29 Oct 2026 * 8 minute read

Are you keen to buy a brand-new home or investment property? Buying off the plan is a popular option. Purchasing before construction means you’ll have access to the very latest designs. Plus, it could offer potential financial advantages too, such as stamp duty exemptions and concessions in some states.

However, buying off the plan is very different from purchasing an established property. Instead of being able to inspect a finished home, you'll be relying on technical plans, artist impressions, and your trust in the developer. You’ll also be exposing yourself to potential construction delays, market fluctuations, and finance challenges.

This practical guide helps you understand how buying off the plan works in Australia, the potential benefits and risks, and the key steps to take before and after settlement. It also covers what typical off-the-plan contracts contain, and what to look out for before signing one.

Topics covered:

• What is buying off the plan?
• Potential benefits of buying off the plan
• Potential risks of buying off the plan
• Some of the jargon you might come across
• Financing your off-the-plan purchase
• What typical off-the-plan sales contracts contain
• Researching off-the-plan proposals and developers
• General off-the-plan developer obligations
• Actions to take pre-settlement and post-settlement
• Is buying off the plan right for you?

Key take outs

• Buying off the plan means purchasing a property that is not yet built or is still under construction.
• Benefits may include lower upfront costs plus potential capital growth, but risks have to be factored-in too.
• Off-the-plan contracts differ from standard property contracts and should be reviewed by a solicitor or conveyancer.
• Careful research into the developer and project could help you avoid costly surprises.

What is buying off the plan?

Buying off the plan is the term used when you purchase a property that hasn’t been built yet. You’ll be basing your decisions on architectural floor plans, specifications, computer-generated images, marketing brochures and in some cases, display suites.
The most common off-the-plan developments are apartment blocks, townhouses and land estates, though some detached homes are also sold this way.

Once you’ve accepted a price and signed a contract, you'll generally pay a deposit. The balance is then due once construction and inspection has been completed and all the required approvals have been received.
It can take anywhere from 12 to 18 months or longer to move into or access an off-the-plan property.

Potential benefits of buying off the plan

There are several potential advantages of buying off the plan. These are some of the benefits:

• You get a brand-new property
  New homes generally require less maintenance, feature modern appliances, and often meet higher energy-efficiency standards. Plus, you may be able to negotiate design changes before building starts.
• Potential capital growth
  If property values increase during the construction period, your new home could be worth more than you agreed to pay for it by the time you move in.
• Lower upfront financial commitment
  You’ll have time to save before settlement – or build equity in your current home – as construction can take months, or even years.
• Stamp duty concessions
  Some Australian states and territories offer stamp duty concessions or reductions for eligible off-the-plan purchases. The rules vary depending on where your property is located and whether you're buying as an owner-occupier or investor. Search ‘stamp duty concessions in (your state or territory)’ to find out what’s available.
• Builder warranties
  New properties are generally covered by statutory building warranties, providing protection if certain construction defects arise.

Potential risks of buying off the plan

The prospect of a shiny new home or investment can be tantalising. But it’s important to be aware of the risks involved in buying off the plan. Here are some risks to consider:

• Falling property values
  You can’t guarantee a rising market. If the market falls between deposit and settlement, your new property may be worth less than the purchase price agreed on the contract date.
• Construction delays
  Large developments often experience delays due to adverse weather, labour shortages, supply chain issues, or planning approvals – which may mean you have to pay for temporary accommodation.
• Design changes
  You may need to accommodate the reasonable changes to layouts, finishes or materials referred to in the contract you signed.
• Issues with finance
  Your lender will assess your financial position when pre-approving a loan. However, if at settlement, your financial circumstances have changed, or interest rates have risen, or your property is re-valued lower, your borrowing capacity could be affected.
• Developer insolvency
  Financial difficulties experienced by your developer could significantly delay or prevent completion of your property and your deposit might be tied up in legal proceedings.
• Construction defects
  It’s not that uncommon for newly built homes to have defects ranging from minor cosmetic issues to more significant structural problems. Plus, quality discrepancies can occur between what is marketed and the finished product.

Some of the jargon you might come across

As with all industries, the building development industry has its fair share of terminology. Here’s a brief guide to some of the terms you may encounter.

• Deposit. This will generally range from 5% to 10% of the purchase price to be paid when contracts are exchanged, and it should be securely held in a trust or controlled account. An alternative to a cash deposit might be a bank guarantee.
• Settlement. This is the date that the balance of the purchase price is paid and the ownership transfers from the developer to you.
• Sunset clause. This is the part of the contract that allows either you as the buyer, or the developer, to terminate the contract if construction isn't completed by a specified date.
• Practical completion. This is the term used when construction is substantially finished, although minor defects may still need to be rectified.
• Defects liability period. This is the period after settlement during which the developer must fix eligible building defects you identify during inspection.
• Owners corporation. This is the organisation responsible for managing common areas in apartment and townhouse developments under a strata model.
• Variation clause. This is a clause inserted into contracts that allows certain changes to be made to the property's design, layout or finishes.

It’s well worth getting a sound understanding of this language so that you’re completely comfortable with your rights and obligations.

Financing your off-the-plan purchase

When you buy an existing property, you’ll likely settle several weeks after receiving pre-approval for a home loan.

It’s different with off-the-plan purchases as settlement will take place many months or years after your lender has pre-approved your loan – during which time your financial circumstances and other factors may have changed.

Securing pre-approval can give you confidence when house hunting, but it does not guarantee your loan will be approved unconditionally. Your lender or mortgage broker may reassess factors such as these:

• Your income and employment status.
• Current debts.
• Living expenses.
• Credit history.
• The current market value of the new property (its resale value).

If property prices have fallen and your property’s worth less than the agreed purchase price, you may need to contribute additional funds to complete the purchase.

When putting your off-the-plan purchase budget together, make sure you include other costs too, such as these:

• Loan establishment costs
• Possible need to pay stamp duty
• Conveyancing and any other professional fees
• Moving expenses
• Ongoing costs such as strata fees
• Council rates
• Utilities and services.

What typical off-the-plan sales contracts contain

Off-the-plan purchase contracts tend to be more complex than standard residential contracts. They’ll generally cover elements such as:

• Estimated completion date
• Sunset clause (see more information above)
• Possible variations in design as construction progresses.
• Adjustments to lot boundaries
• Alterations to common property
• How settlement works
• Detailed inclusions and finishes

Settlement on your property will generally occur once:

• construction is complete
• necessary approvals are received
• separate property titles have been issued, and
• the developer serves a notice requiring settlement within the contractual timeframe

Unsurprisingly, off-the-plan purchase contracts tend to heavily favour developers – and some may allow the developer to change plans without buyer consent. Therefore, it’s recommended to have a solicitor or licensed conveyancer review your agreement before you sign it.

Researching off-the-plan proposals and developers

Any property purchase is a huge commitment, therefore ‘buyer beware’ research is essential. Consider questions such as:

• Have I researched and, if possible, viewed the developer's past projects?
• Were they completed on time?
• What was the quality of construction and finishes like?
• Does the builder have a good reputation?
• Are there any online reviews from previous purchasers?
• What strata levies are proposed?
• Does the surrounding area have good infrastructure, services and transport connections?
• Are any other developments planned that could impact my property's outlook or value?

General off-the-plan developer obligations

Property developers must comply with state and territory legislation, planning approvals and consumer protection laws. Exact requirements differ across Australia, but developers are generally responsible for the following:

• Building the property substantially in accordance with approved plans.
• Disclosing important information before contracts are signed.
• Meeting building standards and relevant codes.
• Obtaining occupation certificates or equivalent approvals before settlement.
• Providing statutory warranties where applicable.

As a buyer, you should carefully review disclosure statements (which have been compulsory since July 2021) and seek independent legal advice if necessary.

Actions to take pre-settlement and post-settlement

Now it’s getting exciting! At last settlement approaches and you’ll want the process to be as smooth as possible. Here are some actions you may wish to consider before settlement:

• Finalise your home loan or investment property loan.
• Arrange building and contents insurance if required.
• Carry out a pre-settlement inspection.
• Check that all the fixtures, fittings and finishes match the contract.
• Identify any defects requiring attention and advise the developer straight away.
• Confirm settlement arrangements with your solicitor or conveyancer.

If you're buying for investment, this is the time to check out the rental market to review current market rates.

Then, once you’ve taken ownership of the actual property:

• File copies of warranties and appliance manuals.
• Within required timeframes, notify the developer of any further defects identified.
• Attend all owners corporation meetings if buying an apartment or in an estate.
• Get an understanding of your maintenance responsibilities.
• Keep all correspondence relating to the purchase filed online and in hard copy if preferred.

Is buying off the plan right for you?

This guide is designed to provide information and insights required to make an informed decision about whether or not to buy off the plan.

If you’re happy to do the homework, have the finances in place, and love the idea of buying a modern home with lifestyle benefits and potential long-term capital growth, an off-the-plan purchase could be for you.