For newcomers to buying property the jargon can get confusing. Here is a guide to some commonly used terms:
Joint Tenants: each owner has equal shares and rights in the property.
Tenants in Common: 2 buyers or more own a property with unequal shares and rights.
Transfer Duty: formerly known as stamp duty. A state government tax on the transfer of property calculated on the value of the property.
Equity: the difference between your mortgage and your property’s value. If your home is worth is $500,000 and your mortgage is $200,000 then your equity is $300,000.
LMI (lender’s mortgage insurance): usually required by lenders when you are borrowing more than 80% of the property’s value. It provides insurance to the lender in case the borrower defaults on the loan.
Strata Title: This grants ownership of a section or “unit” of a larger building. This “unit”can be sold or transferred by the owner.
CGT (Capital Gains Tax): The tax you pay when you sell an investment property if you have made a profit.