Buying off the plan guide
By Ali Hasani, Founder and Principal Mortgage Broker at Buyvest, MFAA accredited. Last updated July 2026. Off the plan rules described here are NSW specific.
This guide covers what off the plan involves, where the risks actually sit, how NSW treats stamp duty on these purchases, and why finance works back to front compared with every other purchase method.
The short version: Settlement runs 12 to 24 months from contract and follows the occupation certificate rather than a fixed date. Around 10% goes down at contract, with the loan applied for near completion. NSW defers transfer duty for eligible owner occupiers rather than discounting it. The bank valuation happens after the contract is binding, so a soft market at settlement becomes the buyer's cash problem.
What does buying off the plan mean?
Buying off the plan means signing a contract for a property that does not exist yet, based on plans, renders and a schedule of finishes. Settlement happens once the lot is created and the occupation certificate issued, commonly 12 to 24 months later.
The contract is signed against drawings rather than a building. A floor plan, artist renders, a schedule of finishes and draft documents describe what will be delivered, and the price is fixed at that point. Most off the plan stock is apartments and townhouses in new developments.
Settlement is not a date in the diary. It follows registration of the plan and issue of the occupation certificate, which is why timelines move. The other purchase methods work differently. Private treaty and auction both settle around 42 days from exchange, against 12 to 24 months here.
What are the advantages of buying off the plan?
Off the plan locks in a price today for a property delivered later, gives a long runway to keep saving, and opens the NSW First Home Owner Grant, which applies to new homes only. Buyers can also choose finishes and fixtures.
Price certainty is the main one. The contract price is set at signing, so a rising market between contract and completion works in the buyer's favour. The long lead time is also a saving window, which is where the First Home Super Saver scheme fits.
The NSW First Home Owner Grant of $10,000 applies to new homes only, up to $600,000 for a completed new home or $750,000 for land and building contract combined, so off the plan is one of the few routes to it. Buyers also get a new building with no deferred maintenance, builder warranties, current energy standards, and some say over finishes and fixtures.
What are the risks of buying off the plan?
The risks concentrate at settlement rather than at contract. Construction delays, developer insolvency, changes to specifications and a softer market all land at the same point, when the property is valued and the loan has to be approved.
The market can move down as easily as up over 12 to 24 months, and the buyer carries that either way. Construction runs late for reasons outside anyone's control, and a stalled or insolvent developer can leave a project unfinished. Specifications can change between the render and the finished lot.
Nothing can be inspected before signing, so build quality is unknown until handover. And a buyer's own position can change across two years: income, employment, existing debts, or lending policy itself. The benefits and risks of low deposit buying compound here, because a thin deposit leaves less room to absorb any of it.
Why does the bank valuation happen at settlement?
A lender values what exists, and at contract there is nothing to value. The bank valuation on an off the plan purchase happens once the building is finished, which can be two years after the price was agreed and the market has moved.
This is the mechanic that separates off the plan from every other purchase. In an established purchase the bank valuation happens before the loan is approved and before the buyer is committed. Off the plan reverses it. The contract binds at signing, and the valuation is ordered once there is a finished property to inspect.
If the valuation comes in below the contract price, the lender advances against the lower figure. The difference is cash, due at settlement, on top of the deposit already paid. A softer market, an oversupplied precinct, or a specification change can all produce that outcome, and none of them are visible when the contract is signed.
The second effect is on LVR. A purchase structured for a 20% deposit against the contract price can land above 80% against the valuation, bringing lenders mortgage insurance into a deal that was built to avoid it.
The sequence: every other purchase gets valued before the buyer is committed. Off the plan gets valued after. That single reversal is where most off the plan settlement problems come from.
Settling on an off the plan purchase?
We compare 35+ lenders and structure finance around the settlement valuation, not the contract date. $0 cost to you.
How does stamp duty work on an off the plan purchase in NSW?
NSW defers transfer duty on an off the plan purchase for eligible owner occupiers, up to 12 months. Deferral is not a discount, and the full amount is still payable. Any actual reduction comes from the First Home Buyers Assistance Scheme instead.
This is where off the plan is often described inaccurately. NSW allows eligible owner occupiers to defer transfer duty on an off the plan purchase for up to 12 months from the contract date. Deferral moves when the duty is paid. It does not reduce it. The full amount still falls due.
Any actual reduction comes from a separate scheme. The First Home Buyers Assistance Scheme removes duty entirely up to $800,000 and tapers a concession to $999,999, based on the price rather than on whether the property was bought off the plan. An eligible first home buyer under that threshold pays no duty either way, and the deferral is irrelevant to them.
Duty and tax outcomes turn on personal circumstances, so a conversation with your accountant or financial adviser is worthwhile. Our NSW stamp duty guide covers the thresholds in full.
How do you finance an off the plan purchase?
A deposit of around 10% goes down at contract, and the loan itself is applied for near completion. Pre-approval taken at contract will have expired long before settlement, so the lender reassesses income, debts and credit at the end.
The deposit and the loan are separated by years. Around 10% goes down at contract, and the loan application itself happens near completion, because no lender will issue a formal approval on a property that does not exist. Pre-approval taken at contract lasts around three months, so it will be long expired.
That means the assessment that matters is the one at the end. Income, employment, existing debts, credit conduct and lending policy are all re-examined, and all of them can move across two years. New debt taken on during construction, a change of employer, or a shift in serviceability settings can each change the outcome.
The Australian Government 5% Deposit Scheme and Help to Buy can both apply to off the plan purchases, but eligibility is tested against the position at settlement rather than at contract, and the scheme price caps apply to the contract price. Model the numbers with our property deposit calculator.
What does an off the plan contract cover?
An off the plan contract sets the specifications, the permitted variations, the definition of completion and the sunset date. In NSW a vendor cannot simply rescind once the sunset date passes, because the right to do so is restricted by statute.
The contract does the work a building inspection would do on an established property. It defines the specifications and finishes, the variations the developer is permitted to make, what counts as completion, how defects are handled, and the sunset date by which the lot must be created.
The sunset clause is commonly misunderstood as a two-way exit. In NSW it is not. Under section 66ZS of the Conveyancing Act 1919, a vendor may only rescind under a sunset clause where each purchaser consents in writing, or where the Supreme Court makes an order permitting it, and the Court will only do so where rescission is just and equitable in all the circumstances. Nothing in that section limits the purchaser's own rights under the clause. The restriction runs one way.
NSW off the plan contracts also carry a 10 business day cooling off period rather than the usual five. How cooling off works generally, including the 0.25% forfeiture and waiver by certificate, is covered in our private treaty guide.
Frequently asked questions
How long does an off the plan purchase take?
Commonly 12 to 24 months from contract to settlement, though it depends on the project. Settlement is not a fixed date. It follows registration of the plan and issue of the occupation certificate, so the timing moves with construction rather than a calendar.
What happens if the valuation is lower than the purchase price?
The lender advances against the lower figure, leaving a gap the buyer covers in cash at settlement. A lower valuation can also push the LVR above 80% and bring lenders mortgage insurance into a purchase that was structured to avoid it.
Do you pay less stamp duty buying off the plan in NSW?
No. NSW allows eligible owner occupiers to defer transfer duty for up to 12 months, but the full amount is still payable. Reductions for first home buyers come from the First Home Buyers Assistance Scheme, which applies on price and works independently of the deferral.
Is there a cooling off period when buying off the plan?
Yes. NSW gives off the plan buyers 10 business days rather than the usual five, with the same 0.25% forfeiture if the buyer withdraws. It can be waived or shortened by certificate, and the general cooling off rules are covered separately.
What happens if the developer becomes insolvent?
The project may stall, be taken over by another developer, or not proceed. Contract terms determine whether the purchase remains on foot or can be ended. Deposit protection arrangements vary, which is why the contract terms around the deposit matter.
Can you sell an off the plan contract before completion?
Sometimes. Assignment depends on whether the contract permits it, and most require the developer's consent and charge a fee. Tax treatment of an assignment varies with circumstances.
What happens if construction runs past the sunset date?
In NSW a vendor cannot rescind under a sunset clause on their own. Section 66ZS of the Conveyancing Act 1919 requires either the written consent of each purchaser or an order of the Supreme Court. The purchaser's own rights under the clause are not restricted in the same way.
Take the next step
The decision that matters on an off the plan purchase is made at contract, but the outcome is decided at settlement two years later. What happens when a valuation lands short is covered separately, and our LVR guide covers the thresholds it can move you across, and our property type guide compares off the plan against established stock. Model the numbers with our home equity calculator and mortgage repayment calculator.
Buying off the plan?
We compare 35+ lenders and plan for the settlement assessment, not just the one today. $0 cost to you.
Email: hello@buyvest.com.au
Related resources for first home buyers
Private treaty sales | Buying at auction | Bank valuations | Settlement guide | NSW stamp duty | Strata title | First home buyers journey
Service areas: 220+ suburbs across Sydney including Ryde | Parramatta | Baulkham Hills | Gladesville | Penrith | Chatswood | Castle Hill | Epping | Hornsby | Blacktown | Bankstown | Hurstville | Sutherland | Manly | Bondi | Sydney CBD and more
This article is general information only and does not take your personal circumstances into account. Off the plan contract terms, sunset clauses, cooling off rights and duty deferral described here are specific to New South Wales and are set by the Conveyancing Act 1919 (NSW) and Revenue NSW. Rules differ in other states, developer terms vary between projects, and lender policies and valuation outcomes change over time. Figures were verified in July 2026 against NSW Government guidance on buying off the plan, section 66ZS of the Conveyancing Act 1919, and Revenue NSW First Home Buyers Assistance Scheme and First Home Owner Grant thresholds. Confirm your position with a licensed conveyancer, solicitor, broker or lender before relying on it. Ali Hasani is an Authorised Credit Representative (CRN 567392) of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).
Secure your future home with confidence - plan today, move in tomorrow.
Off the plan lets you buy your home before it's even built.
Important stuff:
Please note that the views and opinions expressed in this post are general information only, and this is not financial advice.
Any advice and information is provided by Buyvest Pty Ltd is general in nature, for educational purposes only and is not intended to constitute specialist or personal advice. This website has been prepared without considering your objectives, financial situation or needs. Therefore, consider the appropriateness of the advice for your situation and needs before taking any action. It should not be relied upon to enter into any legal or financial commitments. Specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy. If any financial product has been mentioned, you should obtain and read a copy of the relevant Product Disclosure Statement and consider the information contained within that Statement concerning your circumstances before deciding whether to acquire the product. You can obtain a copy of the PDS by emailing hello@buyvest.com.au. If you want to change your financial circumstances, such as applying for a loan, all loan applications are subject to credit approval.
All information on this website is subject to change without notice.