Property Glossary

Property Terms, Explained Plainly

Property comes with its own language. Here's what the common terms actually mean, in plain English, no jargon required.

Loans & Finance

LVR (Loan-to-Value Ratio): How much you're borrowing compared to the property's value, shown as a percentage. Borrow $640,000 on an $800,000 property and your LVR is 80%. The lower your LVR, the less risk for the bank — and usually, the better your rate.
LMI (Lenders' Mortgage Insurance): A one-off cost you pay if you borrow above 80% of a property's value. It protects the bank if you default, not you. Many lenders waive it for medical professionals, even above 80%.
Deposit: The portion of the purchase price you contribute yourself, not borrowed. Usually a minimum of 10%, though this varies by lender and LVR.
Progress Payments: Instalments paid to a builder at set stages of construction — slab, frame, lock-up, fit-out, completion — rather than one lump sum at the end. Common with new builds and house-and-land packages. Your loan is drawn down in stages to match.
Principal and Interest (P&I): A loan where every repayment reduces both what you owe and the interest charged. The standard structure for a home loan.
Interest-Only: A loan where repayments cover only the interest, not the loan balance. Common for investment loans — the balance doesn't reduce, but your monthly cash flow is lower.
Offset Account: A savings or transaction account linked to your home loan. The balance in it reduces the amount you pay interest on, without locking your money away.
Redraw: The ability to withdraw extra repayments you've already made on your loan. Different from an offset account — some lenders charge fees or delay access.
Serviceability: The bank's assessment of whether you can afford a loan, based on your income, expenses, other debts, and their own lending buffers. Passing serviceability isn't the same as being comfortable with the repayments.
Cross-Collateralisation: When more than one property secures the same loan, or one loan is linked to multiple properties. It can complicate selling or refinancing later. Most brokers recommend standalone loans instead.
Standalone Loan: A loan secured only against the one property it's for, with its own account and contract. The opposite of cross-collateralisation.
Conditional Pre-Approval: An early indication from a lender of what you might be able to borrow, based on information you've supplied but not yet verified. Useful for planning, not for making an offer.
Full (Unconditional) Pre-Approval: The lender has verified your financials and confirmed what they'll lend. This is what lets you make an unconditional offer and move quickly when the right property comes up.
Fixed Rate: An interest rate locked in for a set period, usually one to five years. Repayments stay the same regardless of what the market does.
Variable Rate: An interest rate that moves with the market. Repayments can rise or fall over the life of the loan.
Family Guarantee (Guarantor Loan): A loan where a parent or family member uses equity in their own property as extra security, helping a buyer avoid saving a full deposit or paying LMI.
Borrowing Capacity: The maximum a lender is willing to lend you, based on your income, expenses, debts and their own assessment criteria. It varies significantly between lenders.
Valuation: A lender's own assessment of what a property is worth, used to decide how much they'll lend against it. Can differ from what you've agreed to pay.

Tax & Depreciation

Negative Gearing: When a property costs more to hold than it earns in rent. The shortfall may be deductible against your other income, depending on the property type and purchase date.
Positive Gearing (Positive Cash Flow): When a property earns more than it costs to hold, after all expenses and tax benefits.
Quarantined Losses: Rental losses that can only be offset against other rental income or future capital gains, not your salary or wages. Applies to established properties purchased after the 2026 Budget changes.
Capital Gains Tax (CGT): Tax paid on the profit made when you sell an investment property.
50% CGT Discount: A reduction that halves the taxable portion of a capital gain, for assets held over 12 months. Preserved for new builds bought as the original owner; replaced for established properties bought after Budget night 2026.
Cost-Base Indexation: The replacement system for established properties bought after Budget night 2026, adjusting the original purchase price for inflation before calculating tax owed, alongside a minimum 30% tax rate.
Depreciation: A tax deduction for the wear and tear on a building and its fixtures over time. Reduces your taxable income without costing you anything out of pocket.
Capital Works Deduction: Depreciation claimed on the structure of a building — walls, roof, built-in fixtures — usually at 2.5% a year for 40 years.
Plant and Equipment Depreciation: Depreciation claimed on removable items within a property — carpets, blinds, appliances, hot water systems — each with its own effective life.
Depreciation Schedule: A report prepared by a quantity surveyor listing everything you can depreciate in a property and over what timeframe. Your accountant uses it at tax time.
Quantity Surveyor: A qualified professional who prepares depreciation schedules and assesses construction costs.
Tax Withholding Variation: An application to the ATO that lets your expected tax refund show up in your regular pay throughout the year, instead of arriving as a lump sum after you lodge your return.
Stamp Duty (Transfer Duty): A state government tax paid when you buy property, calculated as a percentage of the purchase price on a sliding scale. Rates and first-home buyer concessions vary by state.
Land Tax: An annual state government tax on the value of land you own, generally applying to investment properties above a threshold. Rules and thresholds vary by state.

The Buying Process

Contract of Sale: The legal document setting out the terms of the property purchase.
Exchange of Contracts: The point at which both buyer and seller sign the contract and it becomes legally binding.
Cooling-Off Period: A set number of days after exchange during which a buyer can withdraw, usually with a small penalty. Doesn't apply to auction purchases in most states.
Settlement: The day ownership officially transfers from seller to buyer, and the remaining purchase price is paid.
Settlement Period: The agreed time between exchange of contracts and settlement, commonly 30 to 90 days.
Vendor: The person or entity selling the property.
Building and Pest Inspection: A professional assessment of a property's structural condition and any pest activity, done before you commit to buying.
Underquoting: When a property is advertised below what the agent genuinely expects it to sell for, to attract more interest. Illegal in most states but still common — always research comparable sales yourself.
Auction Pass-In: When a property doesn't reach its reserve price at auction and isn't sold on the day. It's then usually negotiated privately with the highest bidder.
Reserve Price: The minimum price a vendor will accept at auction, known to the agent but not always disclosed to buyers.
Comparable Sales (“Comps”): Recently sold properties similar in size, condition and location, used to estimate a property's realistic value.
Off-the-Plan: Buying a property before it's built, based on plans and specifications. Comes with its own risks around delays and final quality matching what was promised.
Sunset Clause: A clause in an off-the-plan contract allowing either party to walk away if construction isn't completed by a set date.

Property & Legal Terms

Established Property: A property that has previously been owned or occupied, as opposed to a new build.
New Build (Original Owner): A newly constructed property purchased as the first owner. Since the 2026 Budget changes, this status determines which tax rules apply.
Homeowner-Quality Property: A property genuinely appealing to owner-occupiers, not just investors — the standard that protects your resale value.
Title: The legal document proving ownership of a property.
Zoning: Council rules determining what a piece of land can be used for and what can legally be built on it.
Easement: A legal right for someone else — often a utility provider — to access or use part of your land for a specific purpose, even though you own it.
Body Corporate / Owners Corporation: The legal entity responsible for managing shared areas and facilities in a strata-titled property, funded by fees paid by all owners.
Strata Title: A form of ownership where you own your individual unit or lot, and share ownership of common areas with other owners in the same complex.

Property Management & Rental Terms

Rent Roll: The list of properties a property management business manages, which has real financial value and can be bought and sold as a business asset.
Vacancy Rate: The percentage of rental properties in an area that are currently unoccupied. A useful gauge of how easy or hard a property is to lease.
Rental Appraisal: An estimate from a property manager or agent of what rent a property could achieve.
Lease / Tenancy Agreement: The legal contract between landlord and tenant setting out the terms of the rental.
Property Management Fee: The percentage of rent paid to an agent for managing the property on your behalf, typically around 5–8%.

Investment Strategy Terms

Equity: The gap between what your property is worth and what you owe on it.
Usable Equity: The portion of your equity you can actually access, generally up to 80% of the property's value minus what you still owe.
Leverage: Using borrowed money to control an asset worth more than the cash you put in.
Capital Growth: The increase in a property's value over time.
Rental Yield: Annual rent as a percentage of the property's value. Rarely the number that matters most — cash flow does.
Buffer: Accessible funds — equity, savings, or a redraw facility — kept in reserve to cover unexpected costs or income disruption.
Rentvesting: Renting where you want to live while buying an investment property somewhere you can actually afford.
Mortgage Gone Strategy: Using one investment property, held for a set period, to accelerate paying off your home loan.