Proposed Reforms Set to Shake Up Property Law in Victoria

19 August 2026

The property sector in Victoria is facing its most significant changes for the first time in decades. The Victorian Government has recently introduced the Consumer Legislation Amendment Bill 2026 (Vic) (Bill) proposing broad and significant reforms to the real estate and property sector from 1 June 2027. While it is not law yet, the significance of the proposed reforms calls for all agents, conveyancers, lawyers, buyers and sellers to start familiarising themselves early as it will impact deposit handling, preparation timing, transparency and more!

Quick Snap-Shot of the Proposed Reforms and What They Mean for Stakeholders

1. A New 14-Day Section 32 Rule

Currently Vendors are able to compile and update Section 32 Statements right up until the day of sale or an auction. Whilst not ideal for buyers, it happens more often than you would think! The proposed reforms mandate that a Vendor must now provide the completed and signed Section 32 statement to prospective buyers at least 14 days prior to an auction date or the date the contract is fully executed.

The impact on this new proposal for sellers means less flexibility and spontaneity. The days of spontaneous off market deals are over! Failure to comply may give purchasers a right to terminate and could compromise marketing schedules and delay auctions. It will mean that sellers will need to engage a conveyancer or solicitor for preparation of the Contract and Section 32 a lot earlier, it may also put more strain on Conveyancers and Solicitors to prepare these documents in time.

On the other hand, for buyers, it will mean more power and less pressure and stress! It will allow buyers to slow down and complete important due diligence checks without the pressure of missing out, thereby levelling the playing field against aggressive sales tactics. Buyers will have more time to liaise with their conveyancer or solicitor, to have a contract properly reviewed and more time to speak with their broker about property affordability.

2. The Repeal of Section 27

Currently, vendors have the option to request the early release of deposit prior to settlement. Without a legally valid reason to object, even if the purchaser does not agree, the deposit is able to be released to the vendor 28 days after serving a Section 27 notice. If the purchaser consents the deposit can be released immediately. The Bill proposes to remove Section 27 from the Sale of Land Act 1962 (Vic), completely removing the option to obtain an early release of deposit money. In addition, agents will be prohibited from taking their sales commission from the deposit prior to settlement.

For sellers, this proposal could have significant financial implications and mean more thought, money and planning would need to go into their next purchase. For example, if you were planning to use your buyer's deposit to purchase your next property, or use as a down payment for a high cost item, or bridging finance, you will need alternative funding structures. Vendors may also experience increased pressure to accept shorter settlement periods, particularly where agents are comparing multiple offers. Vendors could potentially consider inserting a special condition that allows early access to the deposit, however this would need to be mutually agreed to prior to signing the contract.

In contrast, with deposits locked until settlement, and agents prohibited from taking out their commissions, buyers are offered a lot more certainty and have lower financial risk if a vendor defaults or if the contract falls through before settlement. They will no longer be left in the difficult position of trying to recover their deposit that was released early if things do not go to plan. Buyers' solicitors and conveyancers may also see more negotiation power around deposit release terms as a result.

3. 7 days Out Reserve Price Disclosure

Some agents will advertise a property for auction and underquote on the listing to attract a wider audience. Transparency issues have plagued the real estate industry for some time. The Bill seeks to address these issues by proposing a legal requirement on agents to publicly disclose the Vendors Reserve Price at least 7 days prior to an auction or fixed date sale.

For sellers the reserve price disclosure requirement means less flexibility and strategy can be used. It will require agents and auctioneers to have honest, open and data-driven discussions with sellers a lot earlier in the transaction to come up with a reasonable reserve price ahead of the cut off times.

On the other hand, for buyers it reduces uncertainty. Buyers will better understand whether a home suits their budget before spending money on things like building and pest inspections. Pre-auction offers may also get competitive!

Industry Outlook

While the government notes the proposed reforms are necessary to enhance consumer transparency and buyer protection, industry bodies like the Real Estate Institute of Victoria have raised concerns. Critics warn that strict reserve pricing rules and extended disclosure timelines could introduce unintended litigation risks and suppress market flexibility in fluctuating economic environments.

It seems as though success after 1 June 2027 will come through planning well ahead. Sellers should engage their legal representative weeks or months earlier and buyers should take advantage of the extra time to ensure that all due diligence checks are completed. Professionals should prepare for stricter compliance to allow for a smooth transition.