Buying an Investment Property in NSW: Conveyancing & Legal Checklist KEY TAKEAWAYS: Buying an investment property can mean taking on an existing tenancy as well as the property itself. Have the Contract for Sale and any existing tenancy documents reviewed before exchange. Check the title, planning position, strata records and other matters relevant to how you intend to use the property. Transfer duty, possible land tax and federal tax considerations can affect the real cost of the investment. NSW rental laws have changed significantly in recent years, so understand the landlord obligations you will take on after settlement. Before buying an investment property in NSW, check the contract, title, existing tenancy, planning position, strata records where applicable and the obligations you will take on after settlement. Buying an investment property is different from purchasing a home purely to live in. You are not just buying bricks and mortar. Depending on the property, you may also be taking on an existing tenant, strata obligations, restrictions affecting how the property can be used and ongoing responsibilities as a landlord. A property can look attractive financially while still containing legal or practical issues that affect how it can be leased, altered or eventually sold. That makes conveyancing and appropriate due diligence an important part of the investment decision. What Should You Check Before Buying an Investment Property? An investment-property buyer should check both the legal position of the property and anything that could affect its intended use or ongoing ownership. Check Why it matters Contract for Sale Sets the legal terms, settlement period and special conditions. Title Can reveal easements, covenants and restrictions. Existing tenancy Determines whether you are acquiring the property subject to a current tenancy. Planning and use Can affect renovations, development or short-term letting. Strata Can reveal levies, defects, planned works and by-laws. Physical condition Building and pest inspections can identify matters outside the legal contract review. Tax and ownership Transfer duty, land tax and ownership structure can affect overall costs. Finance Lending needs to be ready within the contractual settlement timeframe. Your solicitor or conveyancer can identify which legal enquiries are appropriate to the property and which matters require separate building, financial or tax advice. 1. Have the Investment Property Contract Reviewed Before Exchange The Contract for Sale should be reviewed before exchange wherever possible because it determines the legal terms on which you are buying the property. Your conveyancer can review matters including: special conditions; deposit requirements; settlement timing; inclusions and exclusions; title documents; easements, covenants and restrictions; whether the property is being sold with vacant possession or subject to an existing tenancy; and other property-specific conditions. Where appropriate, proposed changes can also be raised before you become legally committed. Your plans for the property matter here too. If you intend to renovate, redevelop, operate short-term accommodation or purchase through a company, trust or SMSF, tell your advisers before exchange. That allows the legal position to be considered against what you actually intend to do with the investment. Our guide to contract review before buying property in NSW explains this process in more detail. 2. You Might Be Buying a Tenant Too If an investment property is sold subject to an existing residential tenancy, the tenancy does not simply disappear because ownership changes. Before exchange, check: whether the contract provides for vacant possession or sale subject to the tenancy; whether the tenancy is fixed-term or periodic; the current rent; the commencement and, where applicable, end date; bond information; known rental arrears or disputes; whether a managing agent is involved; and any terms relevant to your future plans for the property. Do not assume that buying the property gives you an immediate right to remove an existing tenant. Current NSW rules require landlords to rely on prescribed grounds when ending fixed-term and periodic tenancies, with the required notice depending on the circumstances. NSW Government guidance on ending a residential tenancy explains the current rules. If obtaining vacant possession is important to your investment decision, make that clear to your conveyancer before committing. Coutts also provides advice about leasing property in NSW. 3. Understand Transfer Duty, Land Tax and Other Tax Considerations Buying an investment property can create upfront and ongoing tax costs that should form part of the purchase decision. Transfer Duty Transfer duty generally applies when buying an investment property in NSW unless a particular exemption or concession applies. Revenue NSW includes investment properties among transactions on which transfer duty can be payable. Your conveyancer can deal with the Revenue NSW documentation and transfer-duty requirements associated with the conveyancing transaction. See our guide to stamp duty and transfer duty in NSW, or refer to Revenue NSW transfer duty guidance for current information. Land Tax Owning an investment property can also contribute to a NSW land tax liability. Land tax generally depends on the combined unimproved value of non-exempt NSW land, how the land is owned and the exemptions applying to the owner. Different rules can apply to individuals, joint owners, companies, trusts and foreign owners. Because thresholds and rules can change, see our current guide to land tax in NSW or Revenue NSW land tax guidance rather than relying on an old threshold. Federal Tax Considerations Investment-property buyers should also obtain appropriate tax advice about federal tax consequences. Capital gains tax, deductions and the implications of buying through a trust, company or SMSF depend on the investor’s circumstances and should be discussed with an accountant or tax adviser. The Australian Taxation Office also distinguishes between immediately deductible rental expenses and certain acquisition costs that can instead form part of the property’s CGT cost base. ATO guidance for residential rental properties provides current taxation information. 4. Check What You Can — and Can’t — Do With the Property Do not assume an investment property can automatically be renovated, extended, subdivided or used for your preferred rental strategy. Depending on the property, restrictions can arise from: planning controls; development approvals; easements and restrictive covenants; strata by-laws; heritage controls; and short-term rental accommodation rules. If your strategy depends on a particular use — such as redevelopment, adding a secondary dwelling or operating short-term accommodation — investigate that position before buying. Short-term accommodation is a useful example. NSW has a specific regulatory framework for short-term rental accommodation, while strata schemes can also have rules relevant to some forms of short-term letting. See NSW Planning information on short-term rental accommodation for current requirements. The useful question is not simply: Can I buy this property? It is: Can I use this property in the way my investment strategy requires? 5. Buying a Strata Investment Property? Look Closely at the Scheme Buying a strata investment means acquiring an interest in the wider strata scheme as well as the individual lot. Before purchasing, check the scheme’s by-laws and obtain appropriate strata information. A strata report can reveal matters such as: the scheme’s finances; insurance; current levies; special levies; building defects; planned works; safety requirements; existing or pending legal matters; meeting records; and disputes. For an investor, this can be particularly important where the scheme faces significant defects, major proposed works or substantial levies. Also check by-laws relevant to your proposed use, including rules around renovations, parking, pets and short-term accommodation. NSW Government recommends obtaining a strata report and checking the scheme’s by-laws before buying a strata property. See its guide to buying a strata property. You can also read our guide to obtaining a strata report before purchasing in NSW. 6. Understand Your Cooling-Off Rights Most established residential investment properties bought by private treaty have the standard NSW five-business-day cooling-off period, but important exceptions apply. For residential property: the standard cooling-off period is generally five business days; off-the-plan residential contracts generally have a 10-business-day cooling-off period; a purchaser who validly rescinds during cooling-off generally forfeits 0.25% of the purchase price; there is no cooling-off period following a successful auction purchase or same-day exchange after the property is passed in; and a purchaser can waive cooling-off by providing the required section 66W certificate. If you are buying at auction or considering waiving your cooling-off rights, have the contract reviewed before you become committed. See our detailed guide to the cooling-off period in NSW for more information. 7. Investment Property Due Diligence Checklist The Contract for Sale is an important part of the purchase, but it does not replace wider due diligence on the property and investment. Title and Legal Documents Review the title, registered plan and relevant easements, covenants and restrictions affecting the property. These documents can reveal interests or limitations that are not obvious from physically inspecting the property. Existing Tenancy If the property is tenanted, review the tenancy documentation and confirm whether the transaction provides for vacant possession or continued occupation. The advertised rental return should not be the only tenancy information considered. Planning and Intended Use Investigate planning or approval matters relevant to how you intend to use or improve the property. This may be particularly important if your investment plan involves renovations, redevelopment, subdivision or a particular form of rental accommodation. Strata Records For strata property, investigate the financial and management position of the scheme as well as the individual lot. Look at levies, planned expenditure, defects, insurance, relevant by-laws and other matters raised in the strata records. Building and Pest Reports Building and pest inspections investigate physical issues that a conveyancer’s legal review cannot establish. Use appropriately qualified inspectors to investigate the physical condition of the property. See our guide to building and pest reports when purchasing property in NSW. Finance Make sure your lending arrangements are compatible with the settlement timetable in the contract. Your conveyancer can coordinate with the lender for settlement, but the lender remains responsible for approving your finance and preparing its lending documentation. Ownership Structure If you plan to purchase through a company, trust or SMSF, obtain appropriate legal, accounting and financial advice before committing to a particular purchaser structure. Changing the intended purchaser after entering into the contract can create additional legal, duty or financing issues. Buyers should undertake due diligence relevant to their intended investment rather than assuming that the Contract for Sale answers every question about the property. Our NSW conveyancing documents checklist explains the documents commonly involved throughout the wider conveyancing process. 8. Being a NSW Landlord Comes With Legal Responsibilities Once you own and rent an investment property, you must comply with NSW residential tenancy requirements. These include requirements relating to: repairs and minimum standards; rent increases; ending tenancies; pets; rent-payment methods; and other landlord obligations. Several significant NSW rental-law changes have taken effect in recent years. Rent Increases Rent increases are generally limited to once every 12 months across NSW residential tenancy types. The expanded once-per-year rule commenced on 31 October 2024. Ending a Tenancy Landlords now need a prescribed ground when ending both fixed-term and periodic residential tenancies. These changes commenced on 19 May 2025 and replaced the former general no-grounds approach. This is particularly relevant when purchasing an already-tenanted property if your investment plan depends on obtaining vacant possession. Pets Tenants can request permission to keep a pet, and landlords can only refuse a request on specified grounds. The current rules also set a timeframe for responding to a tenant’s pet request. Rent Payments Landlords and agents must offer approved fee-free rent-payment options. Fee-free bank transfer requirements were introduced in 2025, with additional rent-payment requirements commencing in 2026. For current landlord and tenancy requirements, refer to NSW Fair Trading’s rental law changes. The broader point is simple: rental property is not legally passive income. Ownership brings continuing obligations that should form part of the investment decision. When Should You Speak to a Conveyancer About an Investment Property? Speak to your conveyancer before exchange wherever possible, particularly where the property is tenanted, strata, off-the-plan or involves an unusual ownership structure. Tell them about: your intended use of the property; any existing tenancy; your lender; relevant deadlines; your proposed purchaser structure; and concerns identified during your initial enquiries. If you are buying at auction, have the contract reviewed before bidding. If a company, trust or SMSF is being considered, involve the relevant legal, accounting and financial advisers before the purchaser structure is finalised. If you’re unfamiliar with the role your conveyancer plays in the transaction, our guide explains what a conveyancer does when buying property in NSW. Buying an Investment Property in NSW? Coutts Lawyers & Conveyancers can assist with the conveyancing and property-law aspects of buying an investment property from contract review through to settlement. Our Property & Conveyancing team can assist with: pre-purchase contract review; title and property enquiries; tenanted property purchases; strata transactions; Revenue NSW requirements; lender coordination; and electronic settlement. Getting the legal position clear before exchange helps you understand what you are actually acquiring, not simply what the property appears to offer financially. Schedule an Appointment Now Frequently Asked Questions Can You Buy a Property With a Tenant Already Living There in NSW? Yes. A NSW investment property can be sold subject to an existing residential tenancy. The contract and tenancy documentation should establish whether the property is being acquired subject to the tenancy or with vacant possession. If it is sold subject to the tenancy, do not assume ownership gives you an immediate right to require the tenant to leave. Do Investment Properties Have a Cooling-Off Period in NSW? Most established residential investment properties bought by private treaty generally have a five-business-day cooling-off period. There is no cooling-off period after a successful auction purchase or same-day exchange after a passed-in auction, and a buyer can waive cooling-off through the prescribed section 66W process. Off-the-plan residential contracts generally have a 10-business-day cooling-off period. Do I Pay Transfer Duty When Buying an Investment Property in NSW? Transfer duty generally applies when purchasing an investment property in NSW unless a particular exemption or concession applies. The amount depends on the dutiable value and the rules applying to the transaction. Do I Pay Land Tax on an Investment Property in NSW? Potentially. Land tax depends on the value, use and ownership of your NSW land and the exemptions and thresholds applying to your circumstances. Investment properties are among the types of land that can be subject to NSW land tax. What Legal Checks Should I Do Before Buying an Investment Property? Check the Contract for Sale, title, existing tenancy, relevant planning information, strata records where applicable and other searches appropriate to the property. You should also obtain appropriate building, pest, financial and tax advice where relevant. Should I Have the Lease Reviewed Before Buying a Tenanted Property? Yes. Review the existing tenancy documentation before committing to a property that is being sold subject to a tenant. The tenancy can affect the current rent, the rights and obligations you take on as landlord and your ability to obtain vacant possession. Should I Speak to a Conveyancer Before Buying at Auction? Yes. Have the Contract for Sale reviewed before bidding because a successful NSW auction purchase does not have the usual cooling-off period. Any title issues, special conditions or proposed amendments therefore need to be considered before you bid. ABOUT KAY VITOGIANNIS: Kay joined the Coutts team in May 2021, working as a Licensed Conveyancer within our Property & Conveyancing team and based in our Narellan office. Kay has more than 20 years of experience in the legal industry. She began her journey in CBD conveyancing firms as a secretary and attained her Advanced Diploma in Conveyancing in December 2010. For further information, please don’t hesitate to contact: Kay Vitogiannis Licensed Conveyancer info@couttslegal.com.au 1300 268 887 Contact Coutts today. This blog is merely general and non-specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you. Contact Us