How a home is bought, a guide by Dotto

An atlas of buying property, state by state

Plate III · Money with an offer

Holding deposits: how much, where it’s held, when it comes back

A holding deposit is money paid with an offer, before a contract binds, to show the offer is serious. In South Australia, Victoria, Queensland, the ACT and the Northern Territory, it comes back if the seller doesn’t accept the offer; the differences lie in how much can be asked, where it is held, and what happens to it once a contract is signed.

Charted on this plate VIC QLD SA WA ACT NT

The legend: six states, the same questions

For each state or territory whose pages describe money paid with an offer, the same questions: how much, where it sits, and when it is returned, answered where the state’s page answers them.

South Australia

How much
An agent can ask for a holding deposit of up to $100 when an offer is made.
Where it sits
Kept in trust.
When it comes back
If the offer isn’t accepted. If the buyer signs a contract and then cools off, the vendor can keep it.

Victoria

Deposit with a written offer
A written offer usually comes with a request for a deposit, in full or in part. This is the sale deposit rather than a separate holding deposit: no law sets the amount, and it is usually 10 per cent of the price.
Where it sits
With the seller’s agent, in a trust account until settlement, or moved to a legal practitioner’s or conveyancer’s trust account.
When it comes back
If the seller doesn’t accept the offer.

Queensland

How much
A buyer might be asked for a partial deposit when making an offer. It doesn’t guarantee the property.
When it comes back
If the seller rejects the offer.

Western Australia

Deposit on the offer and acceptance
WA describes the deposit paid with a private-sale offer, not a separate holding deposit. No deposit is required, though an amount can be negotiated. It is generally not more than 10 per cent of the price, and often considerably less.
Where it sits
Through an agent: with the seller’s agent in trust until settlement, or moved to the seller’s legal practitioner’s or settlement agent’s trust account. With no agent: in the trust account of the buyer’s settlement agent or solicitor, not directly with the seller.

Australian Capital Territory

How much
The agent may require a deposit with the offer. Access Canberra calls it “only a holding deposit”.
When it comes back
If the offer isn’t accepted, or if the buyer changes their mind. The deposit proper becomes legally payable on exchange of contracts.

Northern Territory

How much
Some agents may ask for a deposit.
When it comes back
If the seller doesn’t accept the offer. If the buyer is gazumped, it must be refunded in full.

What a holding deposit doesn’t do

Four of these pages make the same point in different words: money paid with an offer doesn’t take the property off the market.

  • NT Paying a deposit does not secure the sale; a buyer can be gazumped until contracts are signed and exchanged.
  • QLD A partial deposit doesn’t guarantee the property will be the buyer’s; the seller can still reject the offer.
  • ACT The offer isn’t legally binding until contracts are exchanged, which is when a binding contract is made and the deposit is paid.
  • VIC A property under offer can still be viewed and receive other offers until both sides agree and sign.

After the contract: when the real deposit falls due

The holding deposit is the small first step. The main deposit arrives on a timetable that also differs by state.

  • SA The deposit must be paid once the cooling-off period has expired, and is held in trust until settlement.
  • QLD Once the contract binds, the deposit is paid as the contract sets out, normally within two to three days.
  • ACT On exchange of contracts.
  • VIC A written offer is usually made with a deposit, in full or with the balance due by a date in the contract.

Four of these pages describe what happens to money paid if the buyer steps back during cooling-off. In Victoria, everything paid comes back except $100 or 0.2 per cent of the price, if that is greater. In South Australia, the vendor can keep the holding deposit. In Queensland the seller must refund it within 14 days, less a penalty of up to 0.25 per cent of the price. In the ACT, a 0.25 per cent fee can be taken from the deposit and the rest returned.

Victoria: releasing a deposit early

Victoria spells out when a buyer’s deposit can reach the seller before settlement. Today the contract must be unconditional, the buyer must be satisfied with the seller’s proof of debts, and the deposit can’t be released until 28 days after the contract was signed. The seller has to show that no debts are secured against the property, or that those debts total no more than 80 per cent of the sale price.

That process is changing. Consumer Affairs Victoria says that from 1 July 2027 the existing early-release process will be repealed, and buyer and seller will instead be able to agree to early release by a condition in the contract. From the same date, agents must not take their commission directly from a deposit released before settlement or rescission.