Buying off the plan means signing a contract for a property that doesn't exist yet. You're buying from drawings, renders and a display suite, not a finished home. It can mean stamp duty savings and a strong tax position for investors, but it also means waiting one to three years for the property to be built, with your finance and the market free to move in the meantime.

Here's what actually helps and what actually hurts when you buy off the plan in Australia, and how to protect yourself if you're considering it.

What Does "Buying Off the Plan" Actually Mean?

You sign a contract and pay a deposit based on plans, artist impressions and a sample of finishes, before construction is finished or sometimes before it's even started. Settlement doesn't happen until the building is complete and registered, which is typically 12 to 36 months after you sign. Your final home loan is arranged and drawn down at that point, not when you sign the contract.

The Pros of Buying Off the Plan

Stamp duty savings. In several states, stamp duty on an off-the-plan purchase is calculated on the value of the land and construction still to be completed at the time of signing, not the finished value. Depending on your state and eligibility, this can mean a meaningful saving compared to buying an established home.

More time to save. Because settlement is a year or more away, you have longer to build savings, pay down other debt, or grow your deposit before your loan is drawn down.

A stronger tax position for investors. Following the 2026 Federal Budget changes, negative gearing on established residential property is being phased out for purchases made after 12 May 2026. New builds, including most off-the-plan purchases, are exempt from that change. That means investors buying off the plan can still offset rental losses against their income and access the 50% capital gains tax discount, where an established property bought after that date generally can't.

Potential capital growth during construction. If property values rise in the area between signing and settlement, you benefit from that growth without having paid for it. The flip side is just as true, which is covered below.

The Cons and Risks You Need to Know

Developer or builder insolvency. Construction insolvencies hit a record high in Australia in the 2024-25 financial year, with 2,832 construction companies going under. If the developer or builder collapses mid-project, the build can stall indefinitely, and while deposits are generally required to be held in trust, getting your money back if a project fails can be slow and far from guaranteed.

Sunset clause risk. Every off-the-plan contract includes a sunset clause, a deadline by which the project must be completed. In New South Wales and Victoria, a developer now needs your consent or a court order to cancel the contract under a sunset clause, which is a real improvement. In other states, protections are weaker, so it's worth understanding exactly what your contract allows before you sign.

Valuation risk at settlement. Your bank doesn't lend against your contract price. It lends against the property's value at settlement, once it's actually built. If values have fallen since you signed, or the valuation simply comes in lower than expected, you can be left funding the gap yourself.

Finance isn't guaranteed. A pre-approval you got when you signed the contract doesn't carry through to settlement one to three years later. Interest rates, lending policy and your own financial circumstances can all change in that time. Buyers who assumed their finance was locked in have been caught out at the exact moment they needed it most.

You're buying what you can't yet inspect. You won't see the finished product, the actual build quality or how the finishes look in real life until settlement is close. Any gap between the display suite and the delivered product is discovered after you've already committed.

How to Protect Yourself If You're Considering It

  • Have a solicitor or conveyancer review the contract before you sign, particularly the sunset clause and any variation terms
  • Research the developer's track record on previous projects, not just the marketing for this one
  • Build a finance buffer into your plans rather than assuming settlement will look exactly like your pre-approval
  • Check your borrowing position with a broker before you sign, and again as settlement approaches
  • Keep records of everything you're promised in writing, not just what's said in the sales office

Get Your Finance Checked Before You Sign

Buying off the plan can work well, especially with the tax position new builds now hold. But the risk in an off-the-plan purchase usually isn't the property, it's the one to three year gap between signing and settlement, and whether your finance still stacks up when it counts.

If you're weighing up an off-the-plan contract, book a free call with Swish and we'll check your borrowing position and the numbers before you commit, not after.