# The deposit in a Queensland sale contract: amount, holder, forfeiture
How much a Queensland deposit usually is, when it falls due, who holds it and on what terms, who receives it when a sale settles or ends, and when a buyer can lose it.
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The deposit is the first money to move in a property sale and the last to be released. Between those two moments it sits in an account that belongs to neither party, under rules that most buyers and sellers have never read. Those rules decide a good deal: whether a payment that leaves the buyer's bank on the due date but lands a day later is late, who keeps the interest, and what happens to the money if the sale falls over.
In Queensland the rules come from three places. The standard contract published by the Real Estate Institute of Queensland and the Queensland Law Society sets out when the deposit is due and who becomes entitled to it. Legislation governs the trust account in which an agent holds it. And the general law of contract, applied by the courts, decides what a missed payment costs. This guide follows the deposit through each stage, quoting the first edition of the residential contract that has been in use since 1 August 2025. It is general information, and the outcome in any one sale depends on the contract the parties signed.
10%the usual ceiling for a deposit on an existing home
2 daysbusiness days to fix a transfer that has not arrived
60 daysthe pause when both sides claim trust money
Spot On Conveyancing summary of Queensland instalment contract rules; REIQ and Queensland Law Society residential contract, first edition, clause 2.1(4); Agents Financial Administration Act 2014, section 26, as described by the REIQ.
## What a deposit is for
A deposit is not a down payment in the everyday sense. It is security for the buyer's performance. By paying it, the buyer shows the offer is serious and gives the seller something to keep if the buyer later walks away without a right to do so. If the sale completes, the deposit simply becomes part of the price: the contract defines the balance purchase price as the purchase price less the deposit paid by the buyer.
That purpose explains two features that surprise people. The first is that the deposit does not go to the seller when it is paid. The contract says the deposit holder holds it until a party becomes entitled to it. The second is that the amount is negotiable. No law sets a deposit for an ordinary private treaty sale. The parties write a figure into the reference schedule at the front of the contract, and that figure is the deposit.
## How much, and the 10 per cent line
Custom, not statute, sets the usual range. Deposits on established homes are commonly agreed somewhere up to 10 per cent of the price, and it is common for a buyer with a high-ratio loan to offer less.
There is, however, a legal reason deposits stop at 10 per cent. Queensland's property legislation gives special treatment to what it calls an instalment contract. A summary of the rules published by Spot On Conveyancing, updated in December 2025, explains that a contract for an established property can be reclassified as an instalment contract if the deposit exceeds 10 per cent of the purchase price, and that the threshold is 20 per cent for a lot bought off the plan. The consequences fall on the seller: the summary lists a requirement to give at least 30 days' written notice before terminating for a payment default, a restriction on mortgaging the property without the buyer's consent, and a right for the buyer to lodge a caveat. Titles Queensland's practice manual confirms the last point, noting that a purchaser under an instalment contract may lodge a caveat under section 93 of the Property Law Act 2023 and that such a caveat does not lapse.
Sellers and their solicitors therefore have good reason to keep the deposit at or under 10 per cent, and standard practice follows.
## When it falls due
The reference schedule splits the deposit into an initial deposit and a balance deposit, if any. The printed note beside the initial deposit says it is payable on the day the buyer signs the contract unless another time is specified. In practice another time usually is specified. The Queensland Government's guidance for buyers says a deposit typically has to be paid once the contract becomes binding, usually within two or three days depending on the contract's terms, and its guidance for sellers uses the same range.
A common pattern is a small initial deposit on signing and the balance when the contract becomes unconditional, for instance on the finance date. Whatever the pattern, each date written into the schedule is a deadline with full force. Clause 2.1 is listed in the contract's definition of an essential term, and clause 6.1 makes time of the essence. A buyer who has not paid by the date is in default, and clause 9 then gives the seller the choice of keeping the contract alive or ending it.
The Government's guidance also clears up a frequent misunderstanding. Money handed over with an offer, before the seller has signed, does not secure the property. The seller can still decline the offer, in which case the money comes back.
## Paying it: transfers, cheques and the two-day notice
Most deposits are now paid by bank transfer, and the contract has been written around the ways a transfer can go wrong. Clause 2.1(3) deals with timing. If the buyer makes an electronic transaction to pay the deposit on a day, gives the deposit holder written evidence that it has been made, and does nothing to defer the payment, the deposit is taken to have been received that day, even if circumstances beyond the buyer's control mean it reaches the account later.
The protection has a time limit. Under clause 2.1(4), if the money has not arrived by the due date the seller may give the buyer notice saying so. If it has still not reached the deposit holder's account by 5pm on the date two business days after that notice, the protection falls away and the buyer is in default.
When a transfer is made on time but arrives late
The buyer pays and proves itThe transfer is made on the due date and written evidence goes to the deposit holder. The deposit is treated as received that day.
The seller gives noticeIf the funds are not in the account by the due date, the seller may tell the buyer in writing.
Two business days runIf the money has not landed by 5pm on the second business day after the notice, the buyer is in default.
Two points follow from the wording. The clause helps only a buyer who actually sent the whole amount on the day. A buyer who is stopped by a daily transfer limit and sends the rest tomorrow has not made the payment on the due date. And the evidence has to be given: a receipt that stays on the buyer's phone does not meet the condition.
Cheques are treated more bluntly. Clause 2.1(2) says the buyer is in default if the deposit is paid by a post-dated cheque or by a cheque that is dishonoured.
The reference schedule carries one more warning, printed beside the price. It tells the parties that criminals impersonate lawyers and agents by email, and that before paying money on the strength of account details received by email or shown in the contract, the payer should telephone the intended recipient to confirm them. For a deposit, that means checking the trust account number by voice before sending anything.
## Who holds it, and on what terms
The schedule names a deposit holder. It is usually the seller's real estate agent, sometimes a solicitor. The contract defines the deposit holder as the person or financial institution named to hold the deposit until a party becomes entitled to it. The role is that of a stakeholder: the holder keeps the money for whichever side turns out to be entitled, and does not hold it as the seller's property.
Where the holder is an agent, the money goes into a trust account regulated by the Agents Financial Administration Act 2014. The Queensland Government's guidance for sellers puts it simply: the deposit gets paid into the agent's trust account, and a seller should ask the agent to say straight away if it arrives late.
The deposit may be invested. Under clause 2.2, if either party instructs the deposit holder and it is lawful, the holder must place the money in an interest-bearing account with a financial institution in the names of the parties, and give them a statement at 30 June each year and when the money is paid out. Clause 2.3 then deals with the interest. It follows the deposit: whoever is entitled to the deposit is entitled to the interest. The same clause says the deposit is invested at the risk of the party who is ultimately entitled to it. On a short settlement the sums are small, which is why many deposits are never invested at all.
## Who receives it in the end
Clause 2.3(1) answers the question in three lines, and almost every deposit story is a version of one of them.
Where the deposit goesStandard residential contract, clause 2.3
What happened
Who is entitled
Typical examples
The contract settles
The seller
The deposit is released as part of the price.
The contract is terminated without default by the buyer
The buyer
Finance not approved, an unsatisfactory inspection report, cooling-off, defective disclosure, seller default.
The contract is terminated owing to the buyer's default
The seller
The deposit or the balance of the price was not paid on time.
The middle row covers the most ground. A buyer who ends the contract properly under the finance condition or the building and pest condition has not defaulted, and takes the deposit back. A buyer who withdraws during the statutory cooling-off period also recovers it, less a charge: the warning printed above the buyer's signature states that a termination penalty of 0.25 per cent of the purchase price applies. And a buyer who terminates under the seller disclosure rules is refunded under the legislation that creates that right.
The clause adds one limit. Where the contract is terminated and the buyer is entitled to the deposit, the buyer has no further claim once the deposit and any interest are received, unless the termination was due to the seller's default or breach of warranty. A buyer whose loan is declined gets the deposit back and nothing more.
## Forfeiture, and what else a seller may claim
Forfeiture is the third row of the table. If the buyer fails to comply with an essential term, clause 9.1 lets the seller affirm the contract or terminate it. A seller who terminates may, under clause 9.4, do any or all of four things: resume possession, forfeit the deposit and any interest earned, sue for damages, and resell.
The deposit is therefore a floor under the seller's remedies, not a ceiling over them. Clause 9.6 allows the seller to recover from the buyer any deficiency in price on a resale, with the expenses of the resale, provided the resale settles within two years of termination. Two further provisions matter where the deposit was never paid in full. Clause 2.1(5) lets the seller recover any unpaid part of the deposit from the buyer as a liquidated debt. And clause 9.9 charges interest at the contract's default interest rate on any amount not paid when due.
That rate is a figure few people look up before signing. If the schedule is left blank, it is the rate published by the Queensland Law Society that applies at the contract date. The Society's interest rates page gives it as 10.84 per cent a year, simple interest, from 1 December 2025; it was 10.61 per cent from 1 April 2023 until then.
A worked example shows the scale. The figures are illustrative. Take a price of $800,000 with a deposit of $40,000, which is 5 per cent, payable as $5,000 on signing and $35,000 on the finance date. If the buyer cools off in time, the penalty is 0.25 per cent of $800,000, or $2,000, and the rest of whatever has been paid is returned. If the buyer pays the $35,000 balance ten days late and the seller chooses to keep the contract on foot, interest at 10.84 per cent on $35,000 for ten days comes to about $104. If instead the seller terminates for the late payment, the whole $40,000 is at stake: the $5,000 already held can be forfeited and the unpaid $35,000 pursued as a debt.
The costly misreading
A late deposit is a default, even when the sale is otherwise on track
Paying the deposit on time is an essential term of the standard contract. A buyer who is days from settlement and fully funded can still lose the contract, and the deposit, over a payment that missed its date.
## Extensions, agents and text messages
Because the stakes are high and the cause is often a bank's processing limit, buyers in difficulty tend to ask the agent for a day's grace. The courts have treated that as a dangerous habit.
Law firm Attwood Marshall, writing for agents on 30 April 2026, described a Supreme Court decision in which a buyer's deposit was late and the agent had indicated that this was acceptable. The court found, in the firm's account, that the agent had no actual or ostensible authority to grant an extension on the seller's behalf, and the buyer lost the deposit. The firm's conclusion was that any variation of a deposit date should be arranged between the parties' solicitors and not negotiated through the agent, and that a bank's delay will not necessarily protect a buyer.
The lesson is about who can change the contract. The deposit date is a term agreed between buyer and seller. Only the seller, or someone with the seller's authority, can agree to move it, and an agent's goodwill is not that authority. A change is safest in writing, from the seller's solicitor, before the original date passes.
## When both sides claim the money
Sometimes a contract ends and each party says the deposit is theirs. The buyer says the finance condition was properly used; the seller says the notice was late. The agent holding the money is caught between them.
The Agents Financial Administration Act 2014 has a procedure for this. An REIQ article of 9 February 2021, discussing a tribunal decision about an agent who paid out trust money wrongly, set out how section 26 works. The agent notifies the parties that there is a dispute. A period of 60 days begins, in which either side may start proceedings. If the 60 days pass with no proceedings and no other lawful instructions from the parties, the payment may be made to the person named in the notice.
The same article stressed the limit of that power. The appeal tribunal in the case said the section does not allow an agent to adjudicate on the rights of the parties. An agent is not a judge of who was right, and once the parties give lawful instructions about the money the agent must follow them. In the case discussed, the agent was fined $5,000 with $2,223.75 in costs and was ordered to reimburse $24,500 paid from the claim fund.
For buyers and sellers the practical meaning is patience. A disputed deposit does not come out of trust on one side's demand. It stays where it is until the parties agree, a court or tribunal decides, or the statutory process runs its course.
## Reading the deposit lines before signing
The deposit occupies only a few lines of the reference schedule, and each one is worth a moment before the contract is signed.
The first is the amount, checked against the 10 per cent line and against what the buyer can actually move in one day through online banking. The second is the timing of each part, and whether "on signing" has been left to apply by default because nothing else was written in. The third is the deposit holder's name and account, confirmed by telephone before any transfer. The fourth is the default interest rate box, which either carries a figure or leaves the Law Society's published rate to apply.
> The deposit holder keeps the money for whichever side turns out to be entitled to it. Until then it belongs, in practice, to the contract.
None of this is complicated once it is seen in order. The deposit is paid by a date, held by a stakeholder, and released according to how the contract ends. Trouble tends to start at the first of those steps, with a payment that everyone expected to be a formality.