NSW Legal Requirements for Selling Your Home
Legal Requirements for Selling Your Home in New South Wales
See Complete New South Wales Private Sale Guide
When selling a property in New South Wales, whether through a real estate agent or privately (FSBO), there are critical legal requirements you must follow. Understanding these obligations protects both you and your buyer throughout the sale process.
The Four Essential Legal Requirements in NSW
1. Contract of Sale
What is it? The Contract of Sale is the legally binding document that outlines all terms of your property transaction. In NSW, this must be prepared before you can advertise or market your property—it's illegal to market without a prepared contract.
What must be included:
Full property details (address, lot/plan, title information)
Purchase price and deposit terms
Settlement date and conditions
Vendor (seller) and purchaser (buyer) details
Special conditions (if any)
Fixtures and fittings included/excluded
All required certificates and disclosure documents attached
Who prepares it? Only a qualified professional can prepare your Contract of Sale:
Solicitor - Licensed legal professional (~$300)
For FSBO Sellers: Engaging a solicitor or conveyancer is mandatory—you cannot legally prepare or use your own contract. This investment protects you from costly legal mistakes and ensures compliance with NSW property law.
Important: In NSW, you must have a prepared contract available before you can advertise your property for sale. This is different from other states and is strictly enforced.
2. Section 66W Certificate (Vendor's Statement)
What is it? The Section 66W Certificate, commonly called the Vendor's Statement or Section 66W, is a document that provides essential information about your property to potential buyers. This must be given to buyers before they sign a contract.
What must be included:
Zoning Certificate - Shows current zoning and any development restrictions
Planning Certificates (Section 10.7) - Details council records, constraints, and notices
Drainage Diagram - Shows location of water, sewer, and stormwater services
Title Documents - Copy of Certificate of Title or Torrens Title
Copy of any covenants, easements, or restrictions affecting the property
Owners Corporation documents (if strata/community title) - including bylaws, levy notices, building reports
Contract of Sale - The prepared contract must be attached
For Swimming Pools: If your property has a pool or spa, you must also include:
Valid Pool Safety Certificate of Compliance (less than 3 years old)
Certificate of Non-Compliance with a notice of proposed rectification work (if not compliant)
Timeframe: All certificates and searches should be current (less than 3 months old for most documents). Some certificates like planning certificates must be dated within specific timeframes.
Cost: Obtaining all required certificates typically costs $300-$600, depending on your property type and location.
3. Disclosure Requirements
What you must disclose: NSW law requires you to disclose any material facts that could affect a buyer's decision to purchase. This includes:
Known Defects:
Structural issues (cracks, subsidence, water damage)
Pest infestation (termites, borers)
Flooding or drainage problems
Defective plumbing or electrical systems
Asbestos presence
Previous fire or flood damage
Legal Issues:
Outstanding council orders or notices
Unresolved building work without approval
Boundary disputes with neighbors
Tree preservation orders
Heritage listings or restrictions
Building Work:
Renovations completed without council approval
Non-compliant additions or alterations
Unapproved building work
Environmental Issues:
Contaminated land
Known hazardous materials
Noise pollution or nuisance issues
Consequences of Non-Disclosure: Failing to disclose material facts can result in:
Buyer rescinding the contract
Legal action for misrepresentation
Compensation claims
Fines and penalties
When in doubt, disclose. It's better to be transparent upfront than face legal consequences after settlement.
4. Deposit Trust Account Requirements
The Critical Rule: In New South Wales, sellers cannot legally hold the deposit themselves. Deposits must be held in a trust account by a licensed professional.
Who can hold deposits:
Licensed solicitor's trust account
Licensed conveyancer's trust account
Licensed real estate agent's trust account (if using an agent)
Approved deposit bond provider
Standard Deposit Amount: Typically 10% of the purchase price, though this is negotiable:
$800,000 property = $80,000 deposit
$1,000,000 property = $100,000 deposit
How it works:
Contract is signed by both parties
Buyer pays deposit (usually within 24-48 hours) to the trust account holder
Deposit is held securely until settlement
At settlement, deposit is released to the seller as part of the total purchase price
If sale falls through, deposit handling depends on contract terms and circumstances
What Happens to the Deposit:
Successful Settlement:
Deposit forms part of the total purchase price
Released to seller on settlement day
Buyer pays the balance (purchase price minus deposit)
Buyer Defaults:
You may be entitled to keep the deposit as compensation
Requires formal default process through your solicitor
Additional damages may be claimable if losses exceed deposit
Seller Defaults:
Deposit must be returned to buyer
You may owe additional compensation
Serious legal and financial consequences
Cooling-Off Period Withdrawal (Buyer):
In NSW, buyers have a 5-business-day cooling-off period (unless waived)
If buyer withdraws during cooling-off, they forfeit 0.25% of purchase price
Remainder of deposit is returned
Important: Never accept deposits directly into your personal account. This violates NSW property law and can result in fines, contract invalidity, and legal action.
Additional Legal Considerations for NSW FSBO Sellers
Auction vs Private Treaty Requirements
Auctions in NSW: If selling by auction, additional legal requirements apply:
Contract and Section 66W must be available at the auction
Auctioneer must be licensed
Auction conditions must be clearly stated
Cooling-off rights do not apply to auction sales
Buyer must pay 10% deposit immediately upon successful bid
Private Treaty (Recommended for FSBO):
More flexibility in negotiating terms
Buyer has cooling-off rights
Access to broader buyer pool (those needing finance)
More time to conduct due diligence
Capital Gains Tax (CGT) Considerations
Main Residence Exemption: If the property is your principal place of residence, you may be exempt from Capital Gains Tax. Conditions include:
You've lived in the property
No income-producing use (e.g., rental)
Land is 2 hectares or less
Investment Properties:
CGT applies on the profit from sale
50% CGT discount if held over 12 months
Consult an accountant before selling
Foreign Purchaser Obligations
If selling to a foreign buyer:
You may need to withhold 12.5% of purchase price for tax purposes
Foreign Investment Review Board (FIRB) approval may be required
Additional reporting obligations apply
Your solicitor will guide you through these requirements
Goods and Services Tax (GST)
Residential Property: Generally, selling your home doesn't attract GST. However:
New residential properties may be subject to GST
Commercial properties typically include GST
Margin scheme may apply in certain circumstances
Consult your solicitor or accountant
Timeline for Compliance: Before Marketing to Settlement
Before Marketing (Weeks 1-2):
Engage a solicitor or conveyancer
Obtain all required certificates and searches for Section 66W
Prepare Contract of Sale
Gather all disclosure documents
Ensure pool compliance (if applicable)
During Marketing:
Section 66W must be available to all interested buyers
Contract of Sale must be available for inspection
Answer buyer inquiries honestly and completely
Update documents if circumstances change
When Offer Accepted:
Provide buyer with Contract of Sale and Section 66W
Negotiate terms through solicitors/conveyancers
Both parties sign contract
Buyer pays deposit to trust account
Cooling-off period begins (5 business days unless waived)
Settlement Period (typically 6-12 weeks):
Buyer conducts building/pest inspections (if conditional)
Buyer arranges finance (if conditional)
Solicitors/conveyancers coordinate settlement
You prepare to vacate property
Rates, water, and utility adjustments calculated
Settlement Day:
Balance of purchase price paid
Deposit released from trust account
You receive full payment
Ownership transfers to buyer
Keys handed over
Professional Support You'll Need
Even when selling privately, you must engage:
Solicitor or Conveyancer (Essential):
Cost: ~$1000 (required even if selling with agent)
Services: Contract preparation, Section 66W compilation, legal compliance, deposit handling, settlement coordination
Optional (but valuable):
Building Inspector: $400-$600
Pest Inspector: $150-$250
Property Valuer: $300-$600
Professional Photographer: $300-$600
Compare to agent commission: On a $1,000,000 property at 2%, you'd pay $20,000 in commission +GST. By selling privately through AirLister and engaging professionals, you save $16,000-$18,000.
Penalties for Non-Compliance
Failing to meet NSW legal requirements can result in:
Fines up to $22,000 for individuals
Contract being void or voidable
Buyer having extended rights to withdraw
Legal action and compensation claims from buyers
Sale falling through at critical stages
Damage to your credibility as a seller
Potential criminal charges for serious violations
Common Mistakes NSW FSBO Sellers Make
❌ Marketing before contract is prepared This is illegal in NSW and can result in significant fines.
❌ Not providing Section 66W to buyers Buyers can withdraw if not provided properly, and you may face penalties.
❌ Holding deposits themselves This violates trust account laws and invalidates the contract.
❌ Failing to disclose known defects Opens you to legal action and compensation claims.
❌ Using outdated certificates Certificates older than 3 months may not be valid.
❌ Not engaging a solicitor early enough Delays marketing and creates compliance issues.
Resources and Support
NSW Government Resources:
NSW Fair Trading: www.fairtrading.nsw.gov.au
NSW Land Registry Services: www.nswlrs.com.au
Service NSW: www.service.nsw.gov.au
Professional Bodies:
Law Society of NSW - Find a Solicitor: www.lawsociety.com.au
Australian Institute of Conveyancers NSW: www.aicnsw.com.au
Need Help? If you're selling privately through AirLister in NSW:
Engage a solicitor or conveyancer before marketing
Obtain all certificates and prepare Section 66W early
Be completely transparent with buyers about property condition
Never attempt to shortcut legal requirements
Selling privately doesn't mean selling alone. Professional legal support ensures your sale is compliant, protects both parties, and gives buyers confidence in your transaction—while still saving you tens of thousands in agent commission.
Disclaimer: This information is general in nature and should not be considered legal advice. Property laws in New South Wales are complex and subject to change. Always consult with a licensed NSW solicitor or conveyancer for advice specific to your situation and property.
Last Updated: January 2026
See how to sell your property without an agent - Here
see how much you could save on commission - Here
See AirListers Pricing - Here
Last updated: January 2026
