If you're buying property in Victoria, your settlement will almost certainly happen on PEXA — Property Exchange Australia's electronic settlement platform. Since 2018, electronic conveyancing has been mandatory for most property transactions in Victoria, replacing the old paper-based system where lawyers physically met in a settlement room to swap cheques and documents.
What is PEXA?
PEXA is an online platform that enables property settlements to occur digitally. Instead of physical meetings, all parties (your conveyancer or solicitor, the vendor's representative, and the banks) connect through the PEXA workspace to exchange documents and funds electronically.
The platform was developed in conjunction with state and territory governments and land registries. In Victoria, Land Use Victoria (part of the Department of Transport and Planning) is the relevant land registry authority.
How electronic settlement works
Step 1: Workspace creation
After you sign the Contract of Sale, your conveyancer or solicitor creates a PEXA workspace for the transaction. They invite the vendor's representative and the relevant financial institutions (your lender and the vendor's lender if there is a mortgage to discharge).
Step 2: Document preparation
Within the workspace, each party prepares their documents digitally:
- Transfer of Land: Your conveyancer prepares the Transfer of Land instrument, which transfers ownership from the vendor to you
- Mortgage: Your bank prepares the mortgage document to be registered against the title
- Discharge of mortgage: If the vendor has an existing mortgage, their bank prepares the discharge
- Stamp duty: Your conveyancer lodges the stamp duty payment with the State Revenue Office through PEXA
Step 3: Financial settlement
On settlement day, the following financial transactions occur simultaneously through PEXA's integration with the Reserve Bank of Australia's settlement system:
- Your bank releases the loan funds
- Your own contribution is transferred
- The vendor's existing mortgage is discharged
- The vendor receives the net sale proceeds
- Stamp duty is paid to the State Revenue Office
- Land registration fees are paid
- Conveyancing fees may be deducted
Step 4: Title registration
Once funds settle, PEXA automatically lodges the Transfer of Land and new mortgage with Land Use Victoria. The title is updated to show you as the new registered proprietor, typically within hours of settlement rather than the days or weeks it used to take under the paper system.
Benefits of electronic settlement
- Faster: Settlement and title registration happen on the same day, compared to several days under the paper system
- Fewer errors: Digital documents reduce the risk of typos, missing signatures, and document mishandling
- More secure: Bank-grade security and identity verification reduce fraud risk
- Real-time tracking: Your conveyancer can see the status of all parties in the workspace and identify delays early
What PEXA costs you
The PEXA platform fee is paid by your conveyancer and typically passed on to you as a disbursement. Current fees are approximately:
- Subscriber fee (paid by your conveyancer): Included in their fee structure
- Transaction fee:Approximately $100–$130 per transaction, usually passed on as a disbursement
Can settlement still go wrong on PEXA?
Yes. While PEXA eliminates many of the logistical issues of paper settlement, some problems persist:
- Bank delays in authorising fund transfers remain the most common cause of delayed settlement
- Outstanding rates, water charges, or OC levies that haven't been paid can hold up settlement
- Discrepancies in the settlement statement that need to be resolved between parties
- PEXA system outages (rare, but they have occurred)
Your role in electronic settlement
As a buyer, you don't interact with PEXA directly. Your conveyancer or solicitor manages the entire process on your behalf. Your main responsibilities are:
- Ensuring your deposit and any additional funds are available before settlement day
- Completing a Verification of Identity (VOI) with your conveyancer, which involves presenting original ID documents in person or via video call
- Signing loan documents from your bank
- Completing your pre-settlement inspection of the property
Understand the process before it begins
Electronic settlement runs more smoothly when the underlying documents are correct from the start. A Pre Contract Review at precontractreview.com identifies issues in your Section 32 and Contract of Sale that could delay settlement — giving you and your conveyancer time to resolve them early.