Off-the-plan conveyancing in NSW: what buyers need to know
Buying off-the-plan means signing a contract before the property is built. It can offer price advantages and first home buyer benefits, but the contracts are longer, more complex, and carry risks that do not apply to established property purchases. Here is what the conveyancing process looks like and what to watch for.
This guide provides general educational information about the off-the-plan conveyancing process in NSW. It is not legal advice. Every off-the-plan contract is different. Have your contract reviewed by a licensed conveyancer or solicitor before you sign.
What off-the-plan conveyancing is
An off-the-plan purchase occurs when you enter a contract to buy a property based on plans and specifications before the property is built, subdivided, or has a registered title. The most common examples in NSW are:
- New apartments or units in a strata development not yet constructed
- House-and-land packages where the land is subdivided but the house is not yet built
- Townhouses in a new development where a community title scheme is being created
The key difference from buying an established property is the time gap between exchange and settlement. For established property, settlement typically happens 4 to 6 weeks after exchange. For off-the-plan purchases, settlement can be 12 months to several years after you sign the contract, once the building is complete and the title is registered.
During that gap, a lot can change: property values, interest rates, your personal financial situation, and the project itself. The contract governs what happens in each scenario, which is why reviewing it before exchange is critical.
The deposit and how it is held
The standard deposit on an off-the-plan purchase in NSW is 10% of the purchase price, paid at exchange. Unlike an established property purchase where the vendor holds the deposit in trust, an off-the-plan deposit is typically held in a trust account until settlement.
Under the Conveyancing Act 1919 (NSW) and the Conveyancing (Sale of Land) Regulation 2022 (NSW), vendor disclosure obligations apply to off-the-plan contracts. The vendor must provide a disclosure statement that includes the plan of the lot, the proposed by-laws (for strata), the sunset date, and other material information.
Some developers negotiate a lower deposit (5%) or allow a deposit bond instead of cash. A deposit bond is a guarantee from an insurer that replaces the cash deposit, meaning you do not have to part with cash until settlement. This can be useful if your funds are tied up elsewhere, but it comes with its own costs and approval conditions.
Your conveyancer will review the deposit structure in the contract and advise whether it is standard or whether the terms favour the developer.
Sunset clauses: the 2023 NSW reforms
A sunset clause in an off-the-plan contract sets a deadline by which the property title must be registered. If it is not registered by that date, the contract can be rescinded.
Before 2023, developers in NSW could use sunset clauses to exit contracts when the property market had risen significantly since the original sale price. By allowing the sunset date to pass (by delaying construction), a developer could rescind, resell the same unit at a higher price, and pocket the difference. Buyers lost their contracts on properties they had been waiting years to settle.
The Conveyancing Amendment (Sunset Clauses) Act 2023 (NSW) changed this. Under the reforms, a vendor can only rescind an off-the-plan contract using a sunset clause if:
- The buyer provides written consent to the rescission; or
- The Supreme Court of NSW authorises the rescission after considering whether it is just and equitable.
This substantially strengthened buyer protections. A developer can no longer opportunistically allow the sunset date to lapse. The Court must be satisfied there is a genuine reason for the rescission before approving it.
Buyers retain their right to rescind using a sunset clause if title is not registered by the sunset date. If you want to exit the contract after a delay, that right is yours. The reform only restricts vendors from using the clause to exit, not buyers.
When reviewing an off-the-plan contract, your conveyancer will identify the sunset date and assess whether it is realistic given the project's current progress. A short sunset date on a large development that has barely started can be a warning sign.
Stamp duty on off-the-plan purchases
Transfer duty (stamp duty) in NSW is calculated on the value of the land being transferred, assessed at the date of the contract (not the date of settlement). For an off-the-plan purchase, this is typically the value of the lot or proposed lot as at exchange.
12-month deferral for owner-occupiers
If you are purchasing the property as your principal place of residence, you can defer stamp duty payment for up to 12 months from the date of the contract (or until settlement, whichever is earlier). This deferral applies under Revenue NSW's off-the-plan arrangements. You do not pay stamp duty at exchange; you pay it either at settlement or within 12 months, whichever comes first.
If settlement has not occurred within 12 months, you pay the duty at the 12-month mark and then again claim a credit at settlement if the final duty differs from what was assessed. The practical effect is that you have a significant interest-free period before stamp duty falls due.
First home buyer exemptions and concessions
First home buyers purchasing off-the-plan may qualify for the standard first home buyer stamp duty exemption or concession in NSW, provided the property value falls within the relevant thresholds (as at 2025: full exemption for properties up to $800,000; partial concession for properties up to $1,000,000 for buyers who have never previously owned property). The off-the-plan deferral and the first home buyer concession can apply together, meaning eligible first home buyers may pay no stamp duty at all, or a reduced amount.
Confirm eligibility with Revenue NSW before relying on these concessions, as the rules change and depend on your circumstances. See our first home buyer guide for more detail.
Main risks for buyers
Settlement risk (valuation gap)
If property values fall between exchange and settlement, your lender's valuation at settlement may come in below the purchase price. This creates a valuation gap. Your lender will only lend against the lower valuation, meaning you need to fund the difference in cash. This is a real risk in a falling or stagnant market, particularly in high-density apartment developments where oversupply can depress values in a specific precinct.
Construction delays and project changes
Off-the-plan projects frequently take longer than originally planned. Construction delays mean your mortgage pre-approval may expire before you can settle. Banks typically provide pre-approvals for 90 to 180 days; a multi-year project can require multiple renewals, with no guarantee the same conditions (rate, LVR) will apply.
Developers are also typically entitled to make minor changes to the plans and specifications without needing your consent. The contract will define what constitutes a minor change; your conveyancer should review this definition carefully, as some contracts give developers significant latitude to alter finishes, layouts, or common areas.
Material changes and rescission rights
If a developer makes a material change to the disclosure statement (a change that would cause a reasonable buyer to be materially prejudiced), you may have a right to rescind the contract within a specified period (typically 14 days of receiving notice of the change). This is a statutory right under the Conveyancing (Sale of Land) Regulation 2022. Your conveyancer will notify you if a material change notice is received and advise whether rescission is in your interest.
Developer insolvency
If the developer becomes insolvent before the project is completed, your deposit may be at risk. The deposit should be held in trust, but recovery in an insolvency is not straightforward. Some buyers take out deposit bond insurance or negotiate terms that specifically protect the deposit in an insolvency. Review the developer's track record and the project's construction financing before exchange.
Due diligence checklist for off-the-plan purchases
Before exchange, consider the following:
- Have the contract reviewed by a conveyancer before signing -- off-the-plan contracts are long and complex; do not sign without advice.
- Review the disclosure statement -- check the plan, by-laws (for strata), sunset date, and developer's obligations.
- Research the developer's track record -- have they completed similar projects on time? Are there complaints lodged with NSW Fair Trading?
- Check the sunset date is realistic -- compare the sunset date to the project's current construction stage and typical completion timelines.
- Understand the minor change provisions -- ask your conveyancer what the developer is permitted to change without your consent.
- Confirm the deposit trust arrangements -- where is the deposit held? Who is the trustee? What happens to it if the developer enters administration?
- Consider a valuation gap scenario -- can you fund the difference in cash if the property values less at settlement than the contract price?
- Confirm your mortgage pre-approval arrangements -- discuss with your broker how pre-approval will work over a multi-year settlement period.
- Check stamp duty obligations -- confirm timing and whether you qualify for any concession or deferral with Revenue NSW or your conveyancer.
What a conveyancer does on an off-the-plan purchase
Off-the-plan conveyancing involves more work than a standard established property transaction because the contract is longer and the risks are more varied. A conveyancer will typically:
- Review the entire contract and disclosure statement before you sign and advise on any unusual or risky terms
- Identify the sunset date and assess its feasibility
- Explain the minor change provisions and what the developer is permitted to alter
- Advise on stamp duty timing and any applicable concession or deferral
- Monitor the progress of the development and advise you when title registration is imminent
- Receive and review any material change notices from the developer and advise whether to rescind or proceed
- Coordinate with your lender to ensure settlement funds are ready once title is registered
- Manage settlement using PEXA (electronic settlement) once title is registered and settlement is scheduled
Off-the-plan conveyancing fees are typically higher than for established property because of this additional work. Expect to pay more than the standard NSW conveyancing fee range, and clarify the scope of services and fee structure with your conveyancer upfront.
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Common questions
What is off-the-plan conveyancing in NSW?
Off-the-plan conveyancing is the purchase of a property (typically an apartment, unit, or house-and-land package) that does not yet have a registered title at the time contracts are exchanged. You are buying based on plans. Settlement occurs once the building is complete and title is registered, which can be 12 months to several years after exchange.
What is a sunset clause and how did the 2023 reforms change it?
A sunset clause sets a deadline for title registration. Before 2023, developers could use sunset clauses to exit contracts when prices had risen. The Conveyancing Amendment (Sunset Clauses) Act 2023 (NSW) now requires vendors to obtain the buyer's written consent or Supreme Court approval before using a sunset clause to rescind. Buyers retain their right to rescind if the developer fails to register title by the sunset date.
Do I pay stamp duty at exchange or settlement for an off-the-plan purchase?
Duty is assessed at the date of the contract but owner-occupiers can defer payment for up to 12 months. First home buyers may qualify for a full exemption or concession if the property value is within the relevant Revenue NSW threshold. Confirm your eligibility with a conveyancer or Revenue NSW before relying on a concession.
What happens if the property is worth less at settlement than I paid?
If your lender's valuation at settlement is lower than the contract price, you will need to fund the difference from your own cash (the valuation gap). Your lender will only lend against the lower valuation. This is a known risk in off-the-plan purchases in falling markets. Discuss this scenario with your mortgage broker before exchange.
Conveyancing Explained provides general information about property transactions in New South Wales. It is not legal advice and does not create a client relationship. For advice on your situation, engage a licensed NSW conveyancer or a solicitor.