Last updated: April 2026

Property Glossary: A-Z of Australian Real Estate Terms

Plain English definitions for 80+ Australian property and real estate terms — whether you're buying, selling, investing, or renting.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Adjustable Rate Mortgage: A home loan where the interest rate can change over the life of the loan, typically in line with market rates or an index set by the lender. In Australia, this is more commonly called a variable rate loan. Your repayments can go up or down when the rate changes — for example, when the RBA changes the cash rate.
Appraisal: An estimate of a property's market value, usually provided by a real estate agent or registered valuer. An agent's appraisal is typically free and informal — it's used to guide pricing for sale. A formal valuation (by a registered valuer) is used by lenders to assess how much they will lend.
Appreciation: The increase in a property's value over time. For example, if a house purchased for $700,000 is now worth $850,000, it has appreciated by $150,000 (or about 21.4%). Appreciation is influenced by market conditions, local demand, infrastructure, and economic factors.
Auction: A method of selling property where registered bidders compete publicly for the property. The property is sold to the highest bidder, provided they meet or exceed the vendor's reserve price. In Australia, buying at auction is unconditional — there is no cooling-off period and no subject-to-finance clause.
Auction Clearance Rate: The percentage of properties that sell at or immediately after auction in a given week or period. A clearance rate above 70% generally indicates a strong seller's market; below 60% suggests a buyer's market. This metric is closely watched in Sydney and Melbourne as a real-time indicator of market sentiment.

B

Balloon Payment: A large lump-sum payment due at the end of a loan term, after a series of smaller regular repayments. Uncommon in standard Australian home loans but sometimes seen in commercial or vendor finance arrangements. The borrower either refinances or sells the property to cover the balloon.
Body Corporate: The legal entity that manages and maintains the common areas and shared facilities of a strata or community title development (e.g. apartments, townhouses). All lot owners are members and pay levies. Also called an "owners corporation" in VIC and NSW. Body corporate fees can significantly affect investment returns.
Bond (Rental): A security deposit paid by a tenant at the start of a tenancy, held by the state government bond authority (e.g. NSW Fair Trading, RTBA in VIC). The bond is refunded at the end of the tenancy if the property is left in good condition. Maximum bond is typically 4 weeks rent (varies by state).
Break Fee (Lease): A fee payable by a tenant who ends a fixed-term lease before the agreed end date. The amount depends on how far through the lease you are and the state's legislation. In NSW, the fee is calculated based on a formula; in other states it may cover the landlord's reasonable reletting costs.
Bridging Finance: A short-term loan used to "bridge" the gap when buying a new property before selling an existing one. Bridging loans carry higher interest rates than standard home loans and are typically repaid once the existing property settles. They carry risk if the existing property takes longer to sell than anticipated.
Building Inspection: A professional assessment of a property's structural condition, usually conducted before exchange of contracts. Inspectors check for structural defects, dampness, roof condition, and other issues. A combined building and pest inspection costs around $400–$800 and is strongly recommended before any purchase.
Buyer's Agent: A licensed real estate professional who represents and advocates for a property buyer (not the seller). Buyer's agents research properties, conduct due diligence, and negotiate on the buyer's behalf. They charge either a flat fee or a percentage of the purchase price (typically 1–2.5%). Particularly valuable in competitive or unfamiliar markets.

C

Capital Gain: The profit made when a property is sold for more than it was purchased for. For example, buying at $500,000 and selling at $750,000 results in a $250,000 capital gain. Capital gains may be subject to Capital Gains Tax (CGT).
Capital Gains Tax (CGT): A tax on the profit made from selling a capital asset (including investment properties). In Australia, CGT is part of income tax — the gain is added to your taxable income in the year of sale. Properties held for more than 12 months receive a 50% CGT discount. Your primary residence (principal place of residence) is generally exempt from CGT.
Cash Rate (RBA): The interest rate set by the Reserve Bank of Australia (RBA) for overnight loans between banks. The cash rate is the primary tool the RBA uses to manage inflation and economic activity. When the RBA raises the cash rate, banks typically pass on increases to variable mortgage rates within weeks.
Caveat: A legal notice lodged on a property's title to warn others that a third party has or claims an interest in the property. For example, a caveat might be lodged by someone who paid a deposit on a property before settlement, or by a creditor. A title search will reveal any caveats on a property.
Certificate of Title: The official government document that records ownership of a parcel of land. In most Australian states, land titles are now held electronically (e-conveyancing). The certificate shows the registered owner, any mortgages, caveats, or easements on the land.
Chattels: Moveable personal property that is not permanently attached to a building. In property sales, it is important to clarify what chattels are included (e.g. dishwasher, light fittings, window furnishings). Items that are part of the structure (fixed) are typically included in the sale unless excluded in the contract.
Clearance Certificate: A document from the ATO confirming that a property vendor is a resident of Australia for tax purposes. Required at settlement for property sales above $750,000. Without it, the buyer must withhold 12.5% of the purchase price and remit it to the ATO.
Commission (Agent): The fee paid to a real estate agent for selling a property, typically expressed as a percentage of the sale price. Rates vary by state (commonly 1.5%–3.5%) and are negotiable. Commission is usually only payable upon successful settlement.
Comparison Rate: A standardised interest rate that incorporates most fees and charges associated with a loan (in addition to the base interest rate), expressed as an annual percentage. Required to be advertised by Australian lenders, it allows more accurate comparison between loan products. Always compare the comparison rate, not just the advertised rate.
Completion: The final stage of a property purchase, also known as settlement, when ownership transfers from vendor to buyer. Funds are exchanged, the title is transferred, and the buyer receives the keys. In Australia, settlement typically occurs 30–90 days after exchange of contracts.
Compulsory Acquisition: The power of government (federal, state, or local) to acquire privately owned land for public purposes (e.g. road widening, infrastructure projects), with or without the owner's consent. Owners must be paid compensation, but disputes about the amount can end up in court.
Contract of Sale: The legally binding document that sets out the terms and conditions of a property sale, including the purchase price, settlement date, deposit amount, and any special conditions (e.g. subject to finance, building inspection). Prepared by the vendor's solicitor or conveyancer.
Conveyancer / Conveyancing: Conveyancing is the legal process of transferring property ownership from vendor to buyer. A conveyancer (or solicitor) handles the contract review, searches, title transfer, and settlement process. In most states, buyers and sellers engage separate conveyancers.
Cooling Off Period: A period (typically 2–5 business days, depending on state) after signing a contract of sale during which the buyer can withdraw from the purchase, usually forfeiting a small penalty (often 0.25% of the price). There is no cooling-off period for properties sold at auction. Rules vary significantly by state.
Cross-Collateralisation: Where multiple properties are used as security for a single loan, or where a lender links different loans together. This can limit your flexibility to sell one property without affecting others. Experienced property investors often avoid cross-collateralisation to maintain independent control of each asset.

D

Debt-to-Income Ratio (DTI): The ratio of a borrower's total debt to their gross annual income. Australian regulators have asked lenders to limit high DTI lending (above 6x income). For example, if you earn $100,000 and have $600,000 in total debt, your DTI is 6. A high DTI can affect your ability to borrow.
Depreciation (Property): The decline in value of a building or its fixtures and fittings over time due to wear and tear. Investment property owners can claim depreciation as a tax deduction. A quantity surveyor prepares a depreciation schedule that details the deductible amounts each year. This can be a significant tax benefit for new or recently constructed properties.
Deposit Bond: A guarantee (not cash) provided by an insurer that substitutes for a cash deposit when exchanging contracts. Used when a buyer has their funds tied up elsewhere (e.g. in an existing property yet to sell). If the buyer defaults, the bond issuer pays the vendor and then recovers the money from the buyer.
Development Application (DA): A formal application to the local council for approval to carry out development work (e.g. building a house, extending a property, or changing land use). DAs are assessed against the local planning scheme. Some developments may qualify as "complying development" and bypass the DA process.
Discharge Fee: A fee charged by a lender when a mortgage is paid off (discharged) from the property's title. Typically $150–$400. Also called an "exit fee" at some lenders, though these were banned for new loans taken out after 2011 in Australia.
Draw Down: The process of accessing loan funds, either all at once or in stages. Used most commonly with construction loans, where funds are released progressively as building milestones are reached (e.g. slab poured, frame complete, lockup, fit-out).
Dual Occupancy: A property that contains two separate dwellings on the same lot — either attached (e.g. duplex) or detached (e.g. house plus granny flat). Dual occupancy can be an effective strategy for generating rental income. Approval requirements vary by state and council.

E

Easement: A legal right for a third party to use a portion of someone else's land for a specific purpose, such as a drainage easement, power line corridor, or right of way for a neighbour. Easements appear on the title and can affect what you can build on that part of the land.
Encumbrance: Any right, interest, or liability attached to a property that may limit the owner's use or reduce its value — such as a mortgage, caveat, easement, or restrictive covenant. A full title search before purchase will reveal all encumbrances.
Equity: The difference between what a property is worth and what is owed on it. For example, a property worth $800,000 with a $500,000 mortgage has $300,000 in equity. Equity can be used as security to borrow additional funds (e.g. to purchase an investment property or fund renovations).
Exchange of Contracts: The point at which both vendor and buyer sign (and exchange) identical copies of the contract of sale, making the agreement legally binding. The buyer typically pays the deposit at exchange. In NSW, exchange is the critical milestone — the cooling-off period (if any) starts from exchange.
Exclusive Agency Agreement: A contract appointing one real estate agent as the sole agent to sell a property for a specified period (typically 60–90 days). During this period, commission is payable to the appointed agent even if the property is sold through another party. Most residential auction campaigns use exclusive agreements.

F

FIRB (Foreign Investment Review Board): The Australian government body that reviews foreign investment proposals in Australia. Most foreign nationals require FIRB approval before purchasing residential property. Generally limited to new dwellings, off-the-plan purchases, or established dwellings for redevelopment. Application fees apply and can be significant.
Fixed Interest Rate: A home loan where the interest rate is locked for a set period (typically 1–5 years), regardless of changes to the RBA cash rate. Provides certainty over repayments but usually comes with restrictions on extra repayments and break costs if you exit the fixed period early.
Fixtures: Items that are permanently attached to a property and generally included in the sale, such as built-in wardrobes, light fittings, and kitchen cupboards. Distinct from chattels (moveable items). If in doubt whether something is included, clarify in the contract of sale.
Freehold: The most common form of property ownership in Australia — outright ownership of the land and any buildings on it, with no time limit. Contrast with leasehold (common in the ACT, where residential land is leased from the government for 99 years).
Funds to Complete: The total amount of money a buyer needs to have available at settlement to complete the purchase. This includes the balance of the purchase price (after deposit), stamp duty, legal fees, and any adjustments for rates and water. Your conveyancer will calculate this shortly before settlement.

G

Gazumping: When a vendor accepts a higher offer from a different buyer after verbally agreeing to sell to someone else, but before contracts have been exchanged. Gazumping is legal in most Australian states because verbal agreements are not binding — only a signed contract of sale creates a legal obligation. It is most common in NSW in competitive markets.
Gearing (Positive / Negative / Neutral): The relationship between an investment property's rental income and its expenses (including interest). Negative gearing: expenses exceed income, creating a tax-deductible loss. Positive gearing: income exceeds expenses, generating taxable profit. Neutral gearing: income equals expenses.
Gross Rental Yield: Annual rental income as a percentage of the property's purchase price, before deducting expenses. Calculated as: (weekly rent × 52 ÷ property price) × 100. For example, a $600,000 property renting at $500/week has a gross yield of 4.3%. Compare with net rental yield (after expenses).
GST on Property: Goods and Services Tax (10%) generally applies to the sale of new residential properties by developers but not to the resale of existing homes between private individuals. Commercial properties and new subdivisions may also attract GST. If buying a new property, confirm whether the advertised price is GST-inclusive.

H

HEM (Household Expenditure Measure): A benchmark used by Australian lenders to assess a borrower's living expenses when calculating loan serviceability. If a borrower's declared expenses are lower than HEM, the lender typically uses HEM. HEM was introduced to address concerns about lenders accepting unrealistically low expense estimates.
Hold-Over Tenancy: When a tenant remains in a property after their fixed-term lease has expired, without signing a new agreement. The tenancy continues on the same terms as the original lease but becomes a periodic (month-to-month) tenancy. Rules on notice periods in this situation vary by state.

I

ICSEA: Index of Community Socio-Educational Advantage — a score used by ACARA to indicate the socio-educational background of a school's student population. The average ICSEA score is 1,000. Scores above 1,000 indicate a higher-than-average advantaged student population; below 1,000 indicates disadvantage. Used by parents comparing schools and by researchers analysing educational outcomes.
Interest-Only Loan: A home loan where you only pay the interest component for a set period (typically 1–5 years), without reducing the principal. Popular with investors as it keeps repayments lower and preserves cash flow. After the interest-only period, repayments switch to principal and interest, which means higher repayments.
Interest Rate Buffer: APRA requires lenders to assess whether borrowers can afford their loan repayments if interest rates were to rise by at least 3 percentage points above the actual loan rate. This "serviceability buffer" is designed to protect borrowers from rate increases and is a key reason why your assessed borrowing capacity may be lower than you expect.

J

Joint Tenants (vs Tenants in Common): Two ways to co-own property. Joint tenants each own 100% of the property together — if one owner dies, their share automatically passes to the surviving owner(s) (right of survivorship). Commonly used by married couples. Tenants in commoneach own a defined share (e.g. 50/50 or 70/30), which can be passed through a will. Commonly used by business partners or unmarried couples.

L

Land Tax: An annual state government tax on the total unimproved value of land you own above a threshold. Your principal place of residence is generally exempt. Investment properties are subject to land tax, and the rates vary significantly by state. Land tax can materially affect the economics of property investment — factor it into your analysis.
Land Transfer Duty: See Stamp Duty (Transfer Duty).
Lenders Mortgage Insurance (LMI): Insurance that protects the lender (not the borrower) if the borrower defaults and the property is sold for less than the outstanding loan. Required when the loan-to-value ratio (LVR) exceeds 80%. LMI can cost tens of thousands of dollars — it is usually added to the loan. Some lenders waive LMI for professionals (e.g. doctors, lawyers) or for government-backed schemes.
Lien: A legal claim against a property as security for a debt. A mortgage is the most common form of lien. Other liens can include unpaid council rates, outstanding body corporate levies, or builder's liens. Liens are registered on the property's title.
Line of Credit: A flexible loan facility that allows you to borrow up to a set limit using your property as security, drawing and repaying funds as needed (similar to a large credit card). Often used by investors to fund renovations or purchase deposits. Interest is charged only on the drawn balance.
Loan to Value Ratio (LVR): The ratio of a loan amount to the value of the property being purchased, expressed as a percentage. If you borrow $640,000 to buy an $800,000 property, your LVR is 80%. Lenders use LVR to assess risk — loans above 80% LVR typically require LMI. Lower LVR means lower risk for the lender and often access to better rates.

M

Median Price: The middle price in a ranked list of all sale prices in a given suburb and period. Half of sales occurred above the median, half below. The median is preferred over the average (mean) because it is less distorted by extreme high or low sales. A suburb with a $700,000 median means half of homes sold for more and half for less.
Mortgage: A loan secured against real estate. The property serves as security — if the borrower defaults, the lender can sell the property to recover the debt. In Australia, most home loans are structured as principal and interest mortgages repaid over 25–30 years. The mortgage is registered on the property's title.
Mortgage Broker: A licensed professional who helps borrowers find and apply for home loans from a panel of lenders. Mortgage brokers are paid by the lender (via upfront and trail commissions), not typically by the borrower. They are required by law to act in the borrower's best interest (best interests duty). Useful for comparing a wide range of loan products.
Mortgagee in Possession: When a lender takes control of a property after a borrower defaults on their loan. The lender may then sell the property (mortgagee sale) to recover the outstanding debt. Mortgagee sales are often priced below market value for a quick sale, but buyers take on more risk as the property is typically sold without warranties.

N

Negative Gearing: When an investment property's expenses (interest, rates, management, depreciation) exceed its rental income, creating a net loss. This loss can be used to offset other taxable income, reducing the investor's tax bill. Negative gearing is a common strategy in Australia, though the benefit depends on the investor's marginal tax rate.
Net Rental Yield: Annual rental income as a percentage of property value, after deducting all expenses (management fees, rates, insurance, maintenance, body corporate, etc.). A more realistic measure of investment return than gross yield. Net yields are typically 1–1.5% lower than gross yields.
Non-Conforming Loan: A home loan provided to borrowers who do not meet standard lending criteria — for example, those with bad credit, irregular income, or high LVR. Non-conforming loans typically carry higher interest rates than standard loans to compensate for the higher risk. Also called "low doc" or "specialist" loans in some contexts.

O

Offset Account: A transaction account linked to a home loan where the balance reduces the interest charged on the loan. If you have a $500,000 loan and $50,000 in your offset account, you only pay interest on $450,000. Offset accounts are a highly effective way to reduce interest costs while keeping funds accessible.
Open Listing: An agency agreement where the vendor can appoint multiple agents to sell the property simultaneously. Commission is only paid to the agent who ultimately sells the property. Less common for residential property, where exclusive agreements are the norm.
Option Fee: A payment made to secure the exclusive right to purchase a property at a specified price within a set time period. If the buyer exercises the option (proceeds with the purchase), the fee typically counts toward the purchase price. If not exercised, the fee is forfeited. Common in commercial property and development deals.

P

Pre-Approval (Conditional Approval): An assessment by a lender indicating how much they would be willing to lend you, subject to satisfactory valuation and verification of your information. Pre-approval is not a guarantee of finance — it is conditional. It is valid for a set period (typically 3–6 months) and gives you confidence when making offers or bidding at auction.
Principal and Interest: The standard home loan repayment structure where each payment covers both interest charges and a portion of the principal (the amount borrowed). Over time, as the principal reduces, a greater portion of each repayment goes toward the principal. Most owner-occupier loans are principal and interest.
Private Sale: A method of selling property through a negotiated price process, rather than auction. The vendor sets an asking price; buyers make offers and negotiate. Private sales often include a cooling-off period and may include conditions such as subject to finance or building inspection. More common in some states (e.g. QLD, WA) than auction-dominated markets (Sydney, Melbourne).
Proportional Ownership: Where two or more people own a property in specified shares (e.g. 60/40 or 70/30) rather than equally. This structure, used under a tenants in common arrangement, allows owners with different financial contributions to hold ownership shares that reflect their investment.
Put and Call Option: A contract giving one party the right to require the other to buy or sell a property at an agreed price within a set timeframe. A "put" option gives the seller the right to require the buyer to purchase; a "call" option gives the buyer the right to require the seller to sell. Commonly used in development transactions to control a property without full commitment.

Q

Quantity Surveyor (QS): A professional who estimates and manages the costs of construction and building works. For investment properties, a quantity surveyor prepares a tax depreciation schedule — a report itemising the depreciation claimable on the building and its fixtures. This schedule is submitted with your tax return each year to claim the deductions. A good QS can save investors thousands in tax annually.

R

Redraw Facility: A home loan feature that allows you to access extra repayments you have made above the minimum. If you have paid $30,000 extra into your loan, you can redraw that amount (subject to lender conditions). Unlike an offset account, funds in redraw have already reduced your loan balance and may have different tax implications.
Refinancing: The process of replacing an existing mortgage with a new one — either with the same lender or a different one. People refinance to access a lower interest rate, release equity, consolidate debt, or change loan features. Refinancing may involve discharge fees and establishment fees for the new loan.
Rentvesting: A strategy where someone rents the home they live in (often in a preferred location) while purchasing an investment property in a more affordable area. Rentvesting allows investors to enter the property market without giving up lifestyle preferences, while benefiting from investment property tax deductions and potential capital growth.
Restrictive Covenant: A condition registered on a property's title that restricts how the land can be used or what can be built on it. For example, a covenant may prohibit building more than one dwelling, or require materials of a specific type. Covenants are enforceable regardless of who owns the property and survive on the title indefinitely.
Right of Way: An easement granting the right to pass over another person's land. For example, a shared driveway that provides access to a neighbouring property. Rights of way appear on the title and must be disclosed in a sale — they cannot be removed without the benefit holder's agreement.

S

Section 32 (VIC): Also known as the "Vendor's Statement," this is a document prepared by the vendor's legal representative in Victoria that must be provided to prospective buyers before signing a contract. It discloses key information about the property including title details, outgoings, zoning, and any known defects or restrictions. Reviewing the Section 32 carefully (with a conveyancer) is essential before signing anything.
Serviceability: A lender's assessment of whether a borrower can afford to repay a loan. Lenders assess income, expenses, existing debts, and apply a serviceability buffer (currently 3% above the loan rate). Your borrowing capacity is largely determined by serviceability — even if you have a large deposit, a lender won't lend you more than you can service.
Settlement: The final step of a property transaction where ownership officially transfers from vendor to buyer. At settlement, the balance of the purchase price is paid, the title is transferred, and the buyer receives the keys. Settlement typically occurs 30–90 days after exchange of contracts. In Australia, most settlements now occur electronically via the PEXA platform.
Stamp Duty (Transfer Duty): A state government tax payable by property buyers on the purchase price. Rates vary significantly by state and property value — it can represent a major upfront cost (e.g. $30,000–$50,000+ on a $1M property in NSW). First home buyers may be eligible for exemptions or concessions. Use our stamp duty calculator to estimate your liability.
Strata Title: A form of property ownership used for apartments, townhouses, and units within a larger complex. Each owner holds title to their individual lot (their apartment) plus an undivided share in the common property (foyer, lifts, garden). The building is managed by a body corporate (or owners corporation) funded by owner levies.
Subject to Finance Clause: A condition in a contract of sale that allows the buyer to withdraw from the purchase without penalty if they are unable to obtain finance approval within a specified timeframe (typically 14–21 days). This clause does not apply to auction purchases. It protects the buyer but gives the vendor less certainty.

T

Tenants in Common: See Joint Tenants (vs Tenants in Common).
Title Search: A search of the official land titles register to confirm ownership, identify any encumbrances (mortgages, caveats, easements), and check for any other registered interests. Conducted by conveyancers as part of the conveyancing process. A title search is a fundamental step in any property purchase.
Transfer Duty: See Stamp Duty (Transfer Duty).

U

Unconditional Contract: A contract of sale with no outstanding conditions — both parties are legally bound to complete the transaction. Auction purchases are unconditional from the moment the hammer falls. Private sale contracts become unconditional once all conditions (such as finance and building inspection) are satisfied or waived.
Unencumbered: A property (or the equity in a property) that is free from any mortgages, caveats, or other registered interests. An unencumbered property can be used as security for a new loan without any complications from existing charges.

V

Valuation: A formal assessment of a property's market value by a licensed property valuer. Banks commission valuations before approving a mortgage to ensure the property provides adequate security. Bank valuations are often conservative and may come in below the contract price — which can affect borrowing capacity.
Variable Rate: A home loan interest rate that can move up or down in response to changes in the market or lender policy (typically linked to the RBA cash rate). Variable rate loans offer more flexibility than fixed rate loans (e.g. unlimited extra repayments, offset accounts) but less payment certainty.
Vendor: The seller of a property. In Australian real estate, the person selling is referred to as the "vendor" and the person buying is the "purchaser" or "buyer."
Vendor Finance: An arrangement where the seller (vendor) provides finance to the buyer, rather than the buyer obtaining a bank loan. The buyer pays the purchase price in instalments directly to the vendor. Vendor finance is uncommon in mainstream residential property but may be used in regional areas or where buyers have difficulty obtaining bank finance.
Vendor's Statement: A document prepared by the seller's legal representative that discloses key information about the property to potential buyers. Known as a Section 32 in VIC and a Vendor Disclosure Statement in other states. Includes title details, zoning, outgoings, and known encumbrances.

W

Writ: A legal order issued by a court. In property, a writ may be registered on a property's title if a court has ordered the owner to pay a debt. A writ can prevent the sale or refinancing of a property until the underlying debt is resolved. A title search will reveal any writs registered against the property.

Z

Zoning: The classification of land by local government that determines what can be built or done on it. Common residential zones include low density (single houses), medium density (townhouses, small apartments), and high density (apartment buildings). Zoning directly affects what you can build on a block and its development potential — always check the zoning before purchasing land for development.

Learn more: Explore our guides covering buying, renting, investing, and selling property in Australia.