Buying off-the-plan in NSW — what to check before you sign

The short version

An off-the-plan purchase is a contract to buy a lot before the plan of subdivision is registered — usually before the building is finished, sometimes before it's started. You sign now, pay a deposit, and settle later once the plan registers. Everything that matters lives in that gap: sunset dates, changes to what you were promised, and how long your finance approval can realistically hold.

The disclosure statement

Since December 2019, a residential off-the-plan contract in NSW must include a disclosure statement with a draft plan, the proposed schedule of finishes, and any proposed by-laws or management statement. This is the baseline you later measure changes against — keep it.

A longer cooling-off period

Residential off-the-plan contracts carry a 10-business-day cooling-off period — double the standard five. It can still be waived with a Section 66W certificate, so check whether the contract asks you to sign one before you commit.

Changes to material particulars

If something the disclosure promised changes in a way that is material — the lot shrinks, the layout changes, the finishes are swapped — the vendor must notify you. Depending on the change, you may have a window (commonly 14 days) to rescind, or a right to claim compensation of up to 2% of the price if you go ahead but are adversely affected. Missing the window is the classic off-the-plan mistake, so the timing matters more than the fine print.

Your deposit must sit in trust

For residential off-the-plan contracts, the deposit (and any instalments) must be held in a trust or controlled-money account until settlement. A special condition that hands your deposit to the vendor to spend — something we still see in contracts — doesn't override that protection for an off-the-plan residential purchase.

Sunset clauses

The sunset date is the long-stop by which the plan must register (or another defined sunset event must happen). Under section 66ZL of the Conveyancing Act 1919 (NSW), a vendor generally cannot rescind under a sunset clause without your written consent (after 28 days' notice with reasons) or a Supreme Court order. What the statute doesn't stop is a contract that lets the vendor extend the sunset date — we've seen clauses allowing up to 36 months of extension. Read the extension rights as carefully as the date itself. There's more in our sunset clauses guide.

Stamp duty deferral

If you're buying off-the-plan to live in, NSW lets eligible purchasers defer transfer duty for up to 12 months after signing (or until completion if earlier). Eligibility rules change, so confirm the current position for your purchase rather than assume.

What to check before you sign

1. The sunset date — and the extension clauses. A fair date with an unlimited extension right isn't a fair date.
2. What's actually fixed. Schedule of finishes versus "indicative" images; substitution clauses that let the developer swap materials.
3. Your rescission and compensation rights if material particulars change — and the notice windows attached to them.
4. Where the deposit sits and whether the contract tries to release it to the vendor.
5. Finance across the build. Pre-approvals expire; a two-year build needs a plan for revaluation and re-approval near settlement.

Common questions

Can the developer cancel and resell at a higher price?

Not freely. Since the sunset-clause reforms, rescission under a sunset clause needs your consent or a Supreme Court order — and if the vendor goes to court, they'll usually bear your costs unless the court orders otherwise.

What happens if the final lot is smaller than the plan I was shown?

A material change to the lot triggers the notification regime — you may be able to rescind within the window, or claim compensation if you proceed. Compare the registered plan against the disclosure statement before settlement, not after.

When do I actually settle?

Typically a set number of days (often 14) after the vendor notifies you that the plan has registered — and, for a new building, once an occupation certificate exists. Your contract sets the exact trigger, so know it before your lender needs to.