New Residential Seller Disclosure Requirement in Qld from 1st August 2025

What Property Sellers and Their Advisors Must Know

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Introduction

Buying or selling a home in Queensland is about to undergo significant changes. From 1 August 2025, sellers will face new legal obligations to disclose important property details upfront — even before a buyer signs a contract.

Let’s break it down. This new seller disclosure regime replaces the old “buyer beware” approach with a proactive, seller-led process. If you’re selling property in Queensland, understanding these changes is critical to protect your sale and avoid unexpected legal risks.

Here’s what you need to know about these new rules, how they impact you and your solicitor, and how to prepare for a smooth sale.

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Why Are These New Disclosure Rules Happening?

Queensland has long followed the “buyer beware” model, where buyers took on the primary responsibility for checking property details after signing a contract. Sellers had limited disclosure duties.

This approach often left buyers surprised by title issues, planning restrictions, or unpaid levies. Disputes ensued, resulting in costly delays or failed sales.

To fix this, the Property Law Act 2023 introduces a compulsory seller disclosure regime. Sellers must now be transparent and upfront about title issues, encumbrances, planning restrictions, and known risks — even if buyers don’t ask.

Here’s what this means for you: The legal burden is shifting onto sellers to provide complete and accurate information early in the sales process. It’s a significant change, but one designed to make transactions more transparent, fairer, and smoother.

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What Sellers Need to Do: The Form 2 Seller Disclosure Statement

The cornerstone of the new regime is the Form 2 Seller Disclosure Statement. This form:

• Must be completed and signed by the seller

• Must include prescribed certificates backing up the disclosures

• Must be given to the buyer before the contract is signed

If you don’t provide a valid Form 2, the contract may be void, meaning your sale could fall apart before it even starts.

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What Documents Accompany Form 2?

Your solicitor will help you collect and verify several key documents, including:

Getting these documents together early is vital. Your solicitor will check they’re accurate, complete, and up to date before including them in Form 2.

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Your Solicitor’s Role Has Changed — Get Them Involved Early

In the past, solicitors mostly jumped in after an offer was made. That won’t work anymore.

Now, your solicitor must be involved before you list your property. They will:

• Prepare the Form 2 package early, making sure it’s legally compliant

• Order and review all necessary certificates upfront

• Work with your selling agent so Form 2 is handed to buyers before contracts are signed

• Track expiry dates of documents and update Form 2 if any facts change before settlement

This early involvement reduces the risk of contract disputes, delays, or the contract being voided.

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Cost and Workflow Impact for Sellers

Pay your tax, but don’t tip. This upfront legal work may cost more initially, but it protects you from costly renegotiations or sale collapses later.

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Real-World Examples of Proper Disclosure

Example 1: Unit in a Body Corporate Scheme

• Title search shows an unregistered lease

• Community Management Statement (CMS) restricts Airbnb or short-term rentals.

• Sinking fund forecast reveals a future shortfall in levies

Action: All of these must be fully disclosed in Form 2 and provided to buyers promptly. This helps avoid surprises, protects the sale, and prevents renegotiations or delays.

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Example 2: House with an Uncertified Pool

• Seller unaware of the need for a pool safety certificate

• Uses a Pool Safety Declaration as a temporary disclosure

Action: This declaration alerts buyers and agents to the pool compliance risk upfront, thereby reducing contract risks and last-minute disputes.

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What Buyers and Their Solicitors Need to Know

The new Form 2 disclosure gives buyers early visibility into property risks. But buyer’s solicitors still must:

• Verify that documents are current, complete, and valid

• Order additional specialist searches if needed (e.g., building approvals, flood maps)

• Advise buyers on disclosed issues and negotiate price or conditions accordingly

• Watch for any updates to the Form 2 before settlement

 

 

 

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Buyer’s Solicitor Cost Impact

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Practical Buyer’s Solicitor Example

• Seller discloses a 4-metre drainage easement at the rear

• Buyer’s solicitor checks title, confirms restrictions

• Advises the buyer about future building limitations and negotiates price or contract terms

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How Long Do These Documents Stay Valid?

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What These Changes Mean for You

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Seller Readiness Checklist: What to Do Before You List

• Engage your solicitor before listing your property

• Collect current rates, water, and pool certificates if available

• Identify and disclose easements, notices, and unapproved works

• Understand what Form 2 covers; ask questions early

• Stay in touch with your solicitor for updates before settlement

 

 

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What If You Don’t Disclose Properly?

If you don’t provide a valid Form 2 or omit material facts:

• The buyer may terminate the contract at any time before settlement

• The buyer may demand compensation or renegotiate terms

• The buyer can walk away from the sale without penalty

• You may face legal consequences for deliberate or careless non-disclosure

Being transparent from the start protects your sale, your timeline, and your reputation.

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How These Extra Legal Costs Affect Your Capital Gains Tax

It’s important to understand that the additional legal and search costs involved in preparing the Form 2 Seller Disclosure Statement are not just an upfront expense. These costs form part of your buying and selling costs and will affect your Capital Gains Tax (CGT) calculation when you sell your property.

Here’s what you need to know:

• The fees you pay for your solicitor’s work on Form 2 preparation and accompanying searches can be added to the cost base of your property for CGT purposes.

• This means that these costs can potentially reduce your taxable capital gain, providing a helpful tax benefit.

• However, if your property sale does not proceed or falls through, these expenses cannot be recovered — they become a sunk cost.

Because of this, it’s crucial to be confident that your property is ready for sale and that all disclosures are accurate and timely. Early planning and careful legal advice help minimise the risk of losing these costs if a sale doesn’t complete.

Final Thoughts

Queensland’s new seller disclosure requirements, effective from 1 August 2025, represent a significant shift. While these rules put more responsibility on sellers, they also create an opportunity to make sales more transparent and less risky.

If you’re selling property in Queensland, don’t leave your financial future to chance. Get your solicitor involved early, gather accurate documents, and disclose fully.

Smart Property Taxpayers ask questions early, and Umbrella Accountants is here to guide you every step of the way.

 

Need tax advice around buying or selling property?

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