Buying a property
Off the Plan

What is 'Off The Plan'?

Buying off The plan has been particularly popular in recent years for investors and home buyers. Buying off the plan means you are essentially entering into a contract to buy a property (whether it is a house, townhouse, or apartment) today at a set price, that has not been built yet and will be completed years in the future.

What are the benefits of buying off the plan?

Buying off the plan may be beneficial in a rising property market, as you are buying a property at today’s property prices, which once completed, may be worth a lot more in the future. You may have only needed to provide a 5% or 10% deposit to exchange on the property (and in certain cases, the amount you are actually contributing may be smaller, if you are providing a bank guarantee or deposit bond) and stand to make a considerable gain if the property has gone up at completion.

For example, Megan exchanges on a contract in 2016 to purchase an apartment for $1 Million dollars and only pays $2,500 for the deposit (by way of a deposit bond). This allows Megan to work and save more money to pay for ......


Are there any risks of buying off the plan?

There are however a number of risks in buying off the plan which you should be aware of, including:

  • If the interest rate or your borrowing capacity changes from when you sign the contract to settlement – this could result in you not having the funds to complete the purchase.
  • If the size, location, appearance of your apartment changes from the marketing material to the actual finished product.
  • If the market falls and on completion your apartment is worth a lot less than what you paid for it.There could be long delays to the construction and completion of your apartment.
  • The apartment might never be built, if the builder or developer becomes bankrupt or cannot obtain financing to complete the project.

How do I understand Sunset clauses?

A sunset date is a specified date in the future which may be anywhere between 12 to 36 months depending on the length and complexity of the development. If your property has not been built by the sunset date, you will have the right to rescind and cancel the contract without penalty to either party. Your deposit will also be returned to you if you choose to exercise your rescission rights.

Sunset Clauses
Stamp Duty

Stamp duty on off the plan transactions?

If you intend to live in the off the plan property as your principal place of residence, then stamp duty may be deferred to 12 months from the date of the contract. If, however, the off-the plan purchase is an investment property, then stamp duty is payable within 3 months of Exchange.

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