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Kooky
Builder of Shaka, the payment router that pays every agent their commission on closing date.
About Kooky and Shaka →The company that carries out almost all of Australia's electronic property settlements used a public hearing on Tuesday 21 July 2026 to challenge the calculations behind a proposed cut to its fees. In a statement lodged with the Australian Securities Exchange the same day, PEXA Group said the starting value the Independent Pricing and Regulatory Tribunal has placed on its assets is materially understated, and that the tribunal's chosen method is not suited to a digital business.
The hearing was held online as part of IPART's review of the fees charged by electronic lodgment network operators. The tribunal's page for the event says more than 110 people attended, not counting its own staff, and that PEXA and other stakeholders took part. For buyers and sellers in Queensland the argument is technical but its subject is concrete: whether the fee each of them pays for a property transfer falls from $146.30 to $92.71 on 1 July 2027, as IPART's draft report of 3 July proposed, and how quickly.
IPART, public hearing page and draft report on ELNO service fees, 3 July 2026; asset base as at 1 July 2027.
What PEXA told the hearing
PEXA's statement makes four arguments.
The first is about the method itself. IPART proposes to set fees with a building block model, the approach regulators commonly use for water, energy and rail networks. PEXA said the model is not appropriate for regulating digital infrastructure, which it described as capital light in comparison with physical infrastructure.
The second is about the asset base. The company said it believes IPART's proposed initial asset base is materially understated, and warned that carrying the same approach beyond the coming regulatory period would create an unsustainable financial profile for the business.
Related readSelling and buying on one day: simultaneous settlement in QueenslandThe third is about inputs. PEXA said the tribunal's approach relies on inputs that are highly sensitive and contestable, and named three it wants reconsidered: the way depreciation is calculated, the return allowed on historical expenditure, and the assumptions about how long its assets last.
The fourth is a request for caution. The company asked for a more careful approach to a pricing recommendation, to manage what it called operational and regulatory risks.
The statement, authorised by PEXA's chief executive and group managing director, also restated the company's scale: more than 26 million property settlements processed since 2013, and about 90 per cent of Australian property transfers.
How a building block model sets a price
The dispute makes sense only with the method in view. A building block model does not start from what customers are willing to pay or from what competitors charge. It starts from what the regulated business needs.
The regulator adds up a set of cost blocks for each year: the efficient cost of running the service, an allowance for the wearing out of assets, known as depreciation, and a return on the money invested in those assets. The total is the revenue requirement. Dividing it across the expected number of transactions gives the prices.
IPART's draft report sets out its figures for each block.
| Input | Draft figure | What it does |
|---|---|---|
| Initial asset base | $367.6 million at 1 July 2027 | The value on which a return and depreciation are allowed |
| Rate of return | 6.5%, post-tax real | The return allowed on that value each year |
| Operating expenditure | $164.2 million in 2027-28 | The yearly cost of running the service |
| Capital expenditure | $35.9 million in 2027-28 | New investment added to the asset base |
| Transactions | 4.24 million in 2027-28 | The volume the costs are spread across |
IPART, draft report on electronic lodgment network operator service fees, 3 July 2026.
The draft projects operating costs of between $164.2 million and $166.1 million a year across the four years to 2030-31, capital spending of between $35.9 million and $39.1 million a year, and transaction volumes easing from 4.24 million to 4.15 million. It says fees paid on to others, such as registries, revenue offices and the body that maintains the national data standards, make up about 29 per cent of annual operating costs, or around $50 million.
Related readSettlement adjustments: how rates, water, land tax and rent are splitPut together, IPART concluded that at current fees and volumes PEXA earns more than the model's revenue requirement, and that prices need to fall by about 20 per cent overall to close the gap.
Why the asset base carries so much weight
Of all the inputs, the initial asset base is the one PEXA singled out, and the model explains why. Two of the cost blocks, depreciation and the return on capital, are calculated directly from it. A higher starting value produces a higher revenue requirement in every year of the period and in every later period, because the value rolls forward. A lower one does the reverse.
For a pipeline or a power line the starting value is comparatively easy to anchor, since there is physical plant to count. A settlement platform is mostly software, built up over more than a decade, along with the systems and connections around it. Deciding what that history of spending is worth today involves judgments about which past spending counts, how fast software loses its value and what return should have been earned along the way. Those are the three inputs named in PEXA's statement.
IPART's draft does not accept that the method is unsuitable. It recommends the building block approach, applied to PEXA's actual costs, over the alternative of modelling a hypothetical efficient operator. The report records that consultants engaged by the tribunal, TBH, concluded PEXA's current costs are higher than those of a hypothetical efficient operator, but that the tribunal chose not to set prices on that basis because the hypothetical operator differs structurally from PEXA.
Related readSettlement day in Queensland: what happens, in what order, who does itThe case the tribunal has made
The hearing was a chance to test the draft, and the draft's reasoning rests on market structure as much as on cost.
According to the report, PEXA completed 3.95 million electronic conveyancing transactions in 2024-25, about 99 per cent of the electronic market, while the only other approved operator, Sympli, completed about 33,900. The report says most of an operator's costs are fixed and largely independent of the number of transactions, and that PEXA's transactions grew by about 393 per cent between 2017-18 and 2024-25. With fees held flat in real terms since 2019 by an inflation cap, the report says, revenue and earnings grew in line with volumes.
The draft would also close a route by which fees have changed between reviews. It records that PEXA moved to separate pricing schedules for each jurisdiction on 18 May 2026, passing on an external fee of about $1.10 a transaction, plus GST, outside New South Wales. IPART proposes that the company should no longer be able to seek changes to its pricing table during a regulatory period, and that fees be the same in every state and territory.
What it means for a sale in Queensland
Titles Queensland says electronic lodgement has been mandatory since 20 February 2023 for the main documents in a sale, so the outcome of the argument reaches almost every transfer in the state.
Under the draft, the fee for a transfer of a single title with settlement would fall by $53.59, from $146.30 to $92.71 including GST, a reduction of 36.6 per cent. A buyer and a seller each pay that fee through their solicitor or conveyancer, so the two sides of an ordinary sale would together pay $107.18 less. The fees lenders pay to register a mortgage and discharge one would not change.
Related read30, 60 or 90 days: how a settlement period is chosen in QueenslandTiming is the second question. The draft introduces the lower fees in one step on 1 July 2027. PEXA said on 3 July, in its first response to the draft, that the proposals would reduce its regulated revenue by about 20 per cent, which it put at about $70 million, and asked for the change to be phased in over four years. If the tribunal accepted a higher asset base, the reduction itself would be smaller; if it accepted a phase-in, the full reduction would arrive later. The hearing statement presses the first point without putting a number on it.
Nothing changes in the meantime. Current fees apply to every settlement until 30 June 2027.
What comes next
Written submissions close on Friday 14 August 2026, and IPART publishes the agenda, slides and transcript of its hearings alongside the draft report.
- 3 July 2026Draft report published, proposing transfer fee cuts of up to 36.6%.
- 21 July 2026Online public hearing; PEXA lodges its statement with the ASX.
- 14 August 2026Written submissions on the draft close.
- 30 September 2026Final report due to the New South Wales Government and the national registrars' council.
- 1 July 2027Proposed start of new fees, for four years to 30 June 2031.
The final report goes to the New South Wales Government, which commissioned the review on behalf of the other jurisdictions through the Australian Registrars' National Electronic Conveyancing Council. What registrars and governments do with it is a separate decision.
The review has more riding on it than a fee schedule. In March, state and territory ministers endorsed the council's recommendation not to proceed for now with the reform intended to let the two platforms compete for the same transactions. With that set aside, the price of settling a property sale online will be decided by a regulator's model, and the next two months will show which version of the model that is.
Kooky, from Shaka
Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
