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The commercial shape of a caveat loan is the same across Australia. What changes by state is the land law underneath it: which register, which Act, and what an owner can do to challenge the caveat. In NSW the rules are well settled and the market is the deepest in the country.
The register and the Act
NSW land under the Torrens system is recorded by NSW Land Registry Services. Caveats are governed by Part 7A of the Real Property Act 1900. A person claiming an estate or interest in the land may lodge a caveat, which stops the Registrar registering most dealings without the caveator’s consent. For a lender, the interest is the equitable charge or unregistered mortgage in the loan agreement. See what is in a caveat loan agreement.
Lodgement is electronic, through PEXA or Sympli, and the caveat normally appears on a title search the same or the next business day.
How long it lasts
A NSW caveat does not expire automatically. It remains until the lender withdraws it, a court orders its removal, or it lapses. The owner can ask the Registrar to issue a lapsing notice. Once served, the caveator has 21 days to obtain and lodge an order of the Supreme Court extending the caveat, or it lapses. A lender with a valid charge will get that order, so for a genuine loan the lapsing process is not a way out of the debt. It is a protection against caveats that have no basis.
Caveat or second mortgage in NSW
Since October 2021, NSW LRS has not required the first mortgagee’s consent to register a second mortgage. That removed a procedural obstacle, but most bank mortgages still prohibit further security without consent, so lenders generally still ask. Where time allows, a registered second mortgage gives stronger security and a lower rate. Where the deadline is days away, a caveat is the faster instrument. See second mortgage business loans in NSW.
Costs and duty
NSW abolished mortgage duty in 2016, so there is no duty on the loan or the security. A registry lodgement fee applies to the caveat and later to the withdrawal, and both are adjusted each July.
Local factors
Strata and company title properties, common in Sydney, each have quirks: a caveat can be lodged on a strata lot title in the ordinary way, while company title relies on shares, not a Torrens title, and needs a different security. Sydney market context for valuation and saleability is on the Sydney page. This is general information, not legal advice.
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How long does a caveat last in NSW?
Indefinitely, until withdrawn, removed by court order or lapsed. A registered owner can apply for a lapsing notice, after which the caveator has 21 days to obtain a Supreme Court order extending it.
Do I need my bank's consent for a second mortgage in NSW?
Since October 2021 the registry no longer requires the first mortgagee's consent to register a second mortgage. Most bank mortgages still require it contractually, so it is usually sought anyway.
Is there stamp duty on a caveat loan in NSW?
No. Mortgage duty was abolished in NSW in 2016. A lodgement fee applies for the caveat and again for its withdrawal.