Buying off the plan means signing a contract for a property that does not exist yet. You are committing hundreds of thousands of dollars based on a floor plan, a render, and a set of promises about what will be built and when.
That is not a reason to avoid it. Off the plan can be a good buy, and in Victoria it comes with a duty concession that can save you a significant amount. But it is a reason to understand the contract before you sign it, because off-the-plan contracts are written by the developer's lawyers, and they are written to protect the developer.
Every off-the-plan contract has a sunset date: the date by which the development must be completed. If it is not finished by then, the contract can be brought to an end.
Here is the problem. If the market has risen since you signed, ending the contract can be worth more to the developer than completing it. Your apartment, bought at 2024 prices, could be resold at today’s prices to somebody else. There have been well-publicised cases of exactly this.
Victoria has introduced protections. A vendor generally cannot simply rescind under a sunset clause. They must give you written notice, explain why, and either obtain your consent or get an order from the Supreme Court.
But protections only help you if you know they exist, and if your contract has been read properly in the first place. We check the sunset date, we check how the clause is drafted, and we tell you exactly what the developer can and cannot do if the build runs late.
This is the single most important reason to have an off-the-plan contract reviewed before you sign.
Victoria offers a duty concession for off-the-plan purchases. Because the property is not built yet, duty can be assessed on the value of the land plus whatever construction has actually been completed at the date of the contract, rather than on the finished value of the property.
For a buyer signing early, before much has been built, that difference can be substantial.
There are eligibility conditions, and the timing of when you sign directly affects how much you save. We confirm your eligibility, calculate the position, and make sure the concession is claimed correctly at settlement.
Most contracts allow the developer to substitute materials and fittings for items of "equivalent quality". What counts as equivalent is defined in the contract, and the definition is usually generous to the developer.
Contracts typically permit a variation in floor area within a stated tolerance. If your apartment comes in smaller than the plan, whether you have any recourse depends entirely on what that tolerance says.
Estimated completion dates are estimates. Construction runs late for weather, materials, labour and approvals.
Your title does not exist yet. It comes into existence when the plan of subdivision is registered. Changes to that plan can change your lot.
the sunset date, and the developer's rescission rights
and everything disclosed in it
and how much the developer can change
and what happens if the property is smaller than promised
and the proposed lot
structure, budgets, and likely fees once the building is occupied
and whether your deposit is properly held
duty concession position
and what rights you have at completion
given the gap between signing and completion
There can be years between signing an off-the-plan contract and settling on it. Your lender will not do a final valuation until the property is close to complete.
If values have fallen, or the completed property values lower than the price you agreed, your lender may not lend what you expected. You are still contractually bound to settle. The shortfall is yours to cover.
This is a real risk and it is worth understanding before you sign, not eighteen months later. We will tell you where your contract leaves you, and we will tell you to talk to your broker early.
We’re based in the Melbourne CBD at Level 1, 530 Little Collins Street. We act for buyers across Melbourne CBD, East Melbourne, West Melbourne, Middle Park, St Kilda, Elwood, Fitzroy, Clifton Hill, Parkville and Ivanhoe.
The sunset clause, the developer’s right to vary what is built, the gap between the price you agreed and what the property is valued at on completion, and construction delays. All four are contract issues, and all four can be assessed before you sign.
It is the date by which the development must be completed. If it is not finished by then, the contract can be ended. In a rising market, ending the contract can be more profitable for the developer than completing it, which is why the clause matters so much. Victorian law now restricts how a vendor can use it, but you need to know what your contract actually says.
Generally yes, if you buy by private sale. It is 3 business days, and it is short. It is not a substitute for having the contract reviewed properly before you sign.
Victoria offers an off-the-plan duty concession. Duty can be assessed on the land value plus construction completed at the contract date rather than the finished value, which can mean a significant saving. Eligibility conditions apply and we confirm your position.
Within the limits set by the contract, usually yes. Finishes can be substituted and floor areas can vary within a stated tolerance. What matters is how generous those limits are, and that is something we check before you sign.
You are still bound to settle. Your lender may not lend the full amount you expected, and you would need to cover the shortfall. This is why the finance position is worth understanding at the start.
Contact us and we will provide a fee proposal for your purchase.
Off-the-plan contracts are written by the developer's lawyers. Have someone read it who is working for you.
Why take a Risk on the biggest financial decision of your life?
We’re proud of the relationships we build and the trust we earn. We work tirelessly to ensure that your property transaction is completed efficiently and without hassle.
Level 1, 530 Little Collins St, Melbourne
info@allhoursproperty.com.au
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