As settlement day approaches, your conveyancer will provide you with a settlement statement. For many buyers and sellers — especially those going through the process for the first time — this document can look confusing. Here’s a plain-English explanation of what it is and what the numbers mean.
What is a Settlement Statement?
A settlement statement (also known as a statement of adjustments) is a financial document that outlines all the monetary amounts that need to change hands on settlement day. It ensures that both buyer and seller pay only their fair share of the costs associated with the property — no more, no less.
What Does it Include?
A typical Victorian settlement statement for a buyer includes:
- Purchase price — the agreed sale price
- Less the deposit already paid
- Adjustments for council rates — the seller pays up to and including the settlement date; you pay from that date forward
- Adjustments for water rates — calculated similarly
- Land tax — if applicable
- Owners corporation fees — for properties in a strata or apartment complex
- Stamp duty / Transfer duty
- Conveyancing fees and disbursements
- Registration fees
How are Adjustments Calculated?
Adjustments are calculated on a pro-rata basis. For example, if the current council rate period runs from 1 July to 30 June and settlement occurs on 1 March, the seller will have paid rates for the July–February period. The buyer will then be responsible for March–June, and an adjustment is made accordingly.
When Will I Receive It?
Your conveyancer will typically provide a draft settlement statement 5–10 days before the settlement date so you have time to review it, arrange funds, and ask any questions.
What do I Need to Do?
Once you’ve reviewed the statement and understand the total funds required, you’ll need to arrange for the correct amount to be available for settlement. Your conveyancer will provide specific instructions, which typically involve a telegraphic transfer to your settlement agent’s trust account, or direct payment through PEXA.
Questions About Your Settlement Statement?
If anything on your settlement statement is unclear, contact your conveyancer. It’s important you understand what you’re paying before settlement proceeds. Contact the FC Conveyancing team — we’re happy to walk you through it.