Buying off the plan means signing a contract for a lot that does not legally exist yet. Settlement can be years away, and the property, the market and your finances can all change before then. We review off-the-plan contracts for buyers and prepare and settle them for developers in six states.
What are you actually buying off the plan?
You are buying an unregistered lot shown on a draft plan of subdivision, strata or community plan. No title exists until the plan is registered, so settlement waits for registration and completion of the works.
The contract, plans, schedule of finishes and draft by-laws are all you can rely on, so the contract review matters more than usual. Our guide to buying off the plan covers the main considerations.
What is a sunset clause?
A sunset clause sets a date by which the plan must be registered. If it is not, either party may be able to end the contract and the deposit is refunded.
Because developers have used sunset clauses to end contracts and resell at higher prices, several states now limit them. In New South Wales and Victoria, a developer generally cannot rely on a sunset clause to end a residential off-the-plan contract without the buyer’s consent or a Supreme Court order. Queensland introduced similar limits for off-the-plan land contracts in 2023, though they do not cover community titles schemes such as apartments. Elsewhere, the contract wording matters more.
Can the developer change the plan or finishes?
Usually yes, within limits set by the contract and state law. Most contracts let the developer vary the plan, lot size and finishes, while state laws generally require notice of material changes and may let the buyer end the contract or claim compensation. We check how wide the variation clause is before you sign.
Is my deposit safe?
Off-the-plan deposits are generally held in a trust account and not released to the developer until settlement or another point the law allows. Some contracts accept a deposit bond or bank guarantee instead of cash.
What are the finance risks at settlement?
Your finance may look different on settlement day than when you signed. Pre-approval will usually have expired, so the lender reassesses your income, debts and current lending rules.
The lender also values the completed property. If the valuation is below the price, it may lend less and you fund the shortfall. Off-the-plan contracts are rarely subject to finance, so failing to settle can cost your deposit and more.
Plan for a valuation shortfall. Ask your broker before signing what buffer you would need if the property values below the price, and keep it available until settlement.
Are there duty concessions for off-the-plan purchases?
Possibly. Some states offer duty concessions for off-the-plan or new homes, often limited to first home buyers, owner occupiers or certain price ranges. These change regularly, so we check current eligibility with the state revenue office, such as the State Revenue Office (Victoria) or Revenue NSW.
For new residential property, the buyer usually also pays part of the price directly to the ATO for GST at settlement. We manage this through PEXA.
How do you deal with defects at completion?
Inspect before settlement, ideally with a building inspector, and give the developer a written defects list. The contract decides whether you can delay settlement over defects (usually only major ones) and how long the developer has to fix items. Statutory building warranties may cover later defects.
Do you act for developers and subdivisions?
Yes. We prepare off-the-plan contracts and disclosure documents for developers and builders, and settle multiple lots once the plan is registered. Shauna Grivell has handled settlements for a major subdivision development in Melbourne for a developer client. Our property law team also advises on subdivision and development, and on easements and covenants created by a new plan.
Common questions about buying off the plan
Can I get out of an off-the-plan contract?
Only in limited situations. A statutory cooling-off period may apply after signing, depending on the state. After that, you can usually end the contract only if the sunset date passes without registration, if the developer makes a material change that the law or contract lets you object to, or if the developer otherwise breaches the contract.
What happens if the property values below the contract price?
You are still bound to pay the full contract price. If your lender values the property lower, it may lend less than you expected and you must cover the difference from savings or other funds. If you cannot, you risk defaulting on the contract and losing your deposit, which is why a cash buffer matters.
Can the developer cancel my contract and resell for more?
In New South Wales and Victoria, a developer generally needs your consent or a Supreme Court order to end a residential off-the-plan contract under a sunset clause, and Queensland has similar limits for off-the-plan land. In other states, it depends on the contract wording, so the sunset clause should be reviewed before you sign.
How long does an off-the-plan settlement take?
It depends on when construction finishes and the plan is registered, which can take months or years. The contract usually requires settlement within a set number of days after the developer notifies you of registration, and the sunset date sets the outer limit. Keep your finance and buffer ready from the time you sign.