What Did 2016 Look Like in Conveyancing?

Lately, people online have been looking back at 2016. It may not have been significant for everyone, but I think everyone can agree it’s hard to believe it was a decade ago. For conveyancing in New South Wales, 2016 was significant; it marked a big shift. The industry moved away from paper-heavy, trust-based methods and started focusing more on regulation and technology. Many of the systems we use now began that year.

Introduction of Foreign Resident Capital Gains Withholding (1 July 2016)

From 1 July 2016, Foreign Resident Capital Gains Withholding (FRCGW) was introduced.

At first, it only applied to property sales over $2 million. Sellers had to provide a clearance certificate to show they were not foreign residents.

If the seller did not provide a clearance certificate, the buyer had to hold back part of the sale price and send it to the ATO. This change put more compliance responsibility on both practitioners and sellers. 

Now, the threshold is gone, and every seller must provide a clearance certificate, no matter the price. What started as a small compliance step is now required for everyone.

Many people did not expect tax rules to become part of daily conveyancing work so quickly.

The commencement of electronic conveyancing with PEXA

PEXA was launched and completely changed how settlements worked.

Before 2016:

• Settlements were paper-based.
• Physical attendance at settlement meetings was required.
• Cheques, couriers, and last-minute document fixes were common.
• One settlement could take a whole day.

This often meant that one staff member’s sole position within a business was to attend and complete settlements!

With PEXA:

• Transfer and mortgage documents became electronic.
• Funds moved digitally.
• Settlements occurred online, often in minutes rather than hours.
• Distance was no longer a big issue.

This was more than a system update. It was a cultural change. The industry moved from manual, relationship-based settlement rooms to organised digital workspaces.

It was like going from fax machines to cloud platforms in one step.

Cybersecurity, reliance on systems, and less room for mistakes became new challenges, even if people did not notice them much in 2016.

Introduction of Verification of Identity (VOI) requirements

With the introduction of electronic conveyancing, VOI requirements were formally introduced, making the way people were identified in transactions more consistent with a uniform identity verification process.

Before 2016, practitioners mostly chose which ID to collect. In many cases, a single driver’s licence was sufficient. As a result, the fraud risk and occurrence of fraud were significantly higher than acknowledged.

After VOI was introduced, standards were set. Buyers and Sellers now had to provide several identity documents. 

Looking back, it is almost unthinkable that property could be bought and sold with such minimal identity verification.

VOI was an early response to the growing problem of property fraud. It foreshadowed today’s heightened expectations for due diligence and cybersecurity. 

Reflecting on 2016, it’s clear that year marked a turning point for conveyancing in New South Wales. The adoption of new technologies, stricter regulations, and a focus on security set the foundation for the industry as we know it today. What began as incremental changes has become the standard, shaping a more efficient, transparent, and resilient conveyancing landscape for practitioners and clients alike.