WOLLONGONG(02) 4221 9311
SHELLHARBOUR(02) 4295 8400


Buying off-the-plan is the term used to describe when you enter into a contract to acquire property prior to completion of construction of the dwelling and/or registration of the plan of subdivision.

As the property is not complete at the time that you enter into the contract and pay a deposit, there are further risks associated with purchasing off-the plan. Some of the key considerations are as follows:

Builder & Developer: Carry out your due diligence by researching the builder and developer’s reputation. If possible view some of their recent and older developments and talk to  other purchasers about their experience.

Price: Research the market and or obtain expert advice to make sure you are not over paying for the property. . Try not to be persuaded by or sold on the quality of appliances and finishes and rather give greater weight to factors such as location and size.

Finance: It may not be possible for you to obtain formal loan approval prior to entering into an unconditional contract to purchase an off-the plan property. However you will still be bound to purchase the property even if you cannot obtain finance. Your borrowing power and ability to obtain finance may be impacted by factors including:

  1. changes to your financial situation and employment
  2. banking lending criteria
  3. the property market and the value of the property on settlement.

Finishes: Be clear about what you are purchasing. Make sure there is a detailed list of finishes, fixtures and appliances. Ideally the list should be precise and include brands and model numbers, The advertising material cannot solely be relied upon so the contract must explicitly set out what you are expecting to be included.

Variations: Be conscious that what you are being presented with may vary on settlement. The contract will often allow the builder/developer to make changes to the plan of the property and/or the finishes of the unit. You may have a right to cancel the contract should the variation reach a certain threshold but the contract will need to be carefully reviewed to ensure that you are afforded the most protection possible.

Sunset date: The contract will provide a time limit by which the property must be completed and the subdivision registered, generally referred to as the sunset date. This means that there can be a considerable realm of uncertainty as to when you will actually become the owner of the property. If the development is not completed in this time (plus any extensions that the developer is permitted to make) then you can rescind the contract which entitles you to a return of the deposit.

Settlement: Settlement will usually take place 21 days following the date that the subdivision plan is registered and an occupation certificate is provided (in the event that a completed house or unit is being purchased). In the event that you are unable to settle in that time frame, penalties can be imposed such as interest charges and the vendor’s legal costs. If you are more than 14 days late your deposit may be forfeited and you may be exposed to further liability for any losses of the vendor beyond the deposit forfeited.

Stamp duty: Stamp duty is usually required to be paid within three months of the date of the contract. However, if you are purchasing off-the-plan and the property will be your principal place of residence then you may be entitled to receive an extension on the timeframe to make payment of the stamp duty for 15 months (or the settlement date whichever occurs earlier). This extension period is not available for investments or purchases of vacant land.

Defects: In most cases you will be provided with a period following settlement whereby you can notify the developer of defects that appear in the property and they will then have a reasonable period to rectify such defects. Be aware that for some properties Home Warranty Insurance is obtained which provides a statutory backed fund to insure the builder’s work. However, exemptions apply to owner builders and multi-storey developments so this fund may not be available as a fall back if defects do arise.

Purchasing an off-the-plan property can be complex but with experienced and sound advice, the process can be simplified and the most protection possible can be provided to you. Please contact our experienced and friendly conveyancing team if you have any questions in relation to purchasing an off-the-plan property.

This article was co-authored by Senior Associate, Jarrad Downs.


Image Credit – Microstock3D ©