Who pays PEXA fees on settlement?

If you have bought or sold property in Victoria in recent years you have probably heard your conveyancer mention "PEXA". PEXA short for Property Exchange Australia is the secure national platform that lets solicitors, conveyancers, banks and the Land Registry complete settlements and lodge title documents online. Paper cheques and settlement rooms have been replaced by digital workspaces and instantaneous fund transfers, making the whole process faster and safer. But the convenience is not free: every successful transaction on the platform attracts a PEXA fee. So who pays that fee when settlement day arrives?

This article unpacks the rules, the industry customs in Melbourne, and a few practical tips so you know exactly what to expect. We have relied on the latest published PEXA pricing, Victorian consumer law guidance and current conveyancing practice.

1. What Exactly Is a PEXA Fee?

PEXA charges a "Transaction Service Fee" for each electronic dealing that is lodged and settled. The fee covers:

• Pre-population of Land Registry data
• Automatic lodgement verification checks
• Title activity monitoring up to settlement
• "Gap cover" protection if a competing dealing sneaks on to the title in the final moments
• Real-time distribution of cleared funds to up to six bank accounts

The fee is separate from State Government charges such as stamp duty, Land Registry lodgement fees and mortgage registration fees. The amount depends on the type of instrument and whether financial settlement is involved. From 1 July 2024 the standard PEXA fees (GST inclusive) are:

Source: PEXA Pricing Schedule FY25, PEXA Australia

2. Who Is Legally Liable for the PEXA Fee?

Under PEXA's Participation Agreement the fee is charged to the subscriber who signs the relevant document in the workspace. In practice the subscriber is your conveyancer, solicitor or lender. They pay the fee at the moment of lodgement and then recover it from their client as a disbursement. Nothing in the legislation says the buyer must pay or the seller must pay it is simply a cost incurred by whichever party's representative completes the step.

PEXA's own "Workspace Fees Overview" notes that the parties can agree for the opposite side to provide funds to cover the fee if they wish.

3. What Happens in a Typical Victorian Property Sale?

Although the law is neutral, clear conventions have evolved in Melbourne:

Purchaser

• Pays the Transfer of Land PEXA fee
• If borrowing, also reimburses their bank for its Mortgage registration and any bank PEXA fee
• Covers any Priority Notice lodged in preparation for settlement

Vendor

• Pays the Discharge of Mortgage PEXA fee (if the property is mortgaged)
• Pays any Withdrawal of Caveat/Encumbrance fee that relates to their title

Because each side looks after its own paperwork, both fees are usually drawn from the buyer's pool of funds at settlement and sent automatically to the correct subscriber accounts. The adjustment sheet will show a debit line "PEXA fee (Purchaser)" and sometimes a second debit for the vendor's discharge if the purchaser's side has agreed to remit it.

4. Can the Contract Shift the PEXA Cost?

Yes. Victorian contracts are commonly varied by special conditions dealing with e-conveyancing. Three approaches are seen:

1. Each party pays its own fee – the default and least controversial option
2. Purchaser pays all PEXA fees – sometimes inserted by vendors in a seller's market, adding roughly $50-$200 to the buyer's costs
3. Vendor pays all PEXA fees – less frequent, occasionally offered by developers to entice buyers

Because the dollar amounts are modest in comparison with stamp duty or loan charges, the clause rarely derails negotiations, but it is worth checking before you sign. If nothing is said, the usual custom (each to their own) will apply.

5. Where Do the Funds Come From on Settlement Day?

PEXA settlements run on a "source and destination" model.

1. Your conveyancer calculates how much money must be available to pay the purchase price plus adjustments, PEXA fees and any professional costs
2. Those funds are uploaded either from your bank (loan proceeds), your trust account deposit or directly from your savings into the PEXA Source Account
3. At the scheduled time PEXA automatically pays, in seconds:
   • The vendor's sale proceeds
   • The Land Registry lodgement fee
   • The vendor's bank to clear the mortgage
   • PEXA Ltd (its own fee lines)
   • Your conveyancer's trust account for professional costs

Because the PEXA fee is built into the line-up, no one has to whip out a card or write a cheque. You pay it once and it is done.

6. Budgeting Tips for Melbourne Property Buyers

• Add at least $140 to your cost estimate for the transfer PEXA fee (one title). More if the property has secondary titles or a car-park strata plan
• Ask your lender how many PEXA fees the bank will pass on – some charge both a refinance fee and a mortgage registration fee
• Remember the fee goes up every 1 July with CPI, so allow a small buffer if settlement straddles the financial year
• Obtain an all-inclusive written quote from your conveyancer so there are no surprise line items on the day

7. Budgeting Tips for Melbourne Property Sellers

• If your loan is being discharged budget $51 for the discharge PEXA fee (FY25)
• If you are releasing any caveats or notices, add those fees to your estimate
• Clarify with your conveyancer whether the purchaser will pay your fee occasionally negotiated in off the plan or distressed sales

8. A Quick Comparison With the Old Paper Settlement System

For most Melbourne clients the marginally higher headline fee is outweighed by the certainty of on-time settlement and instant access to money.

9. Frequently Asked Questions About PEXA Fees

Does the PEXA fee include GST?

Yes all figures in the pricing schedule are GST inclusive, so what you see is what you pay.

Is the PEXA fee tax-deductible?

For investors, the fee forms part of the acquisition cost base and may affect capital gains tax calculations when the property is sold. For principal place owners it is not immediately deductible.

Can I insist on a paper settlement to avoid the fee?

No. Since 2019 electronic settlement is compulsory in Victoria for mainstream land transfers, mortgages and discharges.

Will the fee be waived if settlement fails?

PEXA only charges on successful lodgement. If settlement is postponed the fee line is not triggered until the new date.

10. Key Takeaways About PEXA Fees in Melbourne

• PEXA fees are charged to the subscriber who lodges the document, but the cost is ordinarily passed to the client
• In Melbourne the established custom is purchaser pays the transfer fee, vendor pays the discharge fee
• The parties can negotiate a different arrangement in the contract
• Fees are modest compared with stamp duty and loan charges, but they should still appear in your cost estimate
• Funds are collected automatically through the PEXA workspace, so there is no last-minute scramble on settlement day

Let Us Make Your Settlement Simple

PEXA has taken the drama out of settlement, but understanding exactly who pays what can still be confusing. At Pearson Chambers Conveyancing we break down every cost in plain English before you commit, giving you certainty from day one. If you are buying or selling anywhere in Melbourne, call 03 9969 2405 or email contact@pearsonchambers.com.au for expert guidance and a free Section 32 contract review. We will make sure your PEXA fee and every other cost is spot on, so you can focus on your new home or next move with confidence.