What is a bill of sale?

The seller and buyer sign a document that describes the goods precisely, states the price and how it is paid, and says when title and risk pass, for example on full payment or on delivery. Most private sales include an "as-is" clause, meaning the seller gives no warranties beyond those written down. A witness is not usually required, but an independent adult witness is sensible for high-value goods.

The bill also carries an encumbrances statement: the seller confirms whether any lien or registered security interest affects the goods. Buyers back this up with a PPSR search by VIN or serial number and record the search reference in the document. If a financing statement shows up, the sale waits until the seller produces written evidence that the interest has been discharged.

The term has an older meaning: under the state Bills of Sale Acts it gave a lender security over goods. Those registrations moved to the PPSR in 2012, and the security is now a chattel mortgage or general security agreement.

Any transfer of tangible personal property can use one: a private used car or motorbike sale, a boat or trailer, plant and machinery sold with serial numbers and service history, or an instalment sale where a deposit is paid and the balance follows. Land is real property and needs different documents.

It is not the same as a registration transfer form, a plain receipt or a full contract of sale. The registry form changes the record held by the road authority; a receipt usually lacks the representations (such as "no encumbrances") that a bill of sale includes; and a contract of sale can be broader, covering warranties and delivery terms. A seller who accepts instalments can register a PPSR financing statement to keep security over the goods until they are paid for.

For a vehicle, boat or trailer the seller completes the state or territory transport authority's transfer form within its notification period, hands over the registration papers and any roadworthy certificate, and tells their insurer. The buyer insures the goods from the moment risk passes.

Private sellers generally do not charge GST on personal items. A business that is registered for GST and selling a business asset may have to charge GST and issue a proper invoice, so the bill records whether the price is GST inclusive or exclusive. Selling a depreciating business asset creates a balancing adjustment, assessable income or a deduction rather than a capital gain, and cars and motorcycles are exempt from capital gains tax, so check the disposal's tax treatment with your accountant or the ATO. Both parties keep the signed bill, the PPSR search result, photos and payment receipts for at least five years, and a business records the disposal in its accounting system and asset register.