Buying off the plan. This is a term that is commonly used in today’s property market, especially for apartments as well as house and land packages. ‘Buying off the plan’ refers to buying a property before it is completed, and this may include buying a property that is merely an architect’s or builders plan.
The deposit that is paid secures the property and the contract, and the balance is paid either through progressive payments during build or when the property is completed.
There are significant stamp duty benefits as duty is payable on land value only as at the date of the contract of sale (before the building exists).
It is essential to comprehend the nature of this type of transaction before you enter into it. Make sure you understand (amongst other things):
- what the property will look like when it is completed;
- that you have a strategy for your accommodation during the waiting period;
- whether the developer has a track record or their work is available for inspection;
- whether there are issues concerning the settlement date, and that any lack of certainty is not a problem for you;
- what happens if the property is not completed on time; whether there is the chance that a local council may require changes to the plan, and the consequences.
Make sure you have:
- worked out your budget
- arranged a pre-approved loan.
- selected your preferred suburb/location
- worked out what features you want in a property (for example, number and size of bedrooms).
- your legal practitioner or conveyancer check the section 32 vendor’s statement and the contract of sale
- knowledge about your cooling-off rights
- organised your deposit, so you can pay when required by the agent
- checked all items you believe come with the property are stated on the contract of sale
- checked those items on final inspection
- purchased a kit if you decide to do your own conveyancing.