Property questions.

Buying and selling real property, the contract, section 32, cooling off, duty, land tax, off the plan and settlement.

← Back to the hub, and Ask Compass
What happens when you buy a property in Victoria?Buying property in Victoria usually involves reviewing the contract and section 32 vendor statement, completing due diligence, satisfying any contract conditions, arranging finance and duty, and completing settlement. At settlement, the buyer pays the balance of the price and the transfer is lodged for registration. The Transfer of Land Act 1958 governs the Torrens title system, while the Sale of Land Act 1962 sets important rules for contracts and vendor disclosure.Read the answer →Does a contract to buy or sell land have to be in writing?Yes. Section 126 of the Instruments Act 1958 provides that a contract for the sale of an interest in land cannot be enforced unless it, or a written note or memorandum of it, is signed by the party to be charged. An oral agreement to buy or sell land is generally unenforceable, subject to limited exceptions such as part performance.Read the answer →When does a property deal become legally binding?A deal binds when the parties intend to be bound, not necessarily when they shake hands or pay a holding deposit. Masters v Cameron sorts pre contract documents into those binding at once, those binding but awaiting formal documents, and those not binding until a formal contract is signed. For land, the writing and signature requirement in section 126 of the Instruments Act 1958 applies on top.Read the answer →What is the standard contract of sale of land, and how do general and special conditions work?The contract of sale of land is made up of the particulars of sale, which record the specific deal, and the general conditions, which are the standard terms that apply unless changed. Special conditions are added terms that modify the standard position. The particulars, general conditions and special conditions are read together, and a poorly drafted special condition can conflict with the rest.Read the answer →What are the particulars of sale in a contract?The particulars of sale are the front part of the contract recording the facts of the deal, being the vendor and purchaser, the property and title details, the price and deposit, the day of sale and settlement date, and the elections such as GST treatment and whether the sale is subject to finance. The general conditions apply against the particulars to complete the contract.Read the answer →What is the difference between fixtures and chattels, and are solar panels included in a sale?Fixtures are items attached to the land so as to form part of it, and they pass with the property unless the contract excludes them. Chattels are loose items that pass only if the contract lists them as included goods. Solar panels, hot water units and similar installations generally read as fixtures, but leased or financed items may not be the vendor's to give.Read the answer →Who can sign a contract, and are electronic signatures valid?The party to be charged must sign under section 126 of the Instruments Act 1958, and a signature by an attorney, a company officer or an authorised agent must be noted with the signer's name printed. Electronic signatures are valid. Section 9 of the Electronic Transactions (Victoria) Act 2000 treats a signature requirement as met where the method identifies the signatory, indicates their approval, is appropriate in the circumstances and is consented to.Read the answer →How much deposit is required and who holds it?The deposit is the amount agreed in the contract, often around 10% of the purchase price but not fixed by a universal rule. It is usually held by the estate agent or the vendor's solicitor or conveyancer as stakeholder until it can be released under the contract or the law. The stakeholder must hold and deal with the money according to the applicable statutory and contractual requirements.Read the answer →Can the vendor have the deposit released before settlement?Section 27 of the Sale of Land Act 1962 (Vic) provides a process for a vendor to seek early release of a deposit. The vendor must give the purchaser the required particulars of mortgages and other secured amounts. Release depends on the statutory requirements being met, including the purchaser not making an effective objection within the prescribed period and there being no relevant condition enuring for the purchaser's benefit.Read the answer →What is the cooling off period when buying a house in Victoria?For many private sales of residential property and small rural land in Victoria, section 31 of the Sale of Land Act 1962 gives the purchaser three clear business days to cool off. The period generally starts when the purchaser signs the contract. To use the right, the purchaser must give written notice in the required way and within time. The right has important exceptions.Read the answer →Is a contract binding at auction, and does cooling off apply?A property sold at a public auction is not subject to the usual cooling-off right under section 31 of the Sale of Land Act 1962 (Vic). The contract is formed under the auction process and applicable contract terms. A buyer should not assume either that the hammer alone resolves every question about formation or that either party is free to withdraw until a document is signed.Read the answer →Can a contract be made subject to finance, a building report or a pest report?Yes. A sale can be made subject to loan approval and to satisfactory building or pest reports, with a set period for approval, a limited automatic extension and a short grace period. If approval or a satisfactory report is not obtained in time, the buyer can end the contract, but only if the buyer has complied with the condition, for example by actually applying for finance.Read the answer →Can a buyer pull out of a contract after signing?Only on a recognised footing, being the cooling off right under section 31, an unsatisfied condition such as finance, a right to avoid for defective section 32 disclosure under section 32K, or a specific statutory right such as those on off the plan sales or acquisition notices. Without a ground, a buyer who refuses to complete risks forfeiting the deposit, within limits, and a damages claim.Read the answer →What happens if the buyer or seller defaults on settlement?If a party fails to settle, the other serves a default notice requiring the default to be remedied within a set period, and if it is not, the contract may be rescinded. A defaulting buyer faces forfeiture of the deposit up to a capped proportion of the price and a damages claim, and penalty interest runs for each day of delay. Interest is payable without the need for a demand.Read the answer →What if the property is damaged or not in the condition sold before settlement?The vendor's obligations before settlement depend on the contract, including its provisions about risk, maintenance, damage and the condition of the property. Many Victorian contracts require the property to be delivered in substantially the condition it was in at the contract date, fair wear and tear excepted, but the precise wording matters. A dispute does not necessarily give the buyer a right to refuse settlement.Read the answer →How can a buyer protect their interest before settlement with a caveat or priority notice?A buyer under a contract holds an equitable interest in the land and can lodge a caveat on the title to record and protect it against competing dealings. An alternative is a priority notice, which reserves priority for a short period and can be renewed once. A caveat lodged without a proper interest can expose the lodging party to a compensation claim.Read the answer →What is a section 32 vendor statement and what must it disclose?A section 32 statement is the disclosure document a vendor must sign and give the buyer before the buyer signs, under section 32 of the Sale of Land Act 1962. It covers financial matters, title and evidence of the right to sell, easements and covenants, planning, notices from authorities, owners corporation details, building permits, services not connected and growth areas contributions. It is consumer protection legislation and is read widely.Read the answer →What easements and covenants must be disclosed, and what if the land is affected by one?Registered easements and covenants are disclosed by annexing the title, with the easement document or sufficient covenant particulars where the title description is not enough. Unregistered easements, such as a water, sewerage or drainage pipe, must be specifically identified. Section 32C also requires disclosure of any current breach of a restriction, such as building over an easement.Read the answer →What planning information does a vendor have to disclose?The vendor must disclose the basic planning details, being the relevant planning scheme, the responsible authority, the zoning or reservation and any overlay. The vendor does not have to annex parts of the scheme or explain its effect. It is then for the buyer to investigate the consequences, including the extent of any reservation, before signing.Read the answer →What notices and orders must be disclosed under section 32D?Section 32D requires disclosure of particulars of any notice, order, declaration, report or recommendation of a public authority or government department, or any approved proposal, that directly and currently affects the land and of which the vendor might reasonably be expected to know. A planning permit and a building permit requiring works are common examples. Private reports and some classifications fall outside it.Read the answer →What owners corporation information must be disclosed when buying an apartment or unit?Where the land is affected by an owners corporation, the vendor must attach an owners corporation certificate issued under section 151 of the Owners Corporations Act 2006, together with the documents that accompany it, being the rules, the prescribed information statement, the resolutions of the last annual general meeting and a statement that further information can be obtained by inspecting the register. A certificate is not required for an inactive owners corporation.Read the answer →Does the vendor have to disclose building permits and owner builder work?For a property with a residence, the vendor must disclose particulars of building permits issued in the recent statutory period under section 32E. Separately, an owner builder selling within a set period must provide a condition report, and for work above the statutory value level also owner builder warranty insurance, under section 137B of the Building Act 1993. A missing required owner builder report makes the contract voidable by the buyer up to settlement.Read the answer →What is the due diligence checklist and does a vendor have to provide it?For a residential sale, the vendor's estate agent, or the vendor if there is no agent, must make a due diligence checklist available to buyers under section 33 of the Sale of Land Act 1962, in the form published by Consumer Affairs Victoria. It does not have to be in the section 32 statement, and failing to give it does not invalidate the contract.Read the answer →What can a buyer do if the section 32 statement is wrong or incomplete?If a vendor statement under section 32 of the Sale of Land Act 1962 (Vic) is wrong or incomplete, the buyer may have rights under section 32K, including a right to avoid the contract in some circumstances. The right is not automatic. The statutory tests, the nature of the omission, the vendor's conduct and whether the buyer is materially disadvantaged all matter. Damages or other remedies may also be available depending on the facts.Read the answer →What does buying off the plan mean, and what are the risks?Buying off the plan means buying a lot before the plan of subdivision is registered, and often before the building is finished. The contract must contain the prescribed off the plan terms and relies on a sunset period for registration. The main risks are delay, amendments to the plan, insurance obligations the vendor may not meet, and the deposit being committed for a long period.Read the answer →What is a sunset clause, and can the developer cancel my off the plan contract?A sunset clause allows the contract to be ended if the plan of subdivision is not registered by a set date. For a residential off the plan contract, a vendor can only rescind under a sunset clause with the buyer's written consent or an order of the Supreme Court. The buyer's own statutory right to end the contract if the plan is not registered in time is unaffected.Read the answer →What buyer protections apply to off the plan apartments?For an off the plan lot in a residential apartment building of the relevant class and above a set height, the Sale of Land Act 1962 adds protections. Under section 9ADA the vendor must not let the buyer take possession before an occupancy permit is issued, and under section 9AEA the buyer may rescind and recover all money paid, with penalty interest, if the developer has not arranged the required developer bond.Read the answer →Is there a duty concession for buying off the plan?Yes. A purchaser may qualify for a Victorian off-the-plan land transfer duty concession, which can reduce the dutiable value by excluding qualifying construction costs incurred after the contract date. Eligibility depends on the type of property, the contract date and the applicable concession rules. A temporary concession currently applies to eligible apartment and townhouse purchases under contracts entered into from 21 October 2024 to before 21 April 2027.Read the answer →What help is available for first home buyers in Victoria?Eligible first home buyers in Victoria may qualify for a land transfer duty exemption or concession, the First Home Owner Grant for a qualifying new home, and certain federal or lender-based schemes. These benefits have different eligibility rules. As at October 2026, first home buyer duty relief is available for homes with a dutiable value up to $750,000, while the grant is for eligible new homes valued up to $750,000.Read the answer →What is the First Home Owner Grant and who is eligible?The Victorian First Home Owner Grant is a $10,000 payment for eligible first home buyers who buy or build a qualifying new home to live in. As at October 2026, the home must generally be valued at no more than $750,000 and must not have previously been sold or occupied as a residence. The grant is different from the first home buyer land transfer duty exemption or concession.Read the answer →What duty concessions and exemptions apply when buying a home?Victorian land transfer duty relief may include the first home buyer exemption or concession, the principal place of residence concession, pensioner benefits and the off-the-plan concession. Eligibility depends on the property's dutiable value, the purchaser's circumstances, the contract date and how the property will be used. More than one benefit may be relevant, but not every concession can be combined.Read the answer →Can you requalify for first home buyer benefits after family violence?Yes. Victorian law allows eligible victim-survivors of family violence to requalify for certain first home buyer benefits even if they previously owned a home or received a First Home Owner Grant or first home buyer duty relief. Relief may also be available where family violence prevents a person from meeting an occupation requirement. Eligibility depends on the circumstances and supporting evidence.Read the answer →What is land transfer duty (stamp duty) and how is it assessed?Land transfer duty, often called stamp duty, is a state tax on the transfer of land under the Duties Act 2000, assessed on the price or market value through the Digital Duties Form and, in electronic conveyancing, transferred to the State Revenue Office at settlement. The rate rises with value, duty is assessed on the price inclusive of GST, and a range of concessions and exemptions can reduce it.Read the answer →Can a foreign person buy property in Australia, and what is FIRB approval?Federal foreign investment rules can require a foreign person to obtain approval before acquiring Australian residential land. From 1 April 2025 to 30 June 2029, foreign investors are generally prohibited from purchasing established dwellings, subject to limited exceptions. The rules are separate from Victoria's foreign purchaser additional duty, and eligibility must be checked before a contract is signed.Read the answer →What is foreign purchaser additional duty?Foreign purchaser additional duty (FPAD) is an additional Victorian land transfer duty that can apply when a foreign purchaser acquires residential property. It is separate from ordinary land transfer duty and from federal foreign investment approval. Whether a purchaser is a foreign purchaser depends on the statutory definitions, the buyer's visa or citizenship status, the type of purchaser and any applicable exemption.Read the answer →What is foreign resident capital gains withholding?When relevant Australian real property is sold, the purchaser generally must withhold 15% of the purchase price and pay it to the Australian Taxation Office unless a valid clearance certificate or variation applies. Since 1 January 2025, the regime generally applies without the former property-value threshold. It is a tax collection mechanism, not a final assessment of the vendor's capital gains tax.Read the answer →What is GST withholding on the purchase of new residential property?For new residential premises or potential residential land, a buyer may have to withhold the GST component at settlement and pay it directly to the Australian Taxation Office under Subdivision 14-E of Schedule 1 to the Taxation Administration Act 1953. The contract records whether this applies, and the default position in the contract is that no additional GST is payable, so the election must be made correctly.Read the answer →When is GST payable on a property sale?GST generally does not apply to the sale of established residential premises, but applies to new residential premises, to most commercial and industrial property, and sometimes to vacant land, where the sale is a taxable supply made in the course of an enterprise. Going concern and farmland exemptions and the margin scheme can change the outcome, and the position should be confirmed with an accountant or the Australian Taxation Office.Read the answer →What is capital gains tax when selling an investment property or second home?Capital gains tax (CGT) is part of Australia's income tax system. When a property is sold or otherwise disposed of, a capital gain may arise if the capital proceeds exceed the property's cost base, subject to adjustments, exemptions and concessions. The main residence exemption may protect an eligible home, but it does not automatically cover investment property, rental periods, trusts or every property used by a family.Read the answer →Should you buy property as an individual, company, trust or SMSF?The right ownership structure depends on the property's purpose, who will use it, financing, tax, land tax, succession planning and asset-protection objectives. Individuals, companies, trusts and self-managed superannuation funds are taxed differently and have different legal restrictions. There is no universally best structure, and changing ownership after purchase can trigger duty, tax and lender costs.Read the answer →What is the difference between joint tenants and tenants in common?Joint tenants own the whole property together, so on the death of one the survivor takes the whole by survivorship, registered by a simple survivorship application without probate. Tenants in common each own a distinct share that passes under their will through their estate, which requires probate. Couples often choose joint tenancy, and people buying in defined or unequal shares often choose tenancy in common.Read the answer →Should you update your will when buying a property?Buying property is a sensible time to make or review a will and powers of attorney, because the co ownership form chosen on the transfer and the value of the asset can change how your estate passes. This is especially important for blended families, where survivorship on a joint tenancy can unintentionally exclude some children if both owners die together.Read the answer →Who pays land tax when buying or selling, and what is the single holding basis?Victorian land tax is generally assessed annually on the owner of taxable land, using the land's site value and the owner's holdings, subject to exemptions and special rules. From 1 January 2024, a vendor cannot pass on their land tax liability to a purchaser under a contract for a sale price below the statutory threshold. As at 2026, the threshold is $10.7 million. Where an adjustment is legally permitted, a single holding calculation may be relevant.Read the answer →What is vacant residential land tax?Vacant residential land tax (VRLT) is an annual Victorian tax based on a property's capital improved value. It can apply where a home is vacant for more than six months in the preceding calendar year. From 1 January 2026, it can also apply to certain undeveloped residential land in metropolitan Melbourne that has remained undeveloped for at least five continuous years and is capable of residential development. Exemptions and notification rules are important.Read the answer →What is windfall gains tax?Windfall gains tax is a state tax under the Windfall Gains Tax Act 2021 on the uplift in value when land is rezoned and the resulting increase is above a set level. It is paid by the owner at the time of rezoning, which on a sale is the vendor, and section 10H of the Sale of Land Act 1962 makes it an offence to apportion an existing liability to a buyer, so any such clause has no effect. Several categories are excluded.Read the answer →What is the commercial and industrial property tax (CIPT)?Victoria's commercial and industrial property tax (CIPT) reform gradually replaces land transfer duty on qualifying commercial and industrial property with an annual tax. A property does not enter the scheme automatically. It generally enters after a qualifying transaction on or after 1 July 2024, then has a 10-year transition period before CIPT may apply. The property's entry status, use and transaction history should be checked before purchase.Read the answer →What is nomination, and can it trigger double duty?Nomination is where the named buyer directs the vendor to transfer the property to another buyer, such as a related entity. It usually does not attract a second lot of duty, but double duty can arise under section 32A of the Duties Act 2000 where there is additional consideration, meaning a premium paid to the original buyer, or land development between contract and transfer. The entity nominated must exist at the date of nomination.Read the answer →What happens at settlement, and what is electronic conveyancing?At settlement the buyer pays the balance of the price, the title transfers and the buyer becomes entitled to possession. Since the move to electronic lodgement, Victorian settlements are conducted in an Electronic Lodgement Network such as PEXA on a signed client authorisation, where funds move and the transfer and any mortgage are lodged with Land Services Victoria at the same moment, and duty is transferred to the State Revenue Office.Read the answer →What are adjustments at settlement?Adjustments divide the recurring outgoings and income of the property, such as council rates, water rates and owners corporation fees, between the vendor and buyer as at the adjustment date, so each pays only for the period they own the property. The adjustment date is the earlier of possession or completion, and rates are generally adjusted on a rates paid basis.Read the answer →What is penalty interest if settlement is late?A buyer who fails to settle on time is liable to pay penalty interest to the vendor for each day of delay, counted from the appointed settlement day until the day settlement actually occurs. Default arises if settlement does not occur by the stipulated time, commonly late afternoon, on the appointed day, and all days in between count, including weekends and public holidays.Read the answer →How do adjustments work when buying a tenanted or rented property?When the property is tenanted, rent and outgoings are adjusted at settlement according to who is responsible under the lease. Rent paid up to settlement needs no adjustment, and the buyer receives rent for the period after by a letter under section 141 of the Property Law Act 1958. Rent in arrears at settlement is generally not adjusted, and a vendor without a special condition may be unable to recover it.Read the answer →What notices must be given after settlement?After settlement a notice of acquisition is given to Land Services Victoria and to the local council, water authority and any owners corporation to record the buyer as the new owner, under section 103 of the Land Tax Act 2005. The vendor gives a notice of disposition to the water authority under section 159 of the Water Act 1989. In electronic settlement the notice of acquisition is generated automatically and lodged with the transfer.Read the answer →Does a swimming pool or spa need a compliance certificate when selling?Victoria does not require a pool or spa compliance certificate to be attached to the contract, and the Sale of Land Act 1962 does not require a vendor to disclose the compliance status. Owners must still register pools and spas with the council and have safety barriers inspected and certified under the Building Act 1993 regulations, so a buyer can inherit the cost of compliance work.Read the answer →What is a terms contract?A terms contract is one where the buyer pays the price by instalments over time and takes title only on the final payment, often with possession and caveat protection in the meantime. They are now rare. A payments terms contract, where the buyer must make more than a set number of payments, requires an additional vendor statement setting out the cost of the vendor finance under the Sale of Land Act 1962.Read the answer →What are water rights when buying rural or regional property?In Victoria the right to use water and to hold water shares is governed by the Water Act 1989, and water shares are recorded separately on the Victorian Water Register, where the Registrar of Titles is also the Registrar of Water Shares. Water entitlements do not automatically pass with the land, so a buyer of rural or regional property needs to check what water rights, if any, are included.Read the answer →What are combustible cladding charges, and who pays them on a sale?Some Victorian buildings have a cladding rectification charge associated with a council funding arrangement. The charge may be secured against the land and can affect a purchaser after settlement. The parties should establish the legal basis of the charge, the amount outstanding, future instalments and who is liable under the statute, agreement and contract. Do not assume every cladding-related cost is treated the same way.Read the answer →How do you make sure you are buying the right property?The way to confirm you are buying the property you inspected is to check the plan, any survey and the contract together, matching the title and lot description to the physical property, its boundaries and improvements. Unit numbers on doors and lot numbers on a plan do not always line up, and without a survey, boundaries rely on the plan and observation of fences.Read the answer →What is the difference between an electronic and a paper certificate of title?Victoria has moved to electronic certificates of title. All titles issued after the relevant date are electronic, existing paper titles remain valid until replaced on the next dealing, and a paper title must be converted to electronic to complete a dealing in an Electronic Lodgement Network. There is no longer a duplicate paper title handed over at settlement.Read the answer →