Property Law in Victoria: A Complete Guide for Owners, Buyers and Sellers

The Torrens System and Indefeasibility

Land in Victoria is held under the Torrens system, administered under the Transfer of Land Act 1958 (Vic). Legal title is established by registration in the Register maintained by Land Services Victoria (formerly Land Use Victoria), the operational service of the Registrar of Titles. Each parcel has a folio recording the registered proprietor and registered interests (mortgages, easements, covenants, caveats). The folio — not any paper certificate or historical deed — is the source of truth for legal ownership.

Registration confers 'indefeasibility' — a registered proprietor takes title free of unregistered interests — but the doctrine is qualified. Section 42 of the Transfer of Land Act preserves specified exceptions, including fraud by or with the knowledge of the registered proprietor, prior folio errors and defined overriding interests (short tenancies, adverse possession claims and certain public rights). Other statutes carve out further exceptions. The case law also recognises an in personam exception: indefeasibility does not defeat a personal equity arising from the registered proprietor's own conduct (for example, an obligation to hold on trust, or to transfer under an unperformed contract). A title search is essential but not conclusive — physical inspection, planning enquiries and occupation checks remain part of proper due diligence.

Certificates of Title (CTs). From 3 August 2024, all newly issued Victorian CTs are electronic (eCTs) held in Land Services Victoria's system; no new paper CTs are issued. Existing paper CTs remain valid until next required for a dealing, at which point they are dealt with under the current Registrar's Requirements (generally converted to an eCT held by a Subscriber with 'control' for the purposes of that dealing). Holding an old paper CT is not, by itself, conclusive of ownership; the Register is.

Principal Victorian Property Statutes

• Transfer of Land Act 1958 (Vic) — Register, indefeasibility, caveats, priority notices, easements, mortgages, adverse possession applications.
• Property Law Act 1958 (Vic) — co-ownership, sale/division of co-owned land (Part IV), leases, mortgages, restrictive covenants, equitable/formality rules.
• Sale of Land Act 1962 (Vic) — vendor statements (ss 32–32P), s 31 cooling-off, terms contracts, off-the-plan deposit and sunset provisions (ss 9AA, 9AC, 10A).
• Subdivision Act 1988 (Vic) — subdivision plans, common property, owners corporations, boundary/plan mechanics.
• Owners Corporations Act 2006 (Vic) — constitution, powers, tiered obligations, rules, records, insurance, disputes.
• Residential Tenancies Act 1997 (Vic) and Retail Leases Act 2003 (Vic) — residential and retail leasing regimes.
• Planning and Environment Act 1987 (Vic) — planning schemes, permits, VCAT reviews.
• Building Act 1993 (Vic) — building permits, occupancy, owner-builder disclosure, domestic building insurance/Building Practitioner Cover.
• Duties Act 2000 (Vic), Land Tax Act 2005 (Vic), Windfall Gains Tax Act 2021 (Vic) and Commercial and Industrial Property Tax Reform Act 2024 (Vic) — State property taxes.
• Limitation of Actions Act 1958 (Vic) — including the 15-year adverse possession limitation period (s 8).
• Fences Act 1968 (Vic) — dividing fences.

Contracts of Sale and Section 32 Vendor Statements

A vendor must give a signed vendor statement complying with sections 32 to 32P of the Sale of Land Act 1962 (Vic) to the purchaser before the purchaser signs the contract. The prescribed content includes:

• Title — register search, plan and instruments referred to.
• Registered encumbrances — mortgages, caveats, easements, covenants.
• Planning information (zone, overlays and scheme name).
• Outgoings — rates, land tax on a single-holding basis, water and owners corporation charges.
• Building permits in the last seven years and owner-builder disclosures.
• Whether the land is in a designated bushfire-prone area.
• GAIC status (growth areas infrastructure contribution).
• Notices, orders, declarations and recommendations affecting the land.
• Owners corporation certificate and disclosures (for lots in an OC).
• Services statement — sewerage, water, gas, electricity, telephone.

Section 32K gives the purchaser a right to rescind at any time before accepting title if the vendor has supplied false information, failed to supply required information, or the statement is otherwise defective. Section 32K(2) qualifies that right: rescission is not available if the vendor acted honestly and reasonably and in the circumstances the purchaser is substantially in as good a position as if s 32 had been complied with. Not every omission automatically permits rescission. The vendor statement is a disclosure document; it does not warrant condition or fitness — building and pest inspections and, where appropriate, planning and structural advice are separate exercises.

The contract of sale is the binding agreement — commonly on the Law Institute of Victoria / REIV standard form for residential sales, or bespoke for commercial transactions — setting price, deposit, settlement date, inclusions, GST treatment, conditions and default regime. Electronic signing under the Electronic Transactions (Victoria) Act 2000 is now the norm. See our companion guides on Section 32 vendor statements and buying property in Victoria.

Cooling-Off Rights (s 31)

Section 31 of the Sale of Land Act 1962 (Vic) gives a purchaser three clear business days after signing to end the contract by written notice, forfeiting the greater of $100 or 0.2% of the purchase price. The right does not apply where:

• The property is bought at a publicly advertised auction, or under a contract signed within three clear business days before or after such an auction.
• The purchaser is an estate agent or a body corporate.
• The purchaser previously signed a similar contract for the same land.
• Before signing, the purchaser has obtained written legal advice from an Australian legal practitioner (not the vendor's practitioner) and the statutory waiver conditions are satisfied.
• The land is used primarily for industrial or commercial purposes or is more than 20 hectares of farming land.

Cooling-off is a purchaser-only right; there is no general cooling-off in commercial transactions. See our companion guide on cooling-off rights when buying property in Victoria.

Settlement, Electronic Lodgment and Registration

Electronic settlement of most Victorian property dealings is mandated. PEXA is an Electronic Lodgment Network Operator (ELNO) approved under the Electronic Conveyancing (Adoption of National Law) Act 2013 (Vic) — a platform used by accredited Subscribers, not the registry, duty assessor or bank. Consumers do not log into or control a workspace; their legal or conveyancing practitioner does so on their authority under a Client Authorisation. Verification of Identity (VOI) and right-to-deal checks are separate and are the Subscriber's obligation; VOI is a reasonable-steps safe-harbour, not proof of ownership.

At the agreed settlement time, funds move via Reserve Bank Exchange Settlement Accounts and the transfer (and any incoming mortgage) is lodged with Land Services Victoria. Registration follows lodgment and is not instantaneous; a lodged dealing may be requisitioned or, in narrow cases, rejected. Land transfer duty is assessed by the State Revenue Office through Duties Online and paid at settlement; PEXA integrates payment but does not decide duty liability. See PEXA and electronic conveyancing in Victoria.

Land Transfer Duty and Other State Property Taxes

Land transfer duty (still commonly called 'stamp duty') is imposed on the purchaser under the Duties Act 2000 (Vic) and administered by the State Revenue Office (SRO). Duty rates, thresholds and concessions change with each Victorian Budget — verify current figures on sro.vic.gov.au before relying on them. The following are separate taxes/regimes that do not apply to every property; check applicability early:

• Land tax — annual, on the total taxable value of Victorian land held by an owner, with a principal-place-of-residence exemption.
• Foreign purchaser additional duty — applies to acquisitions of residential property by foreign persons under the Duties Act.
• Absentee owner surcharge — added to land tax for absentee owners under the Land Tax Act.
• Vacant residential land tax — extended state-wide from 1 January 2025 with narrow exemptions; annual assessment on residential land vacant for more than six months in the preceding calendar year.
• Windfall gains tax — Windfall Gains Tax Act 2021 (Vic), on rezoning uplift above statutory thresholds.
• Commercial and Industrial Property Tax (CIPT) — for commercial and industrial land transacted after 1 July 2024, land entering the CIPT regime pays a final transaction of duty, then annual CIPT after a 10-year transition, under the Commercial and Industrial Property Tax Reform Act 2024 (Vic).
• Concessions — principal residence, first-home buyer, pensioner, off-the-plan, family-farm, corporate reconstruction, family-law rollover (s 44 Duties Act) and deceased estate transfers — each with strict eligibility and documentation requirements.

Federal tax overlays — GST on new residential premises and on going-concern commercial sales, GST withholding on certain new residential sales, and CGT (including main-residence and small-business concessions) — are transaction-specific. Do not assume a blanket outcome; take tax advice before signing on any substantial transaction. See stamp duty and land transfer duty and the absentee owner surcharge.

Co-ownership and the Property Law Act

Two or more people can hold land as joint tenants (survivorship — on the death of one, the other(s) take the whole) or as tenants in common (each owns a defined share which passes under the will or intestacy). A joint tenancy can be severed by written notice and lodgment. On death, a surviving joint tenant obtains registration by lodging evidence of death; a tenants-in-common interest requires a transmission application to the executor or administrator.

Where co-owners cannot agree, Part IV of the Property Law Act 1958 (Vic) (ss 224–234E) empowers VCAT to order sale or physical division of co-owned land on application. The outcome is discretionary — the Tribunal considers whether sale is more appropriate than division, the wishes of the parties, hardship and any compensation adjustments — and there is no automatic right to a sale order. Complex or high-value matters may need to be transferred to the Supreme Court. Deceased-estate transmission and disputes between beneficiaries have separate pathways under estate law.

Caveats, Priority Notices and Equitable Interests

An unregistered equitable interest — a purchaser under contract, an unregistered mortgagee, a constructive-trust beneficiary, a party to a binding financial agreement pending transfer — can be protected by lodging a caveat under ss 89–91A of the Transfer of Land Act. A caveat notifies a claimed interest and, while effective, generally prevents registration of further dealings inconsistent with that claim, subject to statutory exceptions and to removal or lapsing. A caveat does not create the interest it claims, does not validate a weak or unsupported claim, and does not indefinitely preserve it. Improperly lodged caveats can attract compensation under s 118.

Caveats are removed by consent (caveator lodges a withdrawal), by a s 89A lapsing notice (registered proprietor serves notice; caveator has 30 days to commence Supreme Court proceedings), or by Supreme Court order under s 90(3). A priority notice under Part IVAA is a short-lived protective mechanism used before lodgment of a genuine registrable dealing. Under Land Services Victoria practice, a priority notice takes effect for 60 calendar days from lodgment, may be extended once by a further 30 days to a maximum of 90 days, and may cease earlier by registration of the intended dealing, withdrawal or court order. It is a technical protection, not a substitute for due diligence, and it does not guarantee priority beyond its statutory operation. See our companion guide on caveat removal in Victoria.

Easements, Covenants, Mortgages, Leases and Licences

Easements confer a right held by one parcel (the dominant tenement) over another (the servient tenement) — rights of carriageway, drainage, sewerage, utility easements. Easements bind successive owners and are usually recorded on title. Disputes turn on scope, interference and (rarely) abandonment; remedies include declaration, injunction and damages.

Restrictive covenants are private restrictions on use registered on title for the benefit of neighbouring lots (residential-only use, single dwelling, materials, setbacks). They are enforced by the benefiting owners, not by the Council. A planning permit cannot authorise a breach of a covenant, and VCAT will not grant a permit that would breach one (s 61 Planning and Environment Act 1987 (Vic)). Removal or variation is by s 84 Property Law Act 1958 (Vic) application, planning-scheme amendment, or agreement of all beneficiaries. See restrictive covenants.

Mortgages secure a debt over land. On default, the mortgagee's remedies depend on the mortgage terms, the Transfer of Land Act and, for consumer credit, the National Credit Code. A mortgagee cannot generally sell immediately on any missed payment: statutory default notices are usually required (for regulated credit contracts, a s 88 NCC notice), a reasonable time to remedy must elapse, and a mortgagee-in-possession sale must be conducted in good faith with reasonable care to obtain market value. Priority between competing mortgages is determined by registration, subject to tacking and postponement rules.

Leases create a right of exclusive possession for a term; licences confer only a personal permission to occupy and can generally be revoked according to their terms. The distinction is substantive, not just terminological — labelling an arrangement a 'licence' will not defeat a lease if exclusive possession has been granted.

Adverse Possession

Under section 8 of the Limitation of Actions Act 1958 (Vic), the limitation period for actions to recover land is 15 years. A person in actual, open, exclusive and continuous adverse possession for that period may apply under s 60 of the Transfer of Land Act to be registered as proprietor. The Limitation of Actions Act sets out specific statutory exclusions:

• Crown land — s 7 of the Limitation of Actions Act 1958 (Vic).
• Victorian Rail Track land — s 7A.
• Water-authority land within the meaning of the Water Act 1989 (Vic) — s 7AB.
• Council land of which a municipal council is the registered proprietor — s 7B.
• Section 7C prevents a lot owner acquiring an owners corporation's common property by adverse possession; whether other classes of claimant are affected depends on the particular land and the governing legislation.

Possession alone does not transfer title — the successful applicant must be registered by Land Services Victoria after a formal application supported by survey, statutory declarations and historical evidence. Applications are frequently opposed. See our companion guide on adverse possession in Victoria.

Owners Corporations

An owners corporation (OC) is created on registration of a plan of subdivision with two or more lots and common property. Under the Owners Corporations Act 2006 (Vic) (amended by the Owners Corporations and Other Acts Amendment Act 2021), OCs are classified into tiers (unlimited, tier 1–5, or two-lot arrangements) with calibrated obligations for meetings, financial management, maintenance planning and insurance. Repair responsibility follows the plan of subdivision (lot versus common property) and s 46 (entry for repairs); benefit-principle apportionment for consequential works follows ss 23–24. The internal grievance procedure (Schedule 3) distinguishes complaints about breaches by the OC (s 153) from applications about individual conduct (s 163). Building defect claims interact with the current Building Practitioner Cover and Home Warranty settings (the latter limited to buildings three storeys or less). Disputes are heard in VCAT's Owners Corporations List under ss 165–166. See owners corporation disputes in Victoria.

Residential, Retail and Commercial Leasing

Residential tenancies are governed by the Residential Tenancies Act 1997 (Vic), substantially amended from 29 March 2021 and further strengthened by successive reforms (including the 30 October 2025 disclosure and repair changes). The Act covers minimum standards, bond lodgment with the RTBA, entry, rent-increase timing and notice, notices to vacate on prescribed grounds, and VCAT jurisdiction.

Retail leases are separately regulated by the Retail Leases Act 2003 (Vic) where the premises meet the retail definition (broadly, wholly or predominantly for the sale or hire of goods by retail or the retail provision of services, subject to statutory carve-outs and Ministerial determinations). The Act provides for a landlord's disclosure statement, a five-year minimum term unless the Victorian Small Business Commission (VSBC) certifies a shorter term, restricted rent-review mechanisms (no compounded combinations and no ratchet clauses), landlord-borne land tax, and disclosure and audit of recoverable outgoings. Retail tenancy disputes generally require referral to the VSBC and a VSBC certificate before proceedings can be commenced at VCAT, subject to statutory exceptions and to urgent interlocutory relief — the VSBC pathway is not universally mandatory in every dispute.

Non-retail commercial leases are governed by the lease itself, the general common law of landlord and tenant, and residual provisions of the Property Law Act 1958 (Vic); the Australian Consumer Law applies to pre-contractual conduct and (in some cases) unfair contract terms. They are not merely 'contractual' where the Property Law Act, ACL or other mandatory statute applies. Retail-lease protections do not apply to every business lease — the question turns on the retail definition and cannot be contracted around merely by labelling the lease 'commercial'. See when the Retail Leases Act applies and tenant rights in Victoria.

Off-the-plan Purchases

Off-the-plan contracts are contracts to buy a lot that does not yet exist as a separate title. Under the Sale of Land Act, deposits are capped at 10% and must be held on trust under s 9AA; material plan amendments require notice under s 9AC with rescission rights if amendments materially affect the lot; and sunset terminations are heavily regulated under s 10A, requiring purchaser consent or Supreme Court leave. Current Building Practitioner Cover and Home Warranty settings apply to the construction warranty framework; duty concessions for off-the-plan purchases are periodically extended by the Victorian Government — verify the current end date and eligibility on the SRO website. See our companion guide on off-the-plan property purchases in Victoria.

Planning, Building and Environmental Due Diligence

A council planning certificate or s 32 statement is not a substitute for inspections and specialist reports. Due diligence for a substantial residential purchase typically includes a title search and review of registered instruments, a planning property report (zone, overlays, heritage, vegetation, GAIC), building permit history, a building and pest inspection, flood and bushfire mapping, and (for OC lots) OC records and insurance review. Commercial due diligence adds environmental site assessment, lease and tenancy review, structural and services reports, valuation, GST and duty modelling, and (for development sites) planning and feasibility advice. Owner-builder disclosures under s 137B of the Building Act 1993 (Vic) require a defects report and insurance where a domestic building has been owner-built and is sold within 6.5 years.

Foreign Investment (FIRB) and Purchaser Eligibility

Acquisitions of Australian residential and (in many cases) commercial real estate by foreign persons are regulated by the Foreign Acquisitions and Takeovers Act 1975 (Cth), administered by the Foreign Investment Review Board (FIRB). Application fees, monetary thresholds and case-specific conditions change with each Federal Budget — do not rely on a stale figure. Recent policy has tightened restrictions on foreign purchases of established dwellings. FIRB approval, where required, must generally be obtained before settlement; failing to obtain approval can result in civil penalties, criminal liability and forced divestment orders.

Property Disputes and Litigation

Property litigation covers caveat disputes, specific performance of contracts of sale, Australian Consumer Law claims for misleading conduct in marketing, easement and covenant enforcement, boundary and adverse possession disputes, OC disputes, residential and retail tenancy disputes, and building disputes. Forum depends on the claim: Supreme Court (Torrens jurisdiction and high-value/complex), County Court (mid-tier), VCAT (residential tenancies, retail leases, owners corporations, planning), Magistrates' Court (fencing, small monetary claims). Litigation is fact-intensive and expert-dependent (surveyors, valuers, planners, building consultants); costs escalate quickly. Early advice, narrow framing and disciplined preparation are essential.

Practical Checklists

Before signing (buyer). Read the s 32 in full. Read the contract in full. Obtain a title search and identify each registered interest. Check zone, overlays and heritage. Obtain building and pest (established) or plan/specification review (off-the-plan). For OC lots, review records and insurance. Confirm finance pre-approval and, if applicable, FIRB position. Model duty, land tax and (if applicable) CGT/GST. Never bid at auction, sign a contract or waive cooling-off without pre-signing advice.

Before signing (vendor). Instruct a practitioner to prepare a complete and accurate s 32 and contract. Confirm outgoings, rates, land tax and OC information are current. Address known defects and notices in disclosure. Confirm capital gains and duty treatment for your intended structure. Decide auction versus private sale on informed advice.

Before signing (tenant or landlord). Confirm whether the lease is retail, residential or non-retail commercial — the answer changes almost everything. For retail, ensure the disclosure statement is provided in time. For residential, comply with the current minimum standards and notice requirements. For all leases, negotiate rent review, options, outgoings, end-of-term and default carefully — the standard form is rarely optimal without amendment.

How Parke Lawyers Helps

Parke Lawyers acts on the full range of Victorian property matters — residential and commercial conveyancing, off-the-plan purchases, family and estate-related transfers, retail and commercial leasing, owners corporation advice, caveat and covenant work, easement and boundary disputes, planning questions and property litigation. The firm's property practice is led by Julian McIntyre, working with the Commercial & Business Law and Litigation & Dispute Resolution teams. We do not promise outcomes, we do not claim special relationships with the registry, councils or agents, and we do not provide 24/7 or out-of-hours urgent telephone advice. To arrange a consultation, call 134 134 or submit an online enquiry.

Frequently Asked Questions