Off The Plan
Buying & Selling
Purchasing a property before it is built, based on architectural plans and developer specifications.
Full Explanation
Buying off the plan means you sign a contract and pay a deposit (usually 10%) for a property that hasn't been constructed yet. Settlement occurs when the building is complete (often 1-3 years later). Benefits include potential stamp duty savings (some states offer concessions), time to save, and the ability to choose finishes. Risks include market value changes by settlement, developer delays or insolvency, and the final product differing from expectations.
Example
You pay a $50,000 deposit (10%) on a $500,000 apartment. The building takes 2 years to complete, during which the market drops 8% — at settlement your property is worth $460,000 but you owe $500,000.
Frequently Asked Questions
Are off-the-plan properties good investments?
They can be — you get maximum depreciation deductions (brand new = full Division 40 + 43 claims), potential stamp duty savings, and modern specifications. However, risks include overpaying (developer margins), settlement risk, and lack of rental history to verify yield assumptions.