Buying property in Victoria: the conveyancing process explained

Buying property in Victoria is one of the most significant financial commitments most people make. The legal work involved is not complicated in principle, but it is precise: the process is governed by the Sale of Land Act 1962 (Vic), the Property Law Act 1958 (Vic), and, since 2018, mandatory electronic settlement through the PEXA platform. Understanding how the process works helps you make good decisions at each stage.

1. Before you find a property

The decisions made before you sign a contract have the biggest impact on the transaction. In particular, decide:

• Who is buying. The name on the contract is the name on the title. A change after signing can only be effected by a fresh transfer, which usually attracts additional duty.
• Whether you qualify for any duty concession. The principal place of residence concession, the first home buyer duty exemption or concession, off-the-plan concession and pensioner concession each have their own eligibility rules. The State Revenue Office of Victoria publishes the current thresholds.
• Finance in principle. Pre-approval reduces the risk of a subject-to-finance clause failing.

2. The contract of sale and section 32 statement

When you find a property, the vendor's agent will provide a contract of sale and a section 32 vendor statement. Together these are the key legal documents in a Victorian residential sale.

The section 32 statement is the vendor's mandatory disclosure of prescribed information: title, planning zoning and overlays, rates, outgoings, notices from authorities, services connected to the property, easements and, for units and apartments, owners corporation records. A defective section 32 statement can, in some circumstances, allow a purchaser to rescind.

The contract of sale contains the commercial terms — price, deposit, day of sale, settlement date — and the special conditions. A pre-signing legal review of both documents is money well spent. Once you sign, changing anything requires the vendor's agreement.

3. Cooling-off — and when it does not apply

Under section 31 of the Sale of Land Act 1962, purchasers of residential land generally have three clear business days after signing to cool off. To exercise cooling-off you serve a written notice on the vendor within the cooling-off period; the vendor may retain a penalty amount from the deposit.

Cooling-off does not apply to:

• Purchases at or before public auction.
• Purchases within three business days before or after a scheduled auction.
• Purchases where the property is used primarily for industrial or commercial purposes.
• Purchases where the purchaser is an estate agent or corporate body.
• Purchases greater than a prescribed amount, subject to the current threshold.

Because auction purchases have no cooling-off, having your contract reviewed before the auction is essential.

4. Conditions

Common conditions include:

• Subject to finance. The contract ends if you do not obtain unconditional finance approval by the specified date. You must give proper written notice within the finance period. Simply missing the date and doing nothing usually means the finance clause lapses and the contract becomes unconditional.
• Subject to building and pest inspection. Less common in Victoria than in some other states, but sometimes negotiated for older properties.
• Subject to sale of another property. Where the purchaser needs to sell an existing property first. Often paired with a "48-hour clause" allowing the vendor to require the purchaser to remove the condition if another offer is made.

5. Between contract and settlement

In the period between signing and settlement — commonly 30, 60 or 90 days — your lawyer and the vendor's representative complete a series of tasks:

1. Verification of identity for the electronic transfer.
2. Preparation and signing of the transfer of land document.
3. Preparation of duty forms for the State Revenue Office.
4. Ordering rates, water and land tax certificates and calculating adjustments.
5. Confirming discharge details with the vendor's lender.
6. Confirming your finance readiness with your lender.
7. Booking the settlement on PEXA and coordinating the workspace.

Any issues that emerge — encumbrances not disclosed, delays in finance, building work done without permits — are resolved during this window.

6. Stamp duty

Duty is calculated on the greater of the purchase price and the market value of the property. Concessions and exemptions can significantly reduce the amount payable. Foreign purchasers pay an additional duty on top of the general rate. Duty is paid at or around settlement.

7. Settlement day

Standard residential settlements in Victoria are conducted electronically. All parties log into a PEXA workspace at the agreed time; the workspace exchanges funds and documents in a single transaction. Once settlement is confirmed, the title is updated at Land Use Victoria and duty is remitted to the State Revenue Office. Your lawyer notifies the agent, who then releases the keys.

8. After settlement

• Confirmation of registered ownership from Land Use Victoria arrives within days.
• The council and water authority send updated notices in your name for the balance of the rating period.
• Land tax on the property (if applicable) is assessed from the following calendar year, based on ownership at 31 December.

Where the process most often goes wrong

• Signing a contract before it has been reviewed by a lawyer.
• Assuming cooling-off applies at auction.
• Missing a finance clause deadline.
• Buying in the wrong name for the intended long-term use.
• Not investigating an owners corporation properly.

If you are buying property in Victoria, arrange a pre-signing contract review before you commit. For the full transaction, see our residential conveyancing service.

Authoritative sources: the Sale of Land Act 1962 (Vic), the State Revenue Office of Victoria and Consumer Affairs Victoria publish current information on the legislation, duty and process.

Preparing before you sign

Most successful purchases in Victoria begin well before an offer is made. A prospective purchaser will typically have obtained finance pre-approval from their lender or broker, decided on the correct legal name in which the property will be held, and, where the purchase is for investment or through a related structure, confirmed the tax position with their accountant. Having these preliminary matters resolved allows the legal review of the contract of sale and the section 32 vendor statement to focus entirely on the property, rather than on questions that could have been dealt with earlier.

Common pitfalls between exchange and settlement

The period between signing a contract and settlement is the highest-risk phase of a purchase. Missed finance clause deadlines, late verification of identity, unresolved caveats on title, payments made from foreign accounts that arrive late in cleared funds, and last-minute changes to the incoming lender are the most common causes of delayed settlement. Each of these can be addressed well before the final week if the purchaser and their lawyer keep a shared calendar of critical dates.

Duty concessions and grants

Victorian purchasers may be eligible for one or more of the concessions administered by the State Revenue Office — the first home buyer duty exemption or concession, off-the-plan concession, principal place of residence concession, or pensioner concession — subject to eligibility criteria that change from time to time. Whether a concession applies to a particular purchase should be confirmed with reference to the current State Revenue Office material and, where required, with the client's tax adviser.