With the release of Contracts for the Kings Forest development at Kingscliff, we thought some information when buying off the plan might be timely.
Buying land off the plan means purchasing a block of land before it has been fully developed or registered. While this can be an exciting opportunity—often with financial benefits it also comes with risks and considerations. If you’re thinking about purchasing land off the plan in New South Wales, here’s what you need to know before making a commitment.
1. Understanding What “Off the Plan” Means
When you buy land off the plan, you’re purchasing a block in a new estate before it has been fully subdivided, registered, or developed. This means:
✔ You’re committing to the purchase before the land is ready to build on.✔ The final size, layout, or features may slightly change by the time the land is registered.✔ There will likely be a waiting period before settlement.
2. Research the Developer and Estate
Not all developments are created equal! Before signing a contract:
✔ Research the developer – Check their track record, previous projects, and reviews.✔ Visit the site – Even if it’s still under construction, see where the estate is located.✔ Look at estate plans – Understand future roads, parks, schools, and amenities.✔ Speak to current buyers – If there’s a staged release, ask existing buyers about their experience.
3. Check Land Registration Timelines
Since the land hasn’t been officially registered yet, settlement will only occur once the land is subdivided and registered with NSW Land Registry Services. This can take months or even years, so consider:
✔ Expected registration date – Ask for an estimated timeframe.✔ Delays – Unforeseen issues like council approvals, weather, or finance delays can push back registration.✔ Your financial position – Ensure you can hold your deposit until registration without financial strain.
4. Understanding the Contract Terms
Purchasing land off the plan involves signing a Contract of Sale, which outlines important terms and conditions. Key points to check:
✔ Deposit Amount – Typically 5-10%, held in a trust account until settlement.✔ Sunset Clause – This sets a deadline for land registration. If it isn’t registered by this date, you or the developer may be able to exit the contract.✔ Variations to the Land – Developers often reserve the right to make minor changes to lot sizes, zoning, or infrastructure.✔ Inclusions & Restrictions – Some estates have building guidelines, such as required facades, landscaping rules, or timeframes for building.
💡 Tip: Have a SL Conveyancing review the contract before you sign to ensure your interests are protected.
5. Financial Considerations & Hidden Costs
Buying off the plan may offer financial incentives, but there are also hidden costs to be aware of:
✔ Stamp Duty Concessions – In some cases, you may qualify for first-home buyer grants or stamp duty reductions.✔ Lending Restrictions – Some banks may only offer pre-approval but won’t provide full loan approval until the land is registered.✔ Price Increases – If land values rise before settlement, you could gain instant equity, but if values drop, securing finance may be harder.✔ Ongoing Costs – Council rates, developer fees, and maintenance costs may apply before you build.
6. Risks to Consider
While buying land off the plan has benefits, there are potential risks:
🚨 Market Fluctuations – If property prices drop before settlement, your loan approval may be affected.🚨 Delays in Registration – If land registration takes longer than expected, your financial situation or loan approval could change.🚨 Developer Issues – If the developer faces financial difficulties, it could impact the completion of the estate.🚨 Contract Conditions – Some contracts heavily favor the developer, so always seek legal advice.
7. The Role of a SL Conveyancing
Having a conveyancer on your side when buying off the plan is crucial. At SL Conveyancing, we:
✔ Review the contract to ensure fair terms and conditions.✔ Explain sunset clauses, inclusions, and financial obligations.✔ Ensure your deposit is secure and protected.✔ Guide you through the settlement process once the land is registered.
Final Thoughts: Is Buying Land Off the Plan Right for You?
Buying land off the plan can be a great investment if you do your research and understand the risks. By carefully reviewing the contract, planning your finances, and working with an experienced conveyancer, you can confidently make a smart property decision.
🔹 Thinking of purchasing land off the plan? Contact SL Conveyancing today for expert legal advice and a smooth, stress-free transaction!
💬 Get in touch today!
📞 Tanya Spencer 1300 723 803 📩 tanya@slconveyancing.com.au
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