An off-the-plan buyer often commits to the contract long before settlement, which means the finance position that looked comfortable at signing can genuinely need reassessing when settlement finally arrives. Valuation, income, lender policy, interest rates and the property’s completed security details can all have moved in the meantime.
Deposit now, settlement later
Unlike a standard construction loan, an off-the-plan purchase is a sale contract, not a progressive-draw facility, you typically pay a deposit under the contract and your lender funds the balance at settlement, once the project completes, not through developer progress claims along the way.
The four risks worth planning for
| Risk | What it means |
|---|---|
| Valuation risk | The completed property’s lender valuation may come in below the original contract price, increasing the cash you need to find |
| Pre-approval expiry | An early pre-approval is not a guarantee across a multi-year development, it will typically need refreshing closer to settlement |
| LVR change | If the valuation differs from the contract price, your LVR (and possibly LMI) can change from what you originally planned around |
| Developer/project delay | Settlement timing can move; contract rights around delay belong with your conveyancer or solicitor, not your broker |
Government duty timing is also date-sensitive
Off-the-plan duty concessions and deferral rules can be date-sensitive. The relevant date can depend on the jurisdiction and transaction. Use Government Support to open the official state or territory guidance and confirm which rules apply to your contract.
What to prepare
- A realistic buffer in case the completed valuation is lower than the contract price
- A plan to refresh pre-approval as settlement approaches, not just at contract signing
- Your solicitor/conveyancer’s advice on sunset clauses and delay provisions in the contract
- Confirmation of your state’s current off-the-plan duty treatment for your contract date
Next step: keep your Funds Position current as settlement approaches using the Funds Position calculator, and talk with KartikKumar well before your settlement date, not after a valuation surprise.