Victoria 9 min read
What actually happens on settlement day in Victoria
Settlement in Victoria is electronic, takes a few minutes, and almost never needs you in the room. Here is the whole day in order, including what happens if it slips.
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Most of settlement day happens without you.
Months of work go into it. Building inspections, finance approval, a contract you read twice and a deposit you handed over months ago. Then the day it all changes hands arrives, and you are at work, refreshing your phone. Your conveyancer is in an online workspace with the seller's conveyancer and both banks. Once everyone is ready, the money moves in a few minutes.
Here is the whole thing in order, and what to do if it goes sideways.
Settlement, in one paragraph
Settlement is the moment the balance of the purchase price goes to the seller and the title comes to you. Consumer Affairs Victoria puts it plainly: settlement is the date you pay the balance of the price, get the title and become the registered owner, and take possession. The seller sets the date in the contract, and the settlement period is usually 30 to 90 days (Consumer Affairs Victoria). Off the plan purchases in Clyde North or Botanic Ridge run much longer. If the plan of subdivision is not registered by the date in your contract, or within a default period of 18 months, you can end the contract and get your deposit back (Consumer Affairs Victoria).
Victorian settlements are electronic
Paper settlements are gone for ordinary transactions. Under section 106A of the Transfer of Land Act 1958 the Registrar of Titles determines which instruments must be lodged electronically, and will not accept paper lodgement of those instruments except where they cannot go through an Electronic Lodgment Network (Land Use Victoria). Three networks operate in Victoria: PEXA, Sympli and SPEAR. PEXA handles nearly all instrument types, and Consumer Affairs Victoria tells licensed conveyancers settling electronically to use it (Consumer Affairs Victoria).
What that means for you, in practice:
- There is no meeting. Nobody drives a bank cheque across town.
- Your conveyancer, the seller's conveyancer and both banks work inside one shared workspace, preparing the transfer of land, the discharge of the seller's mortgage and your new one.
- Funds move electronically at a booked time, and duty and lodgement happen inside the same transaction.
- Everyone's identity has to be verified first, and you sign a Client Authorisation that lets your conveyancer sign the electronic transfer as your agent (Land Use Victoria).
That authorisation is the reason you do not need to be present.
The week before
This is the busy part, and almost none of it is visible to you.
- Your conveyancer orders the rates, water and owners corporation certificates so the adjustments can be worked out.
- The Digital Duties Form is completed and the duty assessment is prepared in Duties Online (State Revenue Office).
- The transfer of land is drafted in the workspace and the seller's side is invited in.
- Your lender is chased for a firm figure and a settlement booking.
- Adjustments are calculated and a settlement statement comes to you, showing what you need in your account and by when.
- You do your final inspection.
The final inspection
You are entitled to inspect the property at any reasonable time in the week before settlement, and the contract sets out the seller's obligation to hand it over in the same condition it was in when it was sold (Consumer Affairs Victoria).
Take the contract and the vendor statement with you, because the section 32 tells you what is actually included. Check the goods named in the contract are still there. Run the hot water. Turn on the oven and every burner. Test the garage remote, the air conditioner, the rangehood and the dishwasher. Look for rubbish left in the garage or behind the shed.
If something is wrong, tell your conveyancer that same day. Not on settlement morning. There is very little room to fix anything raised on the day.
Settlement day itself
The clock moves around, but the order does not. It usually runs like this.
| Roughly when | What happens |
|---|---|
| Morning | Your bank does its final checks, confirms the loan funds and signs into the workspace. Your conveyancer checks every figure balances to the cent. |
| Before the booked time | All parties digitally sign and the workspace locks. Nothing changes after that unless it is reopened and everyone signs again. |
| The booked time | Funds move. Your lender pays the balance, the seller's lender is paid out and discharges its mortgage, duty is paid, and the transfer lodges with the Land Registry. |
| Minutes later | Settlement is confirmed. Your conveyancer calls or emails you, and the agent is authorised to release the keys. |
| Same day and after | Notices go to the council and the water authority so future rates come to you. The transfer is registered and your name appears on title. |
The only thing you have to get right on the day is having your own money where it was supposed to be. If you are contributing savings on top of the loan, those funds need to be cleared in the right account well beforehand. A transfer sent on settlement morning may not arrive in time.
The adjustments, and why the final figure is not the contract price
Rates and outgoings get split between you and the seller. The seller is responsible up to and including settlement day, and you are liable from the day after (Consumer Affairs Victoria).
| What | How it is treated |
|---|---|
| Council rates | Apportioned to the day. If the seller paid the year in advance, you reimburse the unused portion. |
| Water | The authority's information statement sets out what is owing, and service charges are apportioned the same way. |
| Owners corporation fees | Apportioned for the current levy period if the property is in an owners corporation. |
| Land tax | Usually not adjusted at all any more. See below. |
Land tax, and the change a lot of people missed
Under a contract signed on or after 1 January 2024, a vendor cannot pass their land tax on to you where the sale price is below the threshold. From 1 January 2026 that threshold is $10,700,000, adjusted annually by CPI and rounded to the nearest $100,000 (State Revenue Office). A clause that tries to make you pay it is void, and including one is an offence.
The same applies to a windfall gains tax liability that was assessed and served before the contract was signed. A vendor has not been able to pass one of those on since 1 January 2024 (State Revenue Office).
So if you are buying in Cranbourne East, land tax should not appear on your settlement statement. If it does, ask why.
Duty
Duty is almost always paid at settlement, out of the workspace, by your conveyancer. It has to be paid before the transfer can be registered, and if it is not paid within 30 days of settlement, penalty tax and interest may apply (State Revenue Office). First home buyers often pay less or nothing, depending on the price and their circumstances, which is covered in our guide to first home buyer duty and grants.
When settlement is delayed
It happens. Often it is a lender.
The common causes:
- the lender is not ready, or the funds are not cleared
- the seller's lender has not authorised the discharge of its mortgage
- a figure in the workspace does not balance and has to be reworked
- a complex duty matter that needed to be lodged 30 days before settlement went in late (State Revenue Office)
- the plan of subdivision is not registered yet on an off the plan purchase
- a problem found at the final inspection is still unresolved
A missed booking is not automatically a catastrophe. Workspaces get rebooked for later that day or the next business day, and everyone gets on with it. What matters is who caused it, because the contract decides who wears the cost.
If you are the party who cannot settle, the contract will normally let the seller charge you interest for every day you are late. The rate that applies to you is in the particulars of sale, so check your own contract. Victoria also has a statutory penalty interest rate, fixed under the Penalty Interest Rates Act 1983, which has sat at 10% a year since 1 February 2017 (Supreme Court of Victoria). Some contracts set their default rate by reference to it.
If a delay drags on, the party not in default can serve a written default notice giving the other side a set period to put things right. If it is not put right in that period, the contract can be ended, and for a buyer that puts the deposit at risk. The notice period and the consequences live in the general conditions of your contract. Read them before you need them.
One honest limit. If a delay turns into a genuine dispute, about damage or a claim for loss, that is work for a solicitor. A licensed conveyancer does conveyancing work. We cannot run a dispute for you, and if you get anywhere near that line we will tell you straight and help you find someone who can.
Questions we get asked
Do I need to be there on settlement day?
No. Settlement is an official process conducted between the conveyancers and the lenders (Consumer Affairs Victoria). You already signed the Client Authorisation that allows your conveyancer to sign the electronic transfer on your behalf, so there is nothing left for you to sign on the day.
What time will settlement actually happen?
It depends on the booking, and bookings move. Do not tell the removalist to meet you at 9am when settlement is booked for the afternoon. Book them late in the day, and have a plan for the next morning.
Can I move in before settlement?
Not unless the seller agrees in writing and the contract allows it. Early possession changes who carries the risk if something is damaged, and can affect your position if a problem turns up later. Talk to us first.
What if the property is damaged between the contract and settlement?
That is exactly what the final inspection is for. The seller has to hand the property over in the same condition it was in when it was sold (Consumer Affairs Victoria). Raise it with your conveyancer immediately, in writing, with photographs and a date. Depending on your contract there may be a right to have it repaired, or an amount held back at settlement until it is.
When do the rates become mine?
From the day after settlement. The seller carries them up to and including settlement day (Consumer Affairs Victoria).
Before your settlement date, come and talk to us
The easiest time to sort out a settlement problem is three weeks out, not three days. If you are buying in Cranbourne, Clyde, Lynbrook or anywhere else across the corridor, we act for buyers from contract through to keys, and our office is on High Street in Cranbourne if you would rather sit down with someone.
Send us the contract and the section 32 before you sign, if you can. If you have already signed, we can still pick it up from here. Ask us for a quote, or get in touch and tell us your settlement date.
This article is general information about Victorian conveyancing and is not legal advice for your particular transaction. Speak to us about your specific circumstances.
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