What's the purchase process to buy a property in Australia?

Authored by the expert who managed and guided the team behind the Australia Property Pack

Everything you need to know before buying real estate is included in our Australia Property Pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Australia. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Australian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Sydney, Melbourne, and Brisbane. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

How much can I actually borrow to buy a property in Australia?

Australian lenders typically allow you to borrow up to 80% of a property's purchase price with a standard home loan.

Your borrowing capacity depends primarily on your income, existing debts, living expenses, and credit history. As of September 2025, most major banks require a minimum 20% deposit for standard loans, though some lenders offer loans with deposits as low as 5% if you pay Lenders Mortgage Insurance (LMI).

Online calculators from CommBank, NAB, ANZ, and BOQ can provide quick estimates, but your actual borrowing power requires a full financial assessment including pay slips, bank statements, and debt obligations. The Australian Prudential Regulation Authority (APRA) serviceability buffer requires lenders to assess your ability to repay at interest rates 3% higher than the current rate.

Most lenders will consider your gross annual income and apply debt-to-income ratios, typically allowing total debt payments (including the new mortgage) of up to 6-8 times your annual income. If you're purchasing an investment property, rental income can be included in calculations at 75-80% of expected rent.

It's something we develop in our Australia property pack.

What government fees, taxes, and stamp duties will I need to budget for?

Stamp duty represents the largest government cost when buying property in Australia, varying significantly by state and property value.

As of September 2025, stamp duty rates range from 1.25% to 6.4% of the purchase price depending on your state and property value. New South Wales charges up to 5.5% for properties over $3 million, while South Australia tops out at 5.5% for properties exceeding $500,000. Victoria applies rates up to 6.25% for properties over $960,000.

First home buyers often receive substantial concessions or full exemptions in many states. Victoria offers full exemptions for first home buyers purchasing properties under $600,000, while New South Wales provides concessions for properties under $800,000. Queensland first home buyers receive full exemptions for properties under $500,000.

Additional government fees include title registration costs (typically $150-$500), transfer fees, and potential land tax depending on property value and your total land holdings. Some states also charge mortgage registration fees of $100-$200.

Foreign buyers face additional charges including Foreign Investment Review Board (FIRB) fees ranging from $13,200 for properties under $1 million to $107,100 for properties over $10 million, plus annual foreign ownership surcharges of 0.75-4% in most states.

State	Stamp Duty Rate Range	First Home Buyer Concession
New South Wales	1.25% - 5.5%	Full exemption under $650,000, partial up to $800,000
Victoria	1.4% - 6.25%	Full exemption under $600,000, partial up to $750,000
Queensland	1% - 5.75%	Full exemption under $500,000, partial up to $550,000
Western Australia	1.9% - 5.15%	Full exemption under $430,000, partial up to $530,000
South Australia	1% - 5.5%	Full exemption under $500,000, partial up to $575,000
Tasmania	1.75% - 4.25%	Full exemption under $400,000, partial up to $500,000
ACT	1.2% - 4.54%	Full exemption under $500,000, partial up to $750,000

Do I need pre-approval from a lender before I start making offers?

Pre-approval isn't legally required but is strongly recommended before making property offers in Australia.

Over 65% of Australian property buyers have missed out on properties due to lacking pre-approval, according to real estate industry data. Pre-approval demonstrates to sellers that you're a serious buyer with confirmed financing capacity, significantly strengthening your negotiating position in competitive markets.

The pre-approval process involves lenders assessing your creditworthiness, income, debts, and expenses to indicate how much they might lend. This assessment is subject to satisfactory property valuation and no adverse changes in your financial circumstances. Most pre-approvals remain valid for 60-90 days.

Pre-approval is particularly crucial for auction purchases, where you cannot include finance conditions and must complete the purchase unconditionally if your bid is successful. Without pre-approval, you risk being unable to secure finance and losing your deposit.

The pre-approval process typically takes 1-2 weeks and requires recent pay slips, bank statements, tax returns, and identification documents. Some lenders offer conditional approvals within 24-48 hours for straightforward applications.

What's the typical process of making an offer and having it accepted?

The offer process in Australia varies significantly between private treaty sales and auctions.

For private treaty sales, you submit a written offer through your real estate agent or directly to the seller's agent, typically including conditions such as "subject to finance" or "subject to building inspection." The seller may accept your offer, reject it, or make a counter-offer. Negotiations can continue until both parties reach agreement on price and terms.

Your offer should specify the purchase price, deposit amount (typically 5-10% of purchase price), settlement period (usually 30-90 days), and any conditions. Common conditions include finance approval within 14-21 days, satisfactory building and pest inspections within 7-14 days, and review of strata reports for apartments.

For auction purchases, you must register before bidding and cannot include any conditions. The highest bid above the reserve price wins, creating an unconditional contract immediately. You typically have 30 minutes after winning to sign the contract and pay the deposit.

Once an offer is accepted in private treaty, you enter a cooling-off period (where applicable) before the contract becomes legally binding. The seller's solicitor will prepare the contract of sale, which your conveyancer should review before you sign.

It's something we develop in our Australia property pack.

How does the cooling-off period work and what are my rights during it?

Most Australian states provide a cooling-off period for private treaty property purchases, allowing buyers to withdraw from the contract within a specified timeframe.

The cooling-off period varies by state: New South Wales provides 5 business days, Victoria offers 3 business days, Queensland gives 5 business days, and Western Australia allows 5 business days. South Australia provides 2 business days, while Tasmania and Northern Territory have 5 business days.

During the cooling-off period, you can withdraw from the contract for any reason by providing written notice to the seller. However, you'll forfeit a penalty, typically 0.25% of the purchase price in most states. This penalty is deducted from your deposit or paid separately if you haven't yet paid a deposit.

Important exceptions apply: auction sales generally have no cooling-off period, making your bid immediately legally binding. Some states also exclude cooling-off periods for commercial properties or when you purchase through certain methods.

You can waive your cooling-off period by signing a waiver, often requested in competitive markets, but this eliminates your legal right to withdraw penalty-free. During the cooling-off period, you should arrange building inspections, finalize your finance, and review all contract terms with your solicitor.

What's the difference between buying at auction and buying through private treaty?

Auction and private treaty sales operate under fundamentally different rules and processes in Australia.

Aspect	Auction	Private Treaty
Conditions	Unconditional purchase, no finance or inspection clauses allowed	Conditional offers permitted (subject to finance, inspections, etc.)
Cooling-off Period	No cooling-off period in most states	3-5 business days cooling-off period (varies by state)
Negotiation	Public bidding process, no private negotiation during auction	Private negotiations between buyer and seller possible
Deposit	Full deposit (typically 10%) due immediately after winning bid	Deposit due on contract exchange, flexible timing
Finance	Must have pre-approval and confirmed funds before bidding	Can make offers subject to finance approval
Inspections	Must complete all inspections before auction day	Can include inspection conditions in offer
Timeline	Settlement typically 30-42 days after auction	Settlement period negotiable, usually 30-90 days

Auction purchases require complete preparation beforehand, including finance pre-approval, building inspections, strata reports (for units), and legal advice. You cannot withdraw after winning without losing your full deposit and facing potential legal action.

Private treaty sales offer more flexibility but may involve longer negotiation periods. You can include protective conditions and have time during the cooling-off period to complete due diligence. However, popular properties may attract multiple offers, creating competitive pressure similar to auctions.

When do I need to engage a conveyancer or solicitor, and what do they do for me?

You should engage a conveyancer or solicitor before signing any contract to ensure legal protection throughout the purchase process.

Conveyancers and property lawyers handle the legal aspects of property transfer, including reviewing contracts, conducting property searches, managing settlement, and ensuring clear title transfer. They typically charge $800-$2,500 depending on property complexity and location.

Your legal representative conducts essential searches including title searches to verify ownership, council searches for zoning and development restrictions, and water authority searches for connection details. For apartments and townhouses, they review strata reports and bylaws to identify potential issues or upcoming special levies.

During the contract review, they identify potentially problematic clauses, ensure conditions protect your interests, and explain your rights and obligations. They coordinate with your lender to ensure finance approval aligns with contract requirements and settlement timeframes.

At settlement, your conveyancer calculates final adjustments for rates, rent, and strata fees, ensures mortgage funds are released correctly, and facilitates the legal transfer of ownership. They register the transfer with state authorities and provide you with the official title deed.

1. Review and explain all contract terms and conditions2. Conduct comprehensive property searches and title verification3. Liaise with lenders regarding finance requirements and settlement4. Calculate settlement adjustments for rates, taxes, and fees5. Coordinate settlement logistics and fund transfers6. Register property transfer with state authorities7. Resolve any legal issues that arise during the process

What inspections and reports should I arrange before signing anything?

Professional building and pest inspections are essential before signing any property contract in Australia.

Building inspections cost $300-$600 and identify structural issues, safety concerns, and maintenance problems. Qualified inspectors examine foundations, roofing, plumbing, electrical systems, and overall property condition. They provide detailed reports highlighting immediate safety concerns, required repairs, and estimated costs for remediation.

Pest inspections ($150-$300) detect termite activity, wood decay, and other pest-related damage. Australia's climate creates ideal conditions for termites, making pest inspections particularly critical. Inspectors examine subfloor areas, wall cavities, and timber structures for signs of current or previous infestations.

For apartments and townhouses, obtain strata inspection reports detailing the building's financial position, maintenance history, upcoming special levies, and any structural issues affecting common property. These reports cost $200-$500 but can reveal expensive surprises like required building repairs or financial mismanagement.

Additional specialized inspections may include pool and spa safety compliance ($200-$400), asbestos testing for older properties ($400-$800), and soil contamination assessments for industrial areas ($500-$1,500). Properties in flood-prone areas benefit from flood risk assessments and drainage evaluations.

Schedule all inspections as early as possible after contract exchange, ensuring you have time to negotiate repairs or withdraw during the cooling-off period if serious issues are discovered.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How does settlement work and how long does it usually take in Australia?

Settlement is the final stage where legal ownership transfers from seller to buyer, typically occurring 30-90 days after contract exchange.

The settlement period is negotiated during the offer stage, with standard timeframes being 42 days for established properties and 60-90 days for off-the-plan purchases. Your conveyancer coordinates with the seller's legal representative, your lender, and relevant authorities to ensure all requirements are met.

Before settlement, your lender conducts a final property valuation and confirms your financial position hasn't changed significantly since pre-approval. You'll receive a settlement statement showing exact amounts required, including final loan drawdown, government fees, and adjustment calculations for rates and other charges.

On settlement day, your conveyancer attends the settlement meeting (usually held at your lender's offices) where documents are signed, funds are transferred, and keys are exchanged. Electronic settlements are becoming increasingly common, reducing the need for physical meetings.

Final inspections should be completed 24-48 hours before settlement to ensure the property remains in the agreed condition and any required repairs have been completed. Any issues discovered can delay settlement or require financial adjustments.

After successful settlement, title registration with state authorities typically takes 1-2 weeks, after which you receive the official certificate of title. Building insurance should commence from settlement day, as you become legally responsible for the property.

What upfront costs beyond the deposit do buyers often forget about?

Australian property buyers often underestimate several significant upfront costs beyond their deposit and purchase price.

Cost Category	Typical Amount	Description
Stamp Duty	1.25% - 6.4% of purchase price	State government transfer duty, varies by state and property value
Lenders Mortgage Insurance	1% - 3% of loan amount	Required for deposits under 20%, paid upfront or added to loan
Building/Pest Inspections	$450 - $900	Professional assessments of property condition and pest issues
Legal/Conveyancing Fees	$800 - $2,500	Solicitor or conveyancer fees for contract review and settlement
Loan Application Fees	$600 - $1,200	Lender establishment and application processing fees
Property Insurance	$500 - $2,000 annually	Buildings and contents insurance, required from settlement
Moving Costs	$800 - $3,000	Professional movers, truck rental, or relocation services

Additional forgotten costs include utility connection fees ($200-$500), council rate adjustments, water and sewer connection charges, and immediate maintenance requirements. First-time buyers often overlook ongoing costs like council rates, strata fees for apartments, and regular maintenance expenses.

FIRB application fees for foreign buyers range from $13,200 to over $100,000 depending on property value, representing a significant additional cost for international investors. Foreign buyer duty surcharges in most states add another 7-8% to the total purchase cost.

Budget approximately 7-10% of the purchase price for total transaction costs including stamp duty, legal fees, inspections, and other upfront expenses. This percentage increases for lower-priced properties due to fixed-cost components.

What common mistakes do first-time buyers in Australia make during the process?

First-time Australian property buyers frequently make several costly mistakes during the purchase process.

1. **Insufficient budget planning**: Underestimating total costs beyond the deposit, particularly stamp duty, legal fees, and LMI premiums2. **Skipping pre-approval**: Making offers without confirmed finance capacity, leading to missed opportunities or contract failures3. **Inadequate property research**: Failing to research suburb trends, comparable sales, and local market conditions before making offers4. **Avoiding professional inspections**: Skipping building and pest inspections to save money, potentially discovering expensive issues later5. **Rushing the process**: Making hasty decisions without proper due diligence, particularly at auctions or in competitive markets6. **Ignoring additional costs**: Overlooking ongoing expenses like council rates, strata fees, insurance, and maintenance requirements7. **Poor contract understanding**: Signing contracts without legal review or full comprehension of terms and conditions8. **Inadequate insurance planning**: Delaying building insurance arrangements until after settlement, creating coverage gaps

Many first-time buyers also overextend themselves financially by borrowing maximum amounts without considering interest rate rises, job security, or unexpected expenses. The Reserve Bank of Australia's serviceability assessments help prevent some over-borrowing, but buyers should maintain conservative debt-to-income ratios.

Location mistakes include buying in areas without researching transport links, school zones, future development plans, or flood risks. Emotional decision-making often leads to overpaying in competitive markets without proper valuation analysis.

It's something we develop in our Australia property pack.

What contract terms or conditions cause the most confusion and how can I avoid issues?

Several contract terms frequently confuse Australian property buyers and create disputes during the purchase process.

"Subject to finance" conditions protect buyers if loan approval fails, but the specific timeframe, loan amount, and approval criteria must be clearly defined. Vague finance clauses can lead to disputes if buyers attempt to withdraw for reasons beyond legitimate finance rejection. Ensure your finance condition specifies exact loan amounts, interest rates, and approval deadlines.

Settlement period confusion arises when buyers don't understand the difference between "settlement date" and "possession date." Settlement is the legal transfer of ownership, while possession (receiving keys) typically occurs immediately after. Some contracts allow delayed possession, meaning you own the property but cannot occupy it immediately.

Deposit forfeiture clauses specify when and how much of your deposit you lose if the contract fails. Standard contracts typically allow sellers to keep the full deposit if buyers default, but cooling-off period withdrawals usually incur smaller penalties (0.25% of purchase price).

Special conditions sections often contain property-specific requirements like pool compliance, heritage restrictions, or easement acknowledgments. These clauses can significantly impact your intended use of the property and should be carefully reviewed with your conveyancer.

Chattels and fixtures lists specify what stays with the property versus what the seller removes. Disputes commonly arise over items like light fittings, curtains, garden plants, and built-in appliances. Ensure comprehensive lists are attached to contracts detailing all included and excluded items.

1. Request written clarification for any ambiguous terms before signing contracts2. Engage a qualified conveyancer to review all conditions and explain implications 3. Ensure finance conditions specify exact loan amounts, terms, and approval timeframes4. Verify settlement dates align with your moving and finance arrangements5. Review chattels and fixtures lists comprehensively to avoid possession day disputes6. Understand penalty clauses for contract withdrawal during different periods7. Clarify any special conditions that might restrict property use or modifications

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Stryve - Stamp Duty by State Australia 2025
2. RealEstate.com.au - 5 Things You Should Know About Pre-Approval
3. Westpac - Home Loan Calculator
4. WiseBuy Group - Transfer Duty Rates for 2025
5. NAB - First Home Pre-Approval
6. BOQ - Borrowing Power Calculator
7. CM Law - Mortgage Pre-Approval Property Investment
8. CommBank - How Much Can I Borrow Calculator