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Buying off the plan: a new build without the stress of building

Buying off the plan can offer attractive incentives for both investors and owner-occupiers. It’s an opportunity to secure a property before construction is complete, often with potential financial and lifestyle benefits.

The concept is simple

Buyers put down a deposit (usually 10 per cent) for a house or apartment based on site plans. These commitments to buy help developers fund construction, with full payment due only on completion. The lure for buyers, is a potential capital gain if values rise during this period, but that can be a big “if”.

Buying off the plan can be a win-win for buyers and developers

Having buyers lined up helps developers secure finance. And on the flipside, buyers who commit early can lock in a property at current market rates, without the need to settle until construction is finished, which can be months or even years later. The hope is that the property may be worth more by the time it is completed, and payment due. Most contracts only require a 10 per cent deposit, also allowing buyers additional time to save the 20 per cent needed to avoid Lenders Mortgage Insurance on settlement.

When buying off the plan, a developer should provide buyers with a contract

It outlines the details of the purchase, the completion date and the deadline for when a decision must be made as to whether the development will go ahead. That decision usually hinges on whether sufficient finance has been secured. If the developer pulls the pin or passes the decision deadline, buyers should be entitled to a refund of their deposit under a `sunset clause’, although this can depend on the conditions of the sale contract. It pays to read contract terms carefully and, if required, seek financial or legal advice.

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Common questions for off the plan home buyers

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What deposit do I need to buy a property off the plan?
Most off-the-plan contracts require a deposit of around 10 per cent, with the remaining balance due on completion. This structure gives buyers extra time, often a year or more, to save towards the full purchase price, including the additional funds needed to reach a 20 per cent deposit and avoid Lenders Mortgage Insurance. Guzman Finance can help you work out a savings plan that fits your settlement timeline.
Reputable contracts include a sunset clause, which entitles buyers to a refund of their deposit if the developer doesn’t proceed with the project or misses the decision deadline, usually tied to securing sufficient finance. That said, entitlement to a refund depends on the specific terms of your sale contract, so it’s important to read the fine print carefully and seek legal advice before signing. Guzman Finance can also help you understand how this fits into your broader finance strategy.
Many off-the-plan developments allow some level of customisation, though you won’t have the same design freedom as building a custom home. It’s essential to check your contract for exactly what can be tailored and whether any additional costs apply for upgrades or changes. If you’re unsure how these costs affect your borrowing, the team at Guzman Finance is happy to run through it with you.
Off-the-plan properties can offer tax benefits through depreciation on new buildings and fixtures, plus the potential for rental guarantees. However, it pays to research actual rental returns for similar properties in the area, as some rental guarantees are inflated by developers and may not reflect true market rent once the guarantee period ends. Guzman Finance can help investors structure finance that accounts for these risks.
Look into the developer’s track record: whether they use quality contractors, deliver projects on time, and have a history of completed developments worth visiting in person. It’s also worth researching how many similar developments are planned nearby, to gauge the risk of over-supply, and whether infrastructure in the area supports future demand. Guzman Finance can help you assess your finance options once you’ve found a development you’re confident in.