Putting A Deposit Down on Property Purchase: How it Works.
In Perth’s competitive property market, showing a seller you’re serious is more critical than ever. This is where the holding deposit comes in. A holding deposit is an initial prepayment that forms part of the total funds you contribute to the purchase.
However, at Ascent Property Co, we see this as more than just a payment. It is the essential first step to securing your contract and moving toward settlement.
While these deposits are standard practice to lock in a contract, understanding the fine print of when your money is safe—and when it isn't—is essential for every buyer.
When is the deposit refundable?
A holding deposit is not automatically lost if a contract falls through, provided there are contractual grounds for the exit. Common valid reasons that trigger a refund include:
- Subject to finance: If your offer is contingent on securing a loan and your circumstances change—such as losing your job—the contract becomes void and your deposit is refunded.
- Unexecuted agreements: You should never transfer funds until you have read and signed a contract that has been fully executed by both parties.
- Conditional clauses: If the sale is subject to other specific conditions (like a building inspection or a successful "subject to sale" clause) and those conditions aren't met, the deposit typically remains protected.
When is the deposit non-refundable?
The primary risk to your capital occurs when a buyer attempts to exit a contract without valid legal grounds.
- Change of mind: Simply deciding not to proceed after the contract is fully executed can result in forgoing the holding deposit.
- Missing deadlines: Most holding deposits are due within three to five business days of the offer being accepted. Failure to meet these financial obligations can jeopardize the contract and your claim to the property.
Strategic deposit benchmarks.
While the amount is often negotiable, we typically suggest round figures based on the property's price point.
| Property Value | Common Holding Deposit |
|---|---|
| Vacant Land | Usually no more than $5,000 |
| Up to $600,000 | Approximately $10,000 |
| $1 Million+ | $20,000 – $25,000 |
Ascent Pro-Tip: Remember, the holding deposit isn't an extra fee. If you prepay $10,000 on a $100,000 price point, you simply pay the remaining $90,000 at settlement.
Ready to secure your next property?
We’re here to help you navigate every step of the purchase process—from the first inspection to the final settlement. Understanding how to use a holding deposit to your advantage is key to winning in today’s competitive market.
Before you make your next move…
- Have your funds ready: Knowing the typical round-figure deposit for your price point ensures you can act fast when you find the right home.
- Review your contract: Never transfer funds until you have a fully executed agreement in hand.
- Talk to our team: When you buy through Ascent, we can help you negotiate deposit terms and ensure your interests are protected by the right contractual grounds.
Contact us to discuss your property goals and ensure your next offer is as strong as it can be.
Need help with your accounting?
One of the most powerful decisions you can make with your superannuation is whether to run your own self-managed super fund (SMSF) and whether to invest in property through it. Most people know it's possible to use super to buy property. Far fewer know how to do it well. The following seven tips are designed to help you make the right decisions. 1. You Can Borrow Money to Purchase Property in Superannuation. Don't have enough in your SMSF to buy an investment property outright? Since 2008, superannuation held in a self-managed super fund can be used to borrow money for property purchase. This is done through a 'limited recourse loan' using a Bare Trust as the Custodian entity. You can't borrow the total value of the property—typically it's up to 80% for residential properties and 60% for commercial properties, with the required deposit held in the SMSF as security. The SMSF then makes the loan repayments, with rental income received by the fund and property expenses paid by the fund. Importantly, if there is a default on the loan, your other assets in the SMSF are generally protected from standard debt recovery and bankruptcy proceedings. The lender only has recourse to the property itself. Upon completion of the loan repayment, ownership of the property transfers legally to the SMSF. 2. Follow These 8 Steps to Set Up Your SMSF Setting up an SMSF properly can be a complex process. It’s best to set up an SMSF with the assistance of a qualified superannuation advisor, like us! We can assist with both the initial setup and the ongoing management of your fund. There are eight core steps to SMSF set up: Select the appropriate structure and name Sign the trust deed that covers how your SMSF is set up and run (it can have up to four members) Establish a trust for the SMSF by investing assets into the fund Register your SMSF with the ATO Set up a separate bank account for your fund Submit your tax file number (and those of any other trustees) Obtain an electronic service address to receive employer contributions into your fund (if applicable) Roll over funds from your existing superannuation account into your SMSF 3. Keep a Liquidity Buffer If you're buying property through superannuation, make sure you plan to keep a liquidity buffer of cash and/or shares in your fund. Lenders will check for this before lending to you—it should be at least 10% of the value you intend to borrow. But beyond satisfying the bank, it's simply good risk management. Property is an illiquid asset. Having accessible funds in the SMSF means you're not caught short if repairs are needed, the property sits vacant, or an unexpected expense arises. Because superannuation is central to most Australians' retirement security, the government has carefully regulated what can and can't be done with it. They don't want people gambling their retirement away on poor investments or incorrectly using their superannuation fund. 4. Use the Rental Income to Repay Your Loan You cannot live in the property you purchase through your SMSF until after retirement. Most people purchase an investment property and use the rental income generated to repay the loan—which makes excellent financial sense. The key is selecting a property that rents easily and delivers a strong rental return. Your purchasing criteria may look a little different to buying a home you'd live in yourself. For example, proximity to public transport, local amenities, and average rental rates in the area matter more than personal preference. 5. Get It Right and Enjoy Significant Tax Efficiencies One of the most compelling reasons to invest in property through superannuation is the tax efficiency on offer. These benefits can significantly improve the long-term return of a property investment compared to holding it in your own name. Key tax benefits include: No capital gains tax or tax no yearly investment earnings if under super caps. Salary sacrifice advantages if you're sacrificing salary payments into super, loan repayments are effectively tax deductible. Capped tax on investment income—the maximum rate of tax on income after expenses is 15%. Any capital gains on investments held for 12 months or more, is taxed at 10%. Standard investors outside super can pay up to 47%. 6. Follow the Same Due Diligence Rules as Any Property Purchase Buying through superannuation doesn't mean relaxing your standards. If anything, the rules governing SMSFs mean you need to be more rigorous, not less. Property is likely one of the most significant financial decisions of your life. Research, not emotion, should drive your choices. The same rules apply whether you're buying in or out of super: Visit and compare multiple properties Know the values of similar properties in the same area Get all property checks performed by the right professionals Shop around for the right loan structure and lender Don't abandon good investor habits just because the structure is different. 7. Always Get Quality Professional Advice Nothing comes without risk—but the right advice significantly mitigates it. The key is understanding what you're getting yourself into: making informed decisions based on accurate data; keeping a diversified superannuation portfolio that doesn't place all your eggs in one basket; and not underestimating how complex buying property in superannuation can be. Sound Simple? It’s all in the details. If the above tips have made it sound straightforward, know that the detail is where the complexity lives. Getting professional advice from the start helps ensure you make the best possible decisions for your future. When selected according to rigorous property-purchasing criteria, property can be an excellent way to grow your superannuation and increase your chances of building a retirement fund that supports the lifestyle you want. Ready to Explore Property in Your SMSF? Whether you'd like to discuss whether an SMSF is right for you or need help setting one up, reach out to Ascent Accountants . If you want assistance managing the property within your fund, contact the Ascent Property Co team .
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At Ascent Property Co and Ascent Accountants, we know that in a competitive real estate market, how you structure your offer is just as important as the price you're willing to pay. While "cash is king" is an old adage, in property, it’s all about the certainty it provides. Here is everything you need to know about navigating cash offers to secure your next home or investment. How a "cash offer" actually works. There is a common misconception that a cash offer requires a literal suitcase of money. In reality, a cash sale simply describes an offer where the finance clause is removed from the contract. By signing a contract stating the finance clause is not applicable, you are making an unconditional offer. It doesn't necessarily mean the money is sitting in a transaction account today; it means you are waiving the right to walk away if a bank denies a loan. You are declaring you have guaranteed access to the funds required for settlement. The legal process of selling for cash is identical to a standard sale, minus the 21–28 day waiting period usually required for finance approval. Why sellers prioritise cash offers. Sellers are often motivated by more than just the highest number. Many will accept a lower purchase price if the offer is cash. Sellers love cash offers because they remove the "finance fallback". There’s no anxiety over whether a buyer’s bank valuation will come in short or if their loan will be rejected. Plus, without a finance clause, the sale process is hastened. Buyers can often move in sooner, which is a major draw for sellers looking for a quick transition. In a multi-offer situation, a cash unconditional offer acts as a point of difference, making your bid significantly stronger than those subject to finance. Preparing your cash offer. Because a cash offer removes your safety net, being organised is non-negotiable. Experienced purchasers—such as repeat buyers and savvy investors—often use this strategy because they have prepared their financial position in advance. Verify your liquidity . Before waiving the clause, ensure your funds (whether from a previous sale, equity, or private wealth) are ready for settlement. Assess the risks . The risks of a cash offer are the same as a financed offer after approval—the primary danger is defaulting on the contract. Build agent trust . Agents cannot legally demand to see your bank statements, so they rely on professional judgment to determine if an offer is genuine. Presenting yourself as a serious, organised buyer is key. Ready to make your move? Whether you need to review your tax structures for an investment or want to discuss the logistics of an unconditional offer, Ascent Property Co and Ascent Accountants are here to help succeed.
