Off-the-Plan Property Purchases in Victoria: A Complete Legal Guide

What "off the plan" means

An off-the-plan purchase is a contract to acquire a lot in a proposed subdivision before the plan of subdivision has registered at Land Use Victoria and, in most cases, before construction is complete. The lot is shown on a draft plan of subdivision attached to the contract, together with specifications, finishes, schedule of areas and (in a strata development) any available owners corporation material. The lot becomes a separate title only when the plan registers under the Subdivision Act 1988 (Vic).

The label covers several very different transactions. Strata apartments and townhouses in medium- and high-density buildings carry building-defect, owners-corporation, staged-development and valuation risk. House-and-land packages on greenfield estates usually split into a land contract plus a separate building contract (which is regulated as a domestic building contract). Vacant land in a subdivision turns on plan registration timing, engineering completion and any developer works. The general contractual framework is similar, but the risk profile and the relevant statutory overlay differ.

Advantages and risks

The principal advantages of buying off the plan can include access to the off-the-plan duty concession, a longer lead time to save the balance of the deposit and arrange finance, early choice of orientation and floor plan, and a new dwelling with statutory warranty protection. For first home buyers, the off-the-plan concession and the first home buyer exemption can sometimes combine to produce very significant duty savings.

The principal risks run the other way. Construction can be delayed well beyond the original estimated date. Markets may fall, leading to a valuation shortfall on settlement. Finance approvals expire and may not be renewed on equivalent terms. The developer may amend the plans or specifications. Sunset dates may become contested. The completed dwelling may have defects. The developer may become insolvent, and deposit recovery in that scenario is not guaranteed. Personal circumstances can change over a multi-year contract. These are real risks a purchaser should be prepared for before signing.

Reservation deposits

A reservation deposit (sometimes called an expression of interest or holding deposit) is a small payment — commonly $1,000 to $5,000 — to take a lot off the market while contracts are prepared. A genuine reservation must be fully refundable until contracts are signed and should expressly state that no contract has been formed. The risk is that the document signed at the time of reservation is in substance an option or a contract; the classification is fact-sensitive. Any reservation document should be reviewed before signing or payment.

The contract of sale

The off-the-plan contract is typically a long-form developer's contract comprising general conditions, special conditions, the plan of subdivision, the specifications, the schedule of finishes, any available owners corporation material and the s 32 statement. Key terms a purchaser's lawyer will review include the deposit amount and how it is held under s 9AA, the sunset date and mechanics, the developer's variation rights, the description of what is being sold, the settlement notice period after registration, default and termination provisions, nomination/on-sale rights and any post-settlement use restrictions.

Room to negotiate special conditions varies with the project and market conditions. Even where no amendment is achievable, the purchaser needs to understand precisely what they are agreeing to before signing.

Deposits: the s 9AA regime

Section 9AA of the Sale of Land Act 1962 (Vic) is the governing provision for deposits under an off-the-plan contract. It caps deposit moneys at no more than 10% of the purchase price — a statutory ceiling, not merely market practice — and it requires deposit moneys paid before registration of the plan of subdivision to be paid to the vendor's legal practitioner, conveyancer or licensed estate agent and to be held on trust for the purchaser until registration. There is no general "approved authorised deposit-taking institution" alternative in the s 9AA off-the-plan rule.

Sections 9AE and 9AF give the purchaser rescission and repayment consequences where the plan of subdivision is not registered within the statutory or contractual period — in particular, s 9AE(2) preserves the purchaser's statutory rescission right if the plan is not registered by the sunset (or statutory) date, with recovery of the deposit together with any interest earned.

A deposit bond or third-party stakeholder arrangement is a contractual device, not a statutory substitute for the s 9AA trust regime, and does not guarantee insolvency protection: whether such an arrangement is accepted, and on what terms it responds, depends on the developer's consent and the wording of the bond or stakeholder deed. Where a lender or financier holds registered security over the project land, that security typically ranks ahead of unsecured purchaser claims. Purchasers concerned about counter-party risk should take specific advice on what protection, if any, a particular structure actually provides.

Disclosure: s 32 vendor statement and s 9AB contract material

Two disclosure regimes apply in parallel. Section 32 of the Sale of Land Act 1962 (Vic) requires the vendor to give the purchaser, before signing, a statement disclosing title particulars, mortgages and charges, easements and covenants (registered and known unregistered), planning zone and overlays, owner-builder works, connected services, outgoings and other prescribed matters. The seven-year building permit disclosure applies to residential building work in accordance with the section's actual statutory scope, not as a universal disclosure of every permit ever issued. Defects in the s 32 may support rescission under section 32K, subject to the statutory defence (the vendor acted honestly and reasonably and the purchaser is substantially in as good a position as if the section had been complied with).

Separately, s 9AB and the off-the-plan contract framework require the vendor to include the prescribed particulars of the proposed subdivision, works and the relevant plan material in the off-the-plan contract itself. Owners corporation information under the Owners Corporations Act 2006 (Vic) is required to the extent prescribed; for an unregistered proposed owners corporation the material actually available before registration is limited, and "proposed" rules, draft insurance, indicative budgets or additional-function notes commonly attached to contracts are typically contract material rather than a full s 32 disclosure. Nothing in either regime warrants that planning approval, building permits, title registration or an occupancy permit will actually issue in the form or on the timing shown. Each remains subject to the ordinary planning, subdivision and building processes. For further detail see our dedicated Section 32 vendor statements guide.

Cooling-off

Cooling-off under section 31 of the Sale of Land Act 1962 (Vic) gives most residential purchasers three clear business days from signing to end the contract. The statutory exclusions include contracts made at or within three clear business days before or after a publicly advertised auction, purchases by a body corporate, purchases by estate agents and certain corporate purchasers, contracts substantially identical to one the same purchaser previously signed, industrial or commercial land, and farming land above 20 hectares. Terminating during cooling-off costs $100 or 0.2% of the price, whichever is greater. Because the window is short and the exclusions technical, cooling-off should not be treated as a substitute for pre-signing legal advice.

Sunset rescission: Division 2 of Part I

The sunset clause sets the latest date by which the plan of subdivision must register (and, in some contracts, by which the dwelling must reach occupancy permit). The vendor's ability to rescind under a sunset clause is governed by Division 2 of Part I of the Sale of Land Act 1962 (Vic) — principally sections 10A to 10E — which together prescribe the purchaser-consent notice process, the consent requirements and the Supreme Court "just and equitable" test. A vendor cannot rescind a prescribed residential off-the-plan contract under a sunset clause without either (a) the purchaser's written consent given after service of the required statutory notice, or (b) an order of the Supreme Court of Victoria that rescission is just and equitable in all the circumstances.

The court weighs prescribed considerations including the reason for the delay, the vendor's conduct, whether the vendor acted unreasonably or in bad faith, the effect on the purchaser and market movements. The purchaser's own statutory right to rescind if the plan remains unregistered after the sunset (or statutory) period is preserved separately by s 9AE(2). A vendor cannot simply rescind on expiry, and a purchaser should not consent to a vendor rescission or a sunset extension without specific legal advice.

Plan amendments under s 9AC

Section 9AC(1) of the Sale of Land Act 1962 (Vic) requires the vendor, if after the contract and before registration of the plan an amendment is required by the Registrar of Titles or requested by the vendor, to advise the purchaser in writing of the proposed amendment within 14 days after receipt of the requirement or making of the request. The notice duty applies to proposed amendments generally — it is not limited to amendments that will materially affect the lot.

Section 9AC(2) then gives the purchaser 14 days after being advised to elect to rescind, but only if the amendment will materially affect the lot to which the contract relates. Whether an amendment "materially affects" the lot is a fact-sensitive test and does not turn on any fixed percentage; percentage tolerances found in developer standard contracts (for example a 5% area or value tolerance) are contractual variation clauses, not the statutory test, and such clauses can themselves be tested under the Australian Consumer Law's unfair contract terms regime. Missing the specific 14-day s 9AC(2) window closes that particular statutory rescission right; it does not automatically extinguish other contractual, ACL or misleading-conduct rights, which depend on the facts. Amendment notices should be assessed by a lawyer on receipt.

Changes to finishes, inclusions and common property

Developer contracts commonly reserve broad rights to substitute finishes and inclusions of "equivalent quality", vary areas within a tolerance, adjust common property configuration or amend owners-corporation entitlements and liabilities. Whether a particular change gives rise to a statutory rescission right under s 9AC, a contractual right or a claim for misleading or deceptive conduct under section 18 of the Australian Consumer Law depends on the change and how the property was represented before signing. Display suite finishes are not necessarily binding if the specifications schedule differs; representations made in marketing materials should be documented.

Unfair contract terms

Standard-form off-the-plan contracts fall within the unfair contract terms regime in the Australian Consumer Law where the purchaser is a consumer or a small business. Amendments commencing 9 November 2023 expanded the regime and introduced civil pecuniary penalties for proposing, applying or relying on an unfair term. Terms that give the developer broad unilateral variation rights, permit unrestricted assignment, impose one-sided penalties or limit the purchaser's remedies may be scrutinised. Whether any specific clause is void requires case-by-case analysis by a court and cannot be assumed.

Finance and valuation risk

Lender pre-approval on signing typically confirms only current borrowing capacity and is usually valid for 3 to 6 months. Over a multi-year off-the-plan settlement the purchaser's employment, income, debts and credit history may change, and lender policies and interest rates almost certainly will. Most off-the-plan contracts do not include a finance condition surviving cooling-off.

A valuation shortfall occurs when the bank's valuer values the completed lot at less than the contract price; the lender then lends against the lower figure, leaving the purchaser to make up the difference from other funds. The contract price cannot be reduced to the valuation. Failure to settle for finance reasons is a purchaser default and damages are not capped at the deposit. Purchasers should stress-test their position and refresh pre-approval 3 to 6 months before estimated completion.

Stamp duty concessions

Victoria's off-the-plan duty concession under the Duties Act 2000 (Vic) reduces the dutiable value of an eligible strata lot by the value of construction and refurbishment performed on or after the contract date. A temporary expansion introduced from 21 October 2024 makes the concession available to all off-the-plan strata buyers — including investors and foreign purchasers — without a price cap. The Building Legislation and Treasury Legislation (Tax Relief) Amendment Act 2026, enacted in June 2026, extended the expansion to contracts entered on or after 21 October 2024 and on or before 20 April 2027 (State Revenue Office guidance may express the end as "before 21 April 2027"). The exact end date and eligibility criteria should be confirmed with the State Revenue Office before contracting.

Outside the temporary window the concession is confined to principal-place-of-residence and first-home-buyer contracts within prescribed dutiable value thresholds. The first home buyer exemption (up to $600,000) and tapered concession ($600,001–$750,000) can layer over the off-the-plan reduction, which is applied to dutiable value first. For the underlying calculation see our dedicated stamp duty and land transfer duty guide.

Foreign purchasers, FIRB and GST withholding

Foreign purchasers acquiring residential property in Victoria generally require FIRB approval and pay foreign purchaser additional duty on top of ordinary duty, and the absentee owner surcharge may apply to land tax once the dwelling is completed. The Commonwealth's foreign investment settings for residential real estate have been the subject of recent Treasury reforms — current Treasury/ATO guidance and FIRB fees should be verified before contracting.

On the sale of new residential premises, GST withholding under Subdivision 14-E of Schedule 1 to the Taxation Administration Act 1953 (Cth) generally requires the purchaser to withhold and remit a portion of the price to the ATO at settlement in accordance with the vendor's notice. The GST position should be checked with a specialist tax adviser.

Nomination, sub-sale and on-sale

Whether the purchaser can nominate a substitute or on-sell the contract before settlement depends on the contract terms and any developer consent conditions. Independent of the contract, sub-sale duty under Chapter 2 Part 4A of the Duties Act 2000 (Vic) can apply where value has shifted between contract and nomination, and additional or foreign purchaser duty consequences can arise. Nomination is not a general right to be assumed; it should be reviewed with a lawyer before any commitment or fee is paid to the developer.

Delays in construction and settlement triggers

Original estimated completion dates in marketing materials are not contractual commitments; the contractual long-stop is the sunset date. Delays past the original estimate are common. Settlement is typically triggered by registration of the plan and the issue of an occupancy permit, followed by a contractual settlement notice of (commonly) 14 days — but the exact trigger and notice period are matters of contract, not a fixed statutory rule, and should be checked. Purchasers should plan for the possibility that settlement is months later than initially indicated.

Defects, occupancy permits and current building insurance

An occupancy permit under the Building Act 1993 (Vic) confirms only that a building is suitable to be occupied under the building regulations. It is not a certificate that the work is free of defects or fully compliant with the contract, specifications or Australian Standards. New off-the-plan dwellings frequently have defects on completion — from minor cosmetic issues to significant water-ingress or structural problems.

Domestic residential building work carries the implied statutory warranties in section 8 of the Domestic Building Contracts Act 1995 (Vic), subject to successor-in-title and applicability qualifications; not every defect claim on an off-the-plan sale falls within that Act. From 1 July 2026 the new Home Warranty scheme replaced Domestic Building Insurance for eligible new domestic building work. Existing DBI policies and eligible pre-1 July 2026 arrangements continue under their terms. Home Warranty applies to eligible contracts and work from 1 July 2026 — broadly, eligible domestic building work over the current threshold in buildings up to three storeys — and can respond more broadly than the legacy DBI trigger of builder death, disappearance or insolvency in defined circumstances, but is subject to limits, exclusions and the wording of the actual Notice of Cover. Higher-rise developments, and many works outside the eligible scope, are not covered; insurance does not automatically respond to every apartment, project, purchaser, defect or loss.

Building regulation in Victoria transferred to the Building and Plumbing Commission (BPC) in 2025. The BPC absorbed the Victorian Building Authority and now runs the domestic-building dispute-resolution service that was previously known as Domestic Building Dispute Resolution Victoria (DBDRV): eligible disputes may be handled by conciliation, binding orders or a certificate enabling proceedings, with VCAT available where applicable and appropriate. Common-property defects are typically pursued by the owners corporation; lot-property defects by the individual owner. Limitation periods apply — early identification, documentation and notice matter.

The settlement process

After the plan of subdivision registers and the occupancy permit issues, the developer serves the contractual settlement notice — commonly 14 days. In that period the purchaser must finalise finance, attend a pre-settlement inspection, identify and record defects in writing, and arrange settlement funds. Settlement occurs electronically through PEXA. Defects identified at pre-settlement are generally not, on their own, grounds to refuse settlement unless the contract expressly permits retention or set-off; the pre- settlement inspection list is important evidence for the post-settlement warranty process.

Default by the purchaser

If the purchaser fails to settle on the appointed date, the developer is usually entitled to serve a default (rescission) notice requiring settlement within a further period. On continued default the developer may terminate the contract, forfeit the deposit and sue for damages — typically the difference between the contract price and the re-sale price, plus holding, marketing and legal costs. On a falling market, losses can exceed the deposit. A purchaser who anticipates difficulty settling should engage a lawyer early — negotiated extensions, nomination (where permitted) or a negotiated release may be options, but they are far easier to arrange before default than after.

Default by the developer and insolvency

Developer default can take the form of failure to register the plan by the sunset date, failure to deliver the dwelling consistent with the plans and specifications, or material breach of the contract. On failure to register within the sunset (or statutory) date, the purchaser may generally rescind under s 9AE(2) and recover the deposit with any interest earned. On material breach, the purchaser may rescind and sue for damages — but recovery depends on the developer's solvency.

Developer insolvency is the most damaging scenario. In insolvency, the purchaser generally ranks as an unsecured creditor for the deposit unless the s 9AA trust arrangements or another effective protection respond in the particular circumstances. Lender financiers typically hold registered security ranking ahead of unsecured claims. Specialist advice is essential at the first sign of financial distress — the outcome in any particular insolvency turns on the security structure, the trust arrangements and the insolvency practitioner's conduct, and cannot be predicted.

Practical due diligence

Pre-contract due diligence is the most effective single protection a purchaser can take. Proportionate to the transaction, it may include:

• The developer: corporate structure, ASIC searches, track record on prior projects, litigation history.
• The builder: current registration, Home Warranty / DBI position, prior project quality.
• The plans and specifications: direct comparison with display materials and marketing brochures; documented representations.
• The s 32 and s 9AB material: cross-checked against independent title, planning and services searches; confirmation that all referenced attachments are attached.
• The contract: s 9AA deposit handling, sunset date and mechanics, variation rights, default and termination provisions, nomination rights, cooling-off applicability.
• The owners corporation: proposed rules (including pets, short-stay and smoking), indicative first-year budget, sinking fund, insurance, manager — noting that the definitive documents only come into existence on registration.
• Finance: stress-tested pre-approval; independent valuation appraisal of the completed lot.
• Tax and revenue: confirmation of duty concession eligibility, foreign purchaser duty and FIRB position, and GST withholding.

When to obtain legal advice

Specialist Victorian property advice is important on any off-the-plan transaction — including before signing any contract or paying any reservation deposit, on receipt of a s 9AC amendment notice (14-day statutory window), on any request to consent to a sunset extension or rescission under Division 2 of Part I, when finance approval is at risk or has been withdrawn, when an independent valuation indicates a shortfall, before pre-settlement inspection and on identification of any material defect, on any indication of developer financial distress, and on any post-settlement defect or warranty issue not promptly addressed by the builder.

Parke Lawyers' property and conveyancing team reviews off-the-plan contracts, advises on duty concessions, manages settlement through PEXA, acts on plan amendments and sunset disputes, and pursues developers for defects and breaches. See our conveyancing and property services page and our commercial and business law services page, or contact Julian McIntyre directly. Related Information Centre coverage includes our guides to buying property in Victoria, buying commercial property, caveat removal, easements and restrictive covenants.

Frequently Asked Questions