Property settlement day guide
By Ali Hasani, Founder and Principal Mortgage Broker at Buyvest, MFAA accredited. Last updated July 2026. Settlement rules described here are NSW specific. Lender requirements vary.
This guide covers what happens on the day, what your lender needs before it will fund, the clearance certificate and adjustments that change the final figure, and what a late settlement costs.
The short version: NSW settlement is electronic and runs 42 days from exchange as standard. There is nothing to attend. Before a lender will fund, it needs signed loan documents, certified ID and a certificate of currency naming it as interested party. Adjustments add roughly $500 to $3,000 to the amount due, and settling late attracts penalty interest of around 10% to 12% a year.
What happens at settlement?
At settlement the balance of the purchase price moves to the seller, title transfers, and the keys are released. In NSW it happens electronically through PEXA, with both conveyancers and both lenders signing into a shared workspace rather than meeting.
Settlement is the moment the transaction completes. The lender advances the loan, the buyer's remaining funds go in alongside it, the seller's mortgage is discharged from the proceeds, title transfers and the agent releases the keys.
NSW mandated electronic lodgement for transfers, mortgages and discharges, so this now runs through an electronic settlement platform, in most cases PEXA. Both conveyancers and both lenders sign into a shared workspace, agree the figures to the cent, and the exchange completes in an hour or two. There is nowhere to turn up to. The conveyancer confirms when it is done, and the standard NSW settlement period is 42 days from exchange unless the contract says otherwise.
What does the lender need before it will fund?
Signed loan documents, correctly certified identification, and a certificate of currency for building insurance naming the lender as an interested party. Without all three the lender cannot book settlement, and missing insurance is one of the most common late problems.
This is the part a broker actually controls, and it is where avoidable delays come from. Three things have to be with the lender before it will book settlement.
Loan documents signed and returned. These arrive after formal approval and need to come back promptly, because the lender's settlement team needs time to certify them before a date can be locked. Days lost here move the settlement date, not the paperwork deadline.
Certified identification in the exact form the lender accepts. Certification by the wrong category of person, or details that do not match the contract, sends it back.
A certificate of currency for building insurance. Lenders will not release funds without proof the security is insured, and the certificate has to show the policy active from the settlement date, the correct property address, and the lender named as an interested party. This one arrives late more often than anything else, because buyers assume the conveyancer has handled it and the conveyancer assumes the buyer has.
Cleared funds in the nominated account complete the set. Our pre-approval guide covers the earlier stages of the same process.
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What is an ATO clearance certificate?
A clearance certificate confirms the seller is an Australian tax resident. Where the seller does not provide one, the buyer is required to withhold 15% of the purchase price and pay it to the ATO instead of the seller.
This one surprises most first home buyers, because it is the seller's document and the buyer's problem. A clearance certificate from the ATO confirms the seller is an Australian tax resident. Where the seller produces one, nothing happens. Where they do not, the obligation falls on the buyer to withhold 15% of the purchase price and remit it to the ATO rather than paying it to the seller.
The seller recovers it later through their tax return, so it is not lost money, but it changes the settlement figures and it has to be handled correctly on the day. Certificates take time to issue, and delays in getting them are now among the most common reasons settlements move. The conveyancer chases this, but it is worth knowing it exists rather than meeting it a week out.
What are settlement adjustments?
Adjustments split the year's council rates, water and strata levies between seller and buyer at the settlement date. The seller has usually paid ahead, so the buyer reimburses the unused portion, commonly adding $500 to $3,000 to the amount due.
Council rates, water service charges and strata levies are billed for a period, and the seller has usually paid the current one in advance. Adjustments divide those costs at the settlement date, so the buyer reimburses whatever covers the time after they take ownership.
Water usage is generally read to the settlement date and paid by the seller, while the fixed service charge is apportioned. Strata levies are apportioned across the current quarter. Land tax is usually cleared by the seller. Across all items the total commonly lands between $500 and $3,000 and is added to what the buyer pays.
The conveyancer calculates them and issues a settlement statement a few days beforehand. That statement is the first time most buyers see the exact figure they need, which is why it is worth reading on the day it arrives rather than the night before.
What happens if settlement is delayed?
Around one in five settlements is delayed. The party at fault is generally liable for penalty interest on the outstanding balance from the contract date, commonly 10% to 12% a year, and the contract sets the remedies from there.
Roughly one in five settlements moves. The usual causes are lender documentation not ready, clearance certificate problems, buyers underestimating the funds required, and disputes arising from the pre-settlement inspection.
A delay is not neutral. Under the standard contract the party at fault becomes liable for penalty interest on the outstanding balance, running from the contractual settlement date at a rate the contract specifies, commonly 10% to 12% a year. On a $700,000 balance that is meaningful within days, not months. Prolonged failure to settle can escalate to a notice to complete and the remedies that follow it, which is a conveyancer's territory rather than a broker's.
What is the pre-settlement inspection for?
The pre-settlement inspection confirms the property is in the condition the contract described, and that anything included in the sale is still there. It is the last point at which a problem can be raised before ownership transfers.
The inspection has a narrow purpose: confirming the property matches the condition the contract described, and that fixtures, appliances and inclusions listed in the contract are still present and working. It usually happens a few days before settlement, arranged by the buyer through the agent, which leaves room to raise something without forcing a delay.
Where a problem is found, documentation is what gives the conveyancer something to work with. From a finance point of view there is one thing worth flagging: if the resolution is a reduction in the purchase price, the lender has to reassess. The approval was issued against a specific price and a specific LVR, and changing the price changes both. A modest reduction agreed without telling the lender can create a bigger problem than the defect did. Our bank valuations guide covers how the property side is assessed.
What happens after settlement?
The conveyancer lodges the transfer and confirms settlement has completed, usually the same day. The buyer collects keys, changes locks, connects utilities and updates addresses. Registration of the new ownership is handled by the conveyancer rather than the buyer.
The conveyancer lodges the transfer and confirms completion, usually within hours. Registration of the new ownership is part of that process and does not require anything from the buyer.
What does fall to the buyer is practical: collecting keys from the agent, changing locks and any security codes, connecting electricity, gas, water and internet, and updating addresses with banks, insurers and service providers. The building insurance arranged before settlement continues from that date, and adding contents cover is usually the next step. The loan itself begins immediately, so the first repayment date is worth confirming rather than assuming.
Frequently asked questions
How long after exchange is settlement?
In NSW 42 days is the standard settlement period, and it is negotiable within the contract. Off the plan and construction purchases run to their own timing, following registration of the plan and issue of the occupation certificate rather than a fixed date.
Do you attend your own settlement?
No. Electronic settlement runs in a shared online workspace, so there is nothing to attend. Both conveyancers and both lenders sign in, funds and title move together, and the conveyancer confirms completion once it is done.
What does the lender need before settlement?
Loan documents signed and returned, identification certified in the form the lender accepts, and a certificate of currency for building insurance showing the policy active from settlement with the lender named as an interested party. Funds must also be cleared in the nominated account.
What happens if the seller has no ATO clearance certificate?
The buyer must withhold 15% of the purchase price and pay it to the ATO rather than the seller. The seller then claims it back through their tax return. Missing or late clearance certificates are now a leading cause of settlement delay.
What are settlement adjustments and how much are they?
Council rates, water charges and strata levies are usually paid in advance by the seller, so the buyer reimburses the portion covering the period after settlement. Across all items adjustments commonly add $500 to $3,000 to the amount payable on the day.
What does it cost if settlement is late?
The party at fault is generally liable for penalty interest on the unpaid balance, calculated from the contractual settlement date and commonly running 10% to 12% a year. The contract sets the rate and the remedies, so the wording matters.
What if you find damage at the pre-settlement inspection?
Photograph and document it, then raise it with the conveyancer, who can advise on remedies and take it up with the seller's representative. Where a price reduction is proposed, the lender needs to reassess, because the change affects the LVR the approval was based on.
What costs are payable at settlement?
The balance of the purchase price, transfer duty where it applies, conveyancing fees, the electronic settlement platform fee, and the adjustments. Duty outcomes turn on personal circumstances, so a conversation with your accountant or financial adviser is worthwhile.
Take the next step
Settlement is the last step of a process that started with borrowing capacity. Our first home buyers journey covers the whole sequence, our choosing the right finance guide covers the loan structure the settlement locks in, and NSW stamp duty covers what is payable under the First Home Buyers Assistance Scheme, where duty at $800,000 under the 2026/27 rates would otherwise be $30,187. Model your position with our mortgage repayment calculator and home equity calculator.
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Related resources for first home buyers
First home buyers journey | Pre-approval | Bank valuations | Private treaty sales | Buying at auction | NSW stamp duty | Choosing the right finance
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This article is general information only and does not take your personal circumstances into account. Settlement periods, contract terms, penalty interest rates, adjustment amounts, lender documentation requirements and insurance conditions vary between contracts and lenders and change over time. Settlement processes described here are specific to New South Wales. Figures were verified in July 2026 against published guidance on electronic settlement and lender settlement requirements, and Revenue NSW transfer duty rates and First Home Buyers Assistance Scheme thresholds. Confirm your position with a licensed conveyancer, solicitor, broker or lender before relying on it. Ali Hasani is an Authorised Credit Representative (CRN 567392) of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).
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