Property Glossary
The deposit in a Queensland property purchase is typically 5 to 10 percent of the purchase price. Here is when it is paid, where it is held, what happens to it and what is at risk if things go wrong.
The deposit is the upfront payment made by the buyer when a property contract is signed in Queensland. It signals commitment, provides security for the seller and forms part of the total purchase price paid at settlement.
The deposit is held in a trust account by the selling agent or, in some cases, the seller's solicitor. Neither the buyer nor the seller can access the funds in the trust account until settlement, or until the contract is terminated in accordance with its terms. This protects both parties: the buyer's money is not accessible to the seller during the contract period, and the seller has security that the buyer has committed funds to the transaction.
The deposit is typically due within a specified number of days after the contract is signed, commonly 3 to 5 business days. The exact timeframe is set out in the contract. Failure to pay the deposit by the due date is a breach of contract and can entitle the seller to terminate. Your solicitor will notify you of the deposit due date when the contract is signed.
The standard deposit in Queensland is 10% of the purchase price, but this is negotiable. Deposits of 5% are commonly agreed, particularly for higher-value properties where the absolute amount of a 10% deposit is substantial. In some off market or competitive situations, vendors may request a higher initial deposit as a demonstration of commitment. The deposit amount and timing should be reviewed and confirmed before you sign the contract.
Some Queensland contracts are structured with an initial deposit paid at signing and a balance deposit paid at a later date, often when the contract goes unconditional. This structure can be useful for buyers who do not have the full deposit amount immediately available but can access it within the condition period. Your solicitor can advise on whether this structure is appropriate for your situation.
The circumstances in which a deposit is forfeited or returned depend on how and why the contract terminates.
If the buyer withdraws during the cooling off period, the deposit is returned to the buyer less the 0.25% penalty. The penalty is paid to the seller; the rest of the deposit is returned promptly.
If the buyer terminates under the finance clause, the full deposit is returned to the buyer with no penalty. The same applies to termination under the building and pest condition.
If the contract goes unconditional and the buyer fails to complete, the seller may be entitled to forfeit the deposit and sue the buyer for any additional loss suffered. This is the scenario buyers most need to understand: once unconditional, the deposit is genuinely at risk if you do not proceed to settlement.
If the seller breaches the contract, the buyer is generally entitled to the return of the deposit and may have further legal remedies. Your Queensland solicitor should advise on the specific position.
Note the deposit due date when the contract is signed and arrange payment within the required timeframe. Late payment is a breach of contract.
In a dispute, the selling agent cannot release the deposit from trust without either agreement from both parties or a court order. This protects the buyer but can also delay recovery in a disputed termination.
Finance formally approved, building and pest inspection satisfactory, and legal advice obtained. These three things should all be in place before you allow the contract to go unconditional.
The deposit is the most financially exposed part of a property purchase before settlement. If you have questions about how your deposit works in the context of your specific contract, your Queensland solicitor is the right person to ask. If you want broader guidance on the purchase process, we are happy to help.