What forms of payment are accepted as a deposit at a rate auction?

Councils and their agents require cleared funds — typically a bank cheque or a bank guarantee. Cash and personal cheques are generally not accepted. At many auctions you must be able to pay a deposit (often a set percentage of the price) on the fall of the hammer. Always confirm the exact form required, and who it should be made out to, in the conditions of sale for the specific auction.

How much is the deposit at an Australian rate auction?

It depends on the sale and the state. At a council rate sale it is common to pay a deposit of around 10% of the purchase price on the fall of the hammer. At an insolvency auction the liquidator sets the deposit in the conditions of sale, and at a mortgagee auction the lender's agent sets it in the contract of sale. There is no single national figure — always confirm the amount required in the conditions of sale for the specific auction.

What extra costs apply beyond the winning bid?

Costs beyond the bid can include Land Titles Office lodgement and transfer fees, transfer (stamp) duty where it applies, legal or conveyancing fees, and in some cases the auctioneer's or liquidator's costs. Some sales may also carry accrued rates. Budget for these extras and confirm the details in the conditions of sale or with your own advisers before you bid.

What happens if the successful bidder doesn't pay the balance?

If the successful bidder doesn't settle within the timeframe, the deposit is generally forfeited to the council, the estate, or the creditors, depending on the sale. The property may then be offered to the underbidder or re-auctioned at a later date. The exact consequences and timeframes vary by sale type, so read the payment terms in the conditions of sale before you commit.

Deposits and Payment Rules at Australian Rate Auctions

Winning an auction is only half the job — you also have to pay correctly, on time, and in the required form of funds. The deposit and payment rules trip up more first-time buyers than the bidding itself: the wrong instrument, a deposit that falls a few dollars short, or a missed settlement deadline can cost you both the property and your deposit. This guide explains the money mechanics of an Australian rate auction — what you pay, when, in what form, and what happens if you can't complete the purchase. Because exact figures and timeframes vary by sale type and by the specific case, treat everything below as a general framework and confirm the details in each set of conditions of sale.

New to rate sales? The deposit and payment rules are built into the process itself. Read our guide How Rate Sales Work in Australia for the step-by-step process, then use this article to plan the money side.

Accepted forms of deposit: cleared funds only

The most important rule is the form of payment. Councils, their agents, and liquidators want cleared funds so there's no risk of a rejected payment. In practice that means a bank cheque or a bank guarantee — instruments a bank already stands behind. Cash and personal cheques are generally not accepted. At a council rate sale, this isn't just custom: the conditions of sale require you to be able to pay the deposit, made out to the council conducting the sale, immediately on the fall of the hammer.

Bank cheque — a bank-issued cheque drawn on the bank's own funds, made out as the conditions require.
Bank guarantee — issued by a bank and backed by its own funds.
Electronic funds transfer to the trust account of the council or agent — in some cases, by transfer to the account named in the conditions.

Make the instrument out exactly as the conditions require (usually to the council, the agent, or the liquidator), and confirm whether the specific auction also accepts electronic funds transfer. Arranging a bank cheque or bank guarantee takes bank paperwork, so don't leave it to the last minute before the auction.

Deposit amount: by sale type

How much you must pay depends on the sale type, and there is no single national figure.

Council rate sale — a percentage of the price

At a council rate sale, to bid you generally must be able to pay a deposit (commonly around 10% of the purchase price) by bank cheque on the fall of the hammer. Underbidders who don't win the property keep their funds; the successful bidder's deposit counts towards the purchase price. Confirm the exact percentage required in the conditions of sale for the specific auction.

Insolvency and mortgagee auctions — per each set of conditions

At an insolvency auction, the liquidator sets the deposit amount and form in the conditions of sale, with any notices published through ASIC or AFSA. At a mortgagee auction, the lender's agent sets the deposit in the contract of sale. In both cases, the amount — whether a fixed figure or a percentage — varies by the case. Don't assume a percentage carries from one sale type to another. The only reliable source is the conditions for that specific auction.

Paying the balance (settlement)

After the deposit comes the balance — the rest of the purchase price, paid at settlement. Here too the timeframe depends on where you're buying. At a council rate sale, settlement usually happens within a set period after the auction, commonly a matter of weeks (for example 30–42 days) as stated in the conditions. At a mortgagee or insolvency auction, settlement terms vary by the case — some require quick settlement, others allow a standard period. If you miss the deadline, you risk losing the property and your deposit, so arrange your finance before you bid, not after you win.

Extra costs beyond the bid

Your winning bid is not the total cost of the purchase. Budget for the extras that add up:

Registration and transfer fees — Land Titles Office lodgement and transfer fees, plus transfer (stamp) duty payable to the State Revenue Office where it applies, to register the property in your name.
Legal or conveyancing fees — to review the sale, run the title search, and handle registration.
Auctioneer's or liquidator's costs — in some cases, sale costs or the liquidator's commission per the conditions.
Accrued rates and charges — some sales require the successful bidder to also cover rates accrued during the process.

Confirm which of these apply — and how they're calculated — in the conditions of sale, and consider getting your own legal and tax advice before you commit. A little due diligence on the figures now avoids a nasty surprise when it's time to pay.

If you can't pay

Committing to a bid you can't fund is the most costly mistake in rate-sale investing. If the successful bidder doesn't settle within the timeframe, the deposit is generally forfeited to the council, the estate, or the creditors. From there, the property may be offered to the underbidder or re-auctioned at a later date. The precise consequences — how long you have, whether there's any grace, and what happens to the property afterwards — vary by sale type. Read the payment and default terms carefully before you bid, and never bid an amount you can't cover with cleared funds within the required timeframe.

Deposit and payment at a glance

Item	What to expect	Confirm in the conditions
Deposit form	Bank cheque or bank guarantee — not cash or personal cheques	Accepted instruments and payee
Amount (council rate sale)	Commonly around 10% of the price	Exact percentage in the conditions of sale
Amount (insolvency / mortgagee)	Set by the liquidator or the lender's agent; varies by the case	Exact amount and form in the conditions
Settlement timeframe	Weeks after the auction — varies by sale type	Exact period and how to pay
Extra costs	Registration and transfer, legal/conveyancing, auctioneer or liquidator costs	Which costs apply to this sale
If you can't pay	Deposit forfeited; property to the underbidder or re-auctioned	Default terms and any grace

Before you bring your deposit

Confirm the accepted forms of deposit and who the payment must be made out to.
Get your bank cheque or bank guarantee in advance — don't leave the bank paperwork to the last minute.
Check the deposit amount required for that specific auction.
Know the exact settlement timeframe and how the balance must be paid.
Budget for registration and transfer fees, legal or conveyancing fees, and auctioneer or liquidator costs.
Read the default terms so you know what happens if you can't complete the purchase.
Only bid what you can cover with cleared funds within the required timeframe.

💡 Investor tip:Build a simple “all-in” budget before each auction — your maximum bid plus registration and transfer fees, legal fees, and possible auctioneer or liquidator costs — then work back to the deposit you'll need in cleared funds. Bidders who only plan for the headline figure are the ones scrambling to the bank or losing their deposit when the extras land.

Next Steps

This article is general information, not legal, tax, or financial advice. Deposit amounts, accepted forms of payment, settlement timeframes, and extra costs vary by sale type and by the specific case, and can change — always confirm the current requirements in the official conditions of sale and consider consulting a lawyer or tax adviser before you bid. Our platform aggregates official rate-sale notices, updated daily and sourced from official channels, with coverage expanding state by state.

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