Title property, it is especially important that the size of the house is well matched to the size of the land, taking into account factors such as maintenance costs and rental returns.
In Australia, most standalone houses come with Torrens Title.
Generally speaking, because these properties include land, their prices are higher. Correspondingly, the holding costs of such properties are also greater, making them better suited to owner-occupiers.
A detached house with land — a typical Torrens Title property
Torrens Title properties have no restrictions, or very few (limited by local council regulations), on keeping pets, barbecuing and the like. They also usually offer better private space and are less affected by surrounding noise.
After buying a Torrens Title property, you are responsible for the repair and management of both the land and the house yourself. You can also apply to the local government to demolish and rebuild or extend the house.
When buying a Torrens Title property, you should confirm in advance whether it has any illegal structures, because once the property is transferred into your name, all the risks associated with illegal structures pass to you as well. If they are discovered by the local government, you will bear responsibilities such as fines and demolishing the non-compliant structures.
If you intend to demolish and rebuild or extend the house on the land after buying a Torrens Title property, then before purchasing you should fully understand the local government's restrictions and requirements on building (such as height limits, material restrictions and area limits) so as not to end up worse off.
2. Strata Title Strata Title
Strata Title is another very common type of property title. In Australia, apartments and most townhouses come with Strata Title.
If you buy a Strata Title property, you do not directly own the land beneath the house; instead, you own a lower-tier form of ownership. For an apartment, you buy a space on the land defined horizontally and vertically, and gain permanent ownership of the dwelling within that space. For a townhouse, you have a clearly defined area of land use.
A quality apartment — a typical Strata Title property
So who exactly owns the land beneath the house? In simple terms, it is owned collectively by all the apartment owners on that land.
Therefore, when buying a Strata Title property, you only need to consider factors such as the quality of the house itself, the indoor and outdoor areas, the floor plan and parking, without having to consider the land area.
Because a single parcel of land can be divided into anywhere from two to hundreds of strata spaces and generate many shared facilities (such as external walls, corridors and lifts), all of which need to be maintained by all owners together, Strata Title properties are generally handed over to a professional property management company, with owners simply paying the corresponding property management fees each quarter.
In addition to the laws and regulations issued by the government, each owners' body also has its own rules for strata management. For owners, the restrictions are correspondingly greater.
Because the building structure belongs to the owners' body, owners of strata properties cannot freely alter or renovate their own homes. If an owner is found to have altered the building's structure without permission, they will face serious consequences (such as fines, being required to restore the original state, or litigation). In return, the strata management company is responsible for the day-to-day cleaning and maintenance of the building, saving owners a great deal of trouble.
3. Community Title Community Title
Community Title combines some features of both Strata Title and Torrens Title. The communities where Community Title properties are located are usually fairly large and consist mainly of standalone houses.
If you buy a Community Title property, you have permanent ownership of both the house and the land, but at the same time you also jointly own and maintain, together with the other owners in the community, certain common areas such as roads, parks and recreational facilities.
Generally, the owners' general meeting engages a professional property management company to maintain the community's common areas, which is similar to Strata Title. As a result, owners of Community Title properties also need to pay the corresponding community management fees each quarter.
Which type of title is better?
In fact, all three title types have their own advantages and disadvantages, and which type of home to choose mainly depends on the buyer's own circumstances and needs.