Buying Off-the-Plan in Victoria: What You’re Not Being Told

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Following On from Our Last Article...

In our recent article Should You Buy a New Build or Established Property in Victoria?, we broke down the financial, lifestyle and risk differences between new builds and existing homes.

This follow-up focuses on what off-the-plan contracts really are—and why they’re often written for the developer, not for you.

What Is an Off-the-Plan Contract?

An off-the-plan contract is a legally binding agreement to purchase a property before it is built. You agree to buy a property based on:

  • A conceptual floorplan

  • A proposed title that does not yet exist

  • Artist impressions and glossy brochures

These are not turnkey homes—they’re unfinished projects. That means the developer controls the timeline, the specifications, and often your money for up to 3 years.

What the Law Now Requires (But Developers Still Push Against)

Following widespread abuse of "sunset clauses", the Sale of Land Amendment Act 2019 (Vic) introduced protections including:

  • Developers must get your written consent or Supreme Court approval to rescind under a sunset clause

  • Material changes to design or common property must be clearly disclosed

  • Buyers can now rescind where the developer delays registration for years beyond the original timeframe

But here's the catch: many buyers still don’t understand what they're signing, and most developer-drafted contracts:

  • Include unlimited discretion to change floorplans or materials

  • Allow lengthy extension clauses beyond sunset protection

  • Require buyers to settle quickly after registration—often with no re-approval of finance

The Risks You Must Understand Before Signing

🔹 1. Delays Can Kill Your Finance

Finance approval is generally valid for 90–180 days. If registration takes 2+ years, you’ll need to:

  • Reapply

  • Resubmit payslips

  • Be re-assessed under new lending conditions (which may no longer favour you)

We’ve seen banks pull out at the last minute—leaving the buyer liable for breach.

🔹 2. Plans Can and Do Change

That three-bedroom you loved may become a smaller two-bedroom with less light and smaller windows. Unless the change is "material" under law, you may be forced to settle anyway.

We advise reviewing:

  • Clause wording about fixtures, finishes, layout flexibility

  • Discretion granted to the vendor to vary specifications

  • Any mention of ‘substantially the same’—a legal grey area developers exploit

🔹 3. GST and Duty Are Often Misunderstood

Many buyers don’t realise:

  • GST may apply in full on the purchase price

  • Stamp duty concessions may no longer be available if you're no longer eligible when settlement occurs

  • Nomination or trust structure changes during construction can trigger double duty

At Victorian Property Settlements, we flag all of this before you sign—not after.

What Happens If You Want to Walk Away?

You don’t automatically have that right.

Unless the contract includes:

  • A cooling-off period (private sales only—not auctions)

  • A sunset clause with expiry

  • An express rescission right (rare)

…then you're locked in—and a failure to settle can lead to:

  • Loss of deposit

  • Notice of Default

  • Legal action for damages

David Dawn’s Final Word

“Off-the-plan is sold as a dream—but often delivered as a compromise. If you’re buying something that doesn’t exist yet, you need someone experienced to review what the developer’s really promising.”

At Victorian Property Settlements, we:

  • Review off-the-plan contracts clause-by-clause

  • Advise on sunset clauses, duty risks, and plan variations

  • Ensure your contract reflects your expectations—not just the developer’s convenience

  • Assist with default protection and nomination timing if you’re buying via SMSF or trust

Final Thoughts

A $600,000 property bought off-the-plan is not safer than a $600,000 established home. In fact, it often comes with more uncertainty, fewer protections, and less control.

Off-the-plan contracts must be scrutinised, not skimmed. Don’t sign a glossy brochure disguised as a contract.

Need Help Reviewing an Off-the-Plan Contract?

Victorian Property Settlements – Trusted for over 25 years by buyers who want clarity, not catastrophe.
📍 Frankston | 📞 03 9783 0111 | ✉️ david@quick32.com
🌐 www.victorianpropertysettlements.com.au