Off-the-plan purchases: what to look for

Buying off-the-plan means committing to a property that hasn't been built yet. You sign a contract today, pay a deposit, wait one to three years for construction, and settle when it's complete. Where it fits in the wider process is covered in our start-to-settlement guide.

It can be a great way to buy if you're patient and the project goes well, and a costly one if you don't check the details. Here's what to look for.

Why people buy off-the-plan

• Stamp duty savings. Eligible buyers get a stamp duty concession, with duty calculated on the land value at contract rather than the finished value. On a $700,000 apartment that can be tens of thousands.
• A lower deposit, longer to save. You pay only the deposit (usually 10%) at signing; the balance isn't due until settlement, often two or three years away.
• A genuinely new home, fresh, under warranty, and built to current standards.
• Possible growth before settlement, if values rise between contract and completion. The reverse is also possible.

The risks

• The developer might not finish. Projects stall, are abandoned, or go bankrupt. If the developer collapses you may recover your deposit (if it's in a properly structured trust) or lose it.
• What you get may differ from what you saw. Renders and a sample fitout can end up different in room sizes, ceiling heights, finishes, views, and light.
• The valuation can come in low. If it doesn't value at the contract price on completion, your bank may lend less and you cover the shortfall.
• Defects on completion, from paint touch-ups to structural or waterproofing issues. The developer is usually responsible, but extracting the work can be slow.
• The timeline can stretch, turning "18 months" into 30. Your savings and finance need to survive that.
• Owners corporation fees can rise. The developer's quoted owners corporation fees are estimates; the first AGM often lands higher.

Reading the contract

Off-the-plan contracts are longer and more complex than standard ones. The parts that matter most:

• The plan of subdivision. Confirm your unit matches the floor plan, and that car park and storage allocations are clearly tied to your title with defined boundaries.
• The specifications. "Quality fittings throughout" means nothing; "Miele dishwasher, Caesarstone benchtop, 2400mm ceilings" is concrete. Read the detail.
• The sunset clause. The deadline by which the property must be complete; if it isn't, the contract can be rescinded. Check the date (your conveyancer can say whether it's typical), who can use it (some contracts let only the developer walk away), and the notice required. Victorian changes to the Sale of Land Act restrict developers from rescinding under a sunset clause without the purchaser's consent or Supreme Court approval, but the protection isn't absolute.
• Variations and substitutions. Contracts usually let the developer change finishes "of a similar quality." Look for limits, a right to object to major changes, and compensation if value drops.
• Deposit structure. Ideally held in trust, with interest to you, clear refund conditions, and no early release to the developer (a higher-risk arrangement).
• Settlement trigger. Practical completion, occupancy certificate, or notice from the developer. Vague triggers favour the developer.
• Defects and rectification. A pre-settlement inspection period, a process for raising defects, the developer's duty to fix, and warranty periods.

Checking the developer and builder

• Track record. What have they built? Visit completed projects, talk to owners, read reviews. An established portfolio is a different proposition to a first-timer.
• Financial position. ASIC searches on the developing entity, whether it's part of a group with assets or a single-project shell, and the principals' history. A $2 shell company carries far more risk.
• Project funding. Pre-sales usually need to hit a target before the bank releases construction funding. Signs of health: financing in place, solid pre-sales, and a reputable builder on a fixed-price contract.
• The builder. The builder does the construction, not the developer. Check they're named in the contract, registered, with a clean record.

Then visit the site if you can. Construction underway and on schedule is reassuring; a site "starting next month" for six months is a warning sign. For larger projects, ask for the construction program.

At and after settlement

When it's complete you get a pre-settlement inspection, usually before settlement. Bring the contract and specifications, check every fixture and finish against them, test the appliances, and submit a formal defects list. Defects raised before settlement are typically fixed first; those raised after go into the slower warranty process (building warranty insurance generally covers major defects for six years, minor for two). You don't have to accept defects, and can decline to settle until they're addressed within the contract terms, with your conveyancer's help.

Common regrets, and a simple test

The patterns from buyers who wish they'd been more careful: trusting renders over reality, underestimating delays, buying purely on the stamp duty saving, not investigating the developer, and signing a one-sided sunset clause.

So before you sign: have your conveyancer review the contract and flag the sunset clause and variation terms; have your broker model settlement at higher rates, a lower valuation, and a delayed timeline; walk the developer's finished projects; and sit with the decision for a few days. "Sign tonight" is a sales tactic, not a deadline.

Sources

• State Revenue Office Victoria: Off-the-plan duty concession: how duty on an eligible off-the-plan purchase is assessed on the land value at contract.
• Sale of Land Act 1962 (Vic): the vendor-disclosure requirements and the sunset-clause rescission protections for off-the-plan buyers.
• Consumer Affairs Victoria: Buying and selling property: the regulator's guidance on buying, deposits, and domestic building warranty.

Sources verified 25 July 2026. Concession eligibility and warranty terms change and are fact-specific.