Introduction
Property settlement in Australia represents the legal process where ownership of a property officially transfers from seller to buyer. Starting preparation early can significantly reduce stress and risk during this critical period. Whether you’re buying your dream home or investing in your next property, consulting with Eliza Legal’s property settlement lawyers early in the process can make all the difference.
Settlement periods typically range from 30-90 days across Australia, though these timeframes vary by state and territory. Each jurisdiction has different cooling-off periods, stamp duty requirements, and settlement protocols that buyers and sellers must navigate.
Key Takeaways
- Begin preparations before exchanging contracts with finance pre-approval and property inspections
- Engage a conveyancer immediately after exchange to manage legal requirements
- Allow 4-6 weeks before settlement for document preparation and financial arrangements
- Complete a thorough final inspection in the days before settlement
- Understand the differences between electronic (PEXA) and manual settlement processes
Timeline Overview for Property Settlement
Before Exchange of Contracts
The preparation for settlement begins well before contracts are exchanged. During this phase, obtain finance pre-approval to understand your borrowing capacity, order building and pest inspections to identify any issues, and determine any special conditions you want included in the contract. This groundwork helps avoid surprises later in the process.
Immediately After Exchange
Once contracts are exchanged, engage a licensed conveyancer or solicitor without delay. You’ll need to provide identification documents, pay the deposit, and notify your lender to begin formal mortgage application processes. This is also when you should arrange building insurance as you may be responsible for the property even before settlement.
“The period immediately after contract exchange is critical – this is when the legal machinery of property transfer begins moving. Having all your documentation ready can save weeks of potential delays.”
Eliza Legal
4-6 Weeks Before Settlement
During this typical window, confirm the exact settlement date with your agent and conveyancer. Request mortgage payout figures if you’re selling, check title details, and ensure mortgage discharge requirements are underway. Your conveyancer will prepare transfer documents and conduct final searches.
1-7 Days Before Settlement
Complete your final property inspection to verify the property is in the expected condition. Sign any outstanding transfer documents and arrange cleared funds for settlement adjustments and stamp duty payments if required at settlement. Check that all conditions on the contract have been satisfied.
Day of Settlement
On settlement day, your conveyancer or settlement agent, bank representatives, and possibly the other party’s representatives will finalise the transaction. In electronic settlements via PEXA, this happens digitally. For manual settlements, representatives physically meet to exchange documents and cheques. Once completed, keys are released to the buyer.
Legal and Financial Preparation Steps
Engaging Conveyancing Support
A conveyancer or solicitor manages the legal aspects of property transfer. Their services typically cost between $800-2,500 depending on complexity. They’ll need copies of the contract, identification documents, and details of your financing arrangements. Engaging them early gives them time to identify and address potential issues.
Finance Milestones
There’s a significant difference between pre-approval and unconditional approval. Pre-approval is an indication from the lender about how much you might borrow, while unconditional approval is their commitment to lend. The lender will require a property valuation and will set conditions that must be satisfied before settlement. Allow at least 2-3 weeks for this process.
Stamp Duty and Government Charges
Each Australian state has different rules about when stamp duty must be paid. In some states, it’s due at settlement, while others allow up to three months after settlement. First home buyers and certain property types may qualify for concessions. Understanding these requirements early helps you prepare the necessary funds.
Mortgage Discharge and Title Transfer
If you’re selling a mortgaged property, request payout figures from your lender at least three weeks before settlement. The discharge process can take 10-15 business days, so starting early prevents delays. Your conveyancer will prepare transfer documents for lodgement with the relevant state authority.
Settlement Adjustments
Rates, water bills, and strata levies are typically adjusted at settlement, so the seller pays for their period of ownership and the buyer pays going forward. Your conveyancer calculates these adjustments based on the latest notices and bills, which you should provide as soon as possible.
Essential Inspections and Reports
Building and pest inspections should be arranged before exchange or during the cooling-off period. These reports cost $400-800 combined but can save thousands by identifying structural issues, pest infestations, or safety concerns. Review these reports thoroughly and seek clarification on any concerning findings.
For apartments or units, obtain strata inspection reports and certificates. These documents reveal the financial health of the owners corporation, planned works, and any disputes that might affect your ownership.
The final inspection usually occurs 2-3 days before settlement. Use this opportunity to verify that:
- All included fixtures and fittings remain in place
- The property is in the same condition as when purchased
- Any agreed repairs have been completed
- All rubbish has been removed
- Appliances and systems are functioning correctly
Electronic vs Manual Settlement
Property Exchange Australia (PEXA) facilitates electronic settlements across Australia. This system allows funds transfer, document lodgement, and settlement to occur simultaneously online. Most Australian settlements now use PEXA, reducing paper documents and enabling faster processing.
In PEXA, your conveyancer creates a digital workspace where all parties collaborate. Documents are prepared and signed electronically, with settlement occurring at the scheduled time without physical attendance. The process typically requires preparations to be finalised 1-2 days before the settlement date.
Manual settlements still occur when one party doesn’t use PEXA or when technical issues arise. These require physical attendance at an agreed location where documents and bank cheques are exchanged. Manual settlements involve more paperwork and potential for delays.
Practical Moving Logistics
Book removalists 4-6 weeks in advance, especially if moving during busy periods. Confirm dates once settlement is scheduled, but build in flexibility as settlement dates can change.
Arrange home insurance to begin from the contract date (for buyers) or continue until settlement completion (for sellers). Contact utility providers at least one week before moving to disconnect or connect services. Set up mail redirection through Australia Post at least a week before moving.
On settlement day, keys are typically collected from the real estate agent once settlement is confirmed. If the property has tenants, special arrangements may be needed regarding access and notice periods in accordance with state tenancy laws.
Common Risks and Prevention
Finance falling through remains one of the biggest settlement risks. Reduce this risk by obtaining written pre-approval, avoiding new credit applications during the settlement period, and maintaining regular communication with your lender.
Missing or incorrect documentation can cause significant delays. Provide identification documents early, complete discharge forms accurately, and respond promptly to any verification requests from your conveyancer or lender.
Unexpected adjustments or unpaid charges sometimes appear at settlement. Check council and strata records early, request current bills from the seller, and budget for potential adjustments to avoid last-minute financial stress.
Pre-Settlement Checklist
Pre-exchange:
- Obtain finance pre-approval in writing
- Complete building and pest inspections
- Review and prepare special conditions for the contract
Post-exchange (4-6 weeks out):
- Engage a conveyancer and provide required documents
- Order title searches and strata reports
- Confirm settlement date with all parties
Final week:
- Complete final property inspection
- Arrange cleared funds for settlement
- Sign transfer and mortgage documents
Settlement day:
- Verify settlement completion with your conveyancer
- Collect keys from the agent
- Update utilities and insurers with new address details
Frequently Asked Questions
How long does settlement usually take in Australia?
Most settlements take 30-90 days, with 42 days (6 weeks) being average. The timeframe varies by state and can be negotiated between parties.
What happens if finance is not approved before settlement?
If you have a finance condition in your contract, you may be able to extend the settlement period or terminate the contract. Without this condition, you risk losing your deposit and may face legal action.
Who is responsible for paying stamp duty and when must it be paid?
The buyer pays stamp duty. Payment timing varies by state – in some states it’s due at settlement, while others allow payment within three months after settlement.
Can the settlement date be changed and how is that agreed?
Yes, settlement dates can be changed if both parties agree. This is documented through a formal variation of contract signed by all parties.
What is included in the final inspection and what if issues are found?
The final inspection verifies the property’s condition matches what was purchased. If issues are found, your conveyancer can negotiate solutions, potentially including settlement delays or financial compensation.
Conclusion
Successful property settlement requires early preparation, attention to detail, and professional guidance. By following the timeline outlined above and completing necessary tasks well in advance, you can avoid common pitfalls and enjoy a smooth transition to your new property.
For professional assistance with your property settlement, contact Eliza Legal. Their expert team can guide you through the entire process, from contract review to final settlement, helping you protect your interests and complete your property transaction with confidence.