Can you use your buyer's deposit to buy your next business premises?

Short answer: yes, sometimes. If your sale contract allows it and your buyer agrees, the deposit sitting in trust can be released to you before settlement and put towards the deposit or duty on your next premises. But a released deposit is not new money. It’s part of your own sale price arriving early, and if the sale unravels in the wrong way, you may have to give it back.

That’s the whole topic in one paragraph. The rest of this guide is the drawings: how release works, what’s changing in Victoria, how to lay out the numbers, and what to do when the buyer says no.

Why vendors ask for the deposit early

The usual picture looks like this. You’ve exchanged on the sale of your workshop, warehouse or consulting rooms. The buyer has paid a deposit, often 10% of the price, and it’s sitting in the agent’s or conveyancer’s trust account. Meanwhile, the premises you want to move into need a deposit of their own, and the vendor of that property won’t wait for your settlement.

That gives you two events and one span:

• Event A: the deposit (and later the duty) on your new premises falls due.
• Event B: your sale settles and the proceeds arrive.

The buyer’s deposit is already sitting there. Releasing it early shortens the span you have to fund, or removes it entirely if the timing is tight enough. Consumer Affairs Victoria notes the deposit is “usually 10 per cent” of the price, though no law fixes the amount.

How does early release work in Victoria right now?

Victoria is the one state with a set statutory process, and it has conditions. According to Consumer Affairs Victoria, for the buyer to release the deposit to you before settlement:

1. The contract must be unconditional. No finance clause or other condition still running for the buyer’s benefit.
2. You give proof of debts information and the buyer must be satisfied with it.
3. Secured debt is limited. You must show there are no debts secured against the property, or that they total no more than 80% of the sale price.
4. Timing: the buyer can’t release the deposit until at least 28 days after the contract was signed.

Read those as load limits. If your premises carry a mortgage above 80% of the price, the release isn’t available under this process. And if your purchase deposit falls due within four weeks of signing the sale, the release can’t arrive in time, however willing the buyer is.

What changes in Victoria from 1 July 2027?

The Consumer Legislation Amendment Act 2026 changes the Sale of Land Act. Consumer Affairs Victoria’s summary of the changes sets out two that matter here, both starting 1 July 2027:

	Until 30 June 2027	From 1 July 2027
How early release happens	Statutory process with the conditions above	Only by a condition included in the contract
When to negotiate it	Can be requested after exchange, once conditions are met	Needs to be in the contract when it’s signed
Agent’s commission	Agents can often take it from a released deposit	Agents must not take commission directly from a deposit released before settlement or rescission

The practical lesson for a vendor planning a 2027 move is simple: decide before you list. If you think you’ll need the deposit early, your conveyancer or solicitor needs to draft the release condition into the contract, and buyers will read it before they sign. If your contract is signed close to the changeover, ask your conveyancer which rules apply to it.

What about NSW and the other states?

Outside Victoria, early release generally comes down to what the contract says. In NSW, for example, vendors commonly add a special condition allowing the deposit to be released before completion, often limited to a stated purpose such as the deposit or duty on the vendor’s next purchase. Buyers and their lawyers frequently resist or narrow these clauses, because they carry the risk if the money is spent and the deal fails.

Rules and standard contracts differ between states and territories, so check with your conveyancer where the property is. The engineering point holds everywhere: a release you haven’t negotiated is not a release you can count on.

A worked example: two paths to the same end debt

Here’s an illustrative case. An owner is selling a light-industrial unit and buying a larger one nearby. All figures are made up for the example.

• Sale: $1.6m, 10% deposit of $160k, existing loan $400k, selling costs $45k. The buyer asked for a 120-day settlement.
• Purchase: $2.4m, 10% deposit of $240k due at exchange on day 30. Settlement on day 150. Duty and purchase costs of $140k due at settlement.
• Cash on hand: $90k.

	Path 1: deposit released	Path 2: no release, deposit bridge
Day 30: purchase deposit	$160k released + $80k cash	$150k bridge + $90k cash
Cash left after day 30	$10k	Nil
Day 120: sale settles, net to you	$1.44m − $400k − $45k = $995k	$1.6m − $400k − $45k = $1.155m, less $150k bridge = $1.005m
Day 150: balance + duty and costs	$2.16m + $140k = $2.3m	$2.3m
Funded by	$995k + $10k cash + new loan	$1.005m + new loan
End debt on new premises	$1.295m	$1.295m plus bridge costs

The end debt is the same. The release didn’t create money; it moved $160k of your own sale price forward by 90 days. What Path 2 adds is the dollar cost of a short bridge. What Path 1 adds is a buyer’s consent and a repayment risk. Run your own timeline in the bridging calculator to see peak debt and end debt side by side.

If the buyer has said no and exchange on your purchase is days away, tell us about the gap. A short deposit bridge can often be lined up against the sale you already have.

Plan for the slow case, not the best case

Both paths above assume the sale settles on day 120. Now push it out. Say the buyer’s financier is slow and the sale settles on day 200, 50 days after your purchase must complete.

• Path 1 now needs about $995k of bridging on day 150, because the long-term loan only covers the planned end debt. You’ve also spent $160k of the buyer’s money.
• Path 2 needs a similar bridge on day 150, plus the existing deposit bridge carried longer.

Either way, the far side of the span has moved and something has to carry the load in between. That’s usually a bridge secured over the property you’re selling, which still has plenty of equity in this example. Lenders will look at the sale contract, the reason for the delay and the buyer’s position. Our page on a delayed settlement covers that conversation, and the sale exit page explains how lenders weigh an exchanged contract.

Then there’s the worst case: the sale contract ends in a way that entitles the buyer to a refund. With Path 1, you owe back money that’s already sitting in the vendor’s trust account on your purchase. That’s the risk buyers are pricing when they resist a release clause, and it’s the one vendors most often forget.

Release, bond or bridge: which tool fits?

Option	Works when	Watch out for
Early release	Contract allows it, buyer agrees, debts are modest, timing fits	Commission deductions, smaller settlement proceeds, refund risk
Deposit bond	The seller of your new premises accepts a bond instead of cash	Not every seller accepts one; it’s not cash for duty or costs
Deposit bridge	Buyer won’t release, or timing rules it out	A dollar cost for the span; needs property security with equity
Long settlement on the purchase	Your new seller is flexible	May cost you on price or terms

Our deposit bridge page explains that structure in more detail. If you’re still deciding on the order of your move, start with sell first or buy first.

The other settlement item vendors overlook

A released deposit doesn’t change your other settlement obligations. If you’re selling commercial property, your buyer may need to withhold an amount for the ATO unless you provide a clearance certificate in time. That’s another reason your settlement proceeds can arrive smaller than expected. Our guide to the clearance certificate before settlement shows how to get it sorted early.

A pre-listing checklist for vendors who’ll need the deposit

1. Map both timelines. Sale exchange and settlement, purchase exchange and settlement, duty due date.
2. Check your secured debt against 80% of the expected price if you’re in Victoria.
3. Tell your conveyancer before listing if you want a release condition, and agree its purpose and limits.
4. Ask how commission will be paid, so the released amount isn’t smaller than your plan assumes.
5. Size a plan B. Know what a deposit bridge would cost and what security it would sit on, before you need it.
6. Keep a refund reserve in mind in case the sale ends in a way that entitles the buyer to their deposit back.

When the release falls short, we can help bridge it

Selling one set of premises and buying the next is a two-event job. Sometimes the buyer’s deposit carries the first span on its own. Often it can’t: the buyer won’t agree, the 28 days haven’t passed, the release clause isn’t in the contract, or the sale slips past your purchase settlement. That’s exactly the gap this site is built around, with the exit worked out from day one.

Telling us about your move takes about 60 seconds, and there’s no credit check when you first enquire. We don’t send your details to a pile of lenders, so your phone won’t light up with strangers. A real person reads your situation, both contracts and both dates, and calls you to talk it through.

Please fill in the form accurately: sale price, deposit, settlement dates, existing loans and the purchase details. Accurate numbers are what let us tell you on the first call whether a release, a short bridge or something else is the right tool.

See if you qualify for a deposit bridge →