Buying off the plan: sunset clauses, deposits and duty (NSW, Vic, Qld)

How an off-the-plan purchase works

You sign the contract and pay a deposit long before you can move in. The developer then finishes the building and registers the plan of subdivision, and settlement follows. Years can pass between signing and settlement: Victorian off-the-plan contracts must carry a conspicuous notice stating that “a substantial period of time may elapse” before you become the registered owner and that the value of the lot “may change” in the meantime (Sale of Land Act 1962, s 9AA(1A)). Your loan approval, your finances and the market can all move in that time, so a home loan pre-approval obtained at signing does not settle the question of finance.

The rules in the three largest states

Payotte read the Victorian Act itself, and the NSW and Queensland rules on the official government pages; the NSW legislation site could not be opened by Payotte on 21 October 2026, so the NSW section numbers are not quoted here.

New South Wales

A sunset clause in NSW “requires the plan to be registered or an occupation certificate issued by a set date”, failing which either party can rescind. The developer needs the buyer’s consent to end the contract this way; without it, the developer must apply to the NSW Supreme Court. Buyers do not need the Court’s approval to rescind.

The vendor must attach a disclosure statement to the contract, setting out key information such as the sunset dates and other conditional events, with draft documents: the plan, the proposed schedule of finishes and the draft by-laws. You must receive a copy of the registered plan at least 21 days before settlement. The cooling-off period is 10 business days, against 5 for existing homes; withdrawing costs 0.25% of the price, and the period can be waived or shortened only if your lawyer or conveyancer gives the required certificate.

A bank guarantee or deposit bond can replace a cash deposit only if the developer agrees before the contract is signed. An expression of interest payment does not secure the property. For new homes and multi-unit buildings of up to three storeys, home building compensation cover applies to residential work over $20,000 including GST: if work has not started, the developer must give proof of cover within 14 days, and the right to cancel for lack of cover ends at settlement.

Duty deferral. Without a deferral, NSW duty is generally due within 3 months of signing. If you buy off the plan to live in the property, duty is due at the earliest of 15 months after signing, completion and settlement, or assignment of any part of the contract. For contracts exchanged on or after 1 July 2023, at least one purchaser must move in within 12 months after settlement and live there for a continuous 12 months. The deferral is not available for holiday homes, investment or commercial properties, trusts or companies, or if any purchaser is a foreign person when the contract is signed. It is not automatic: your solicitor or conveyancer applies. The amount of duty is set out in the NSW stamp duty guide.

Victoria

The Sale of Land Act 1962 sets the rules for off-the-plan contracts:

• Deposit: no more than 10% of the price (s 9AA(1)(b)), paid to the vendor’s legal practitioner, conveyancer or licensed estate agent and held on trust for you until the plan of subdivision is registered. You may negotiate a lower amount.
• Registration within 18 months: if the plan is not registered within 18 months of the contract, or another period the contract specifies, you may rescind at any time before it is registered (s 9AE(2)), and you are entitled to the immediate return of the deposit, less any occupation fees paid (s 9AF).
• Plan amendments: the vendor must tell you in writing within 14 days of an amendment required by the Registrar or requested by the vendor; you may rescind within 14 days if it materially affects your lot (s 9AC).
• Possession: you are not entitled to possession before the plan is registered (s 9AD). For a lot in a residential apartment building, the vendor must not let you take possession before an occupancy permit is issued (s 9ADA), and once the permit is issued you may rescind if the developer has not arranged the developer bond required by the Building Act 1993, or has arranged one for less than the required amount (s 9AEA).
• Sunset clauses: the vendor may rescind a residential off-the-plan contract under a sunset clause only if the plan has not been registered, or an occupancy permit has not been issued, by the sunset date (s 10B). Before rescinding, the vendor must obtain the written consent of each purchaser after giving at least 28 days’ written notice stating the reason for rescinding, the reason for the delay and that you are not obliged to consent. Otherwise the vendor must ask the Supreme Court, which may allow it only if it is “just and equitable in all the circumstances”, considering among other things whether the lot has increased in value; the vendor pays your costs unless you unreasonably withheld consent (s 10E). A contract term that conflicts with these rules has no effect (s 10C).

Duty concessions. Victoria lets the purchaser deduct the construction costs incurred on or after the contract date from the dutiable value. There are two concessions:

The temporary concession covers only a lot in a strata subdivision with common property; it does not apply to house-and-land packages. Neither concession reduces foreign purchaser additional duty, which is calculated on the dutiable value before the concession (see foreign purchaser surcharge duty). The standard concession applies only to the first sale after the plan is registered, not to later transactions or sub-sales. The Victorian rates are in the land transfer duty guide.

Queensland

Under the Land Sales Act 1984, the seller must give you a disclosure statement that identifies you, clearly identifies the land or unit and records the seller’s claims about the future title; for a proposed lot, it gives the lot number, total area and orientation. The seller must settle no later than 18 months after you enter into the contract; if it does not (other than because of your default), you may end the contract by written notice before settlement.

Since 22 November 2023, sellers can use sunset clauses to end off-the-plan land contracts only with your written consent, under a Supreme Court order or in another prescribed situation. These limits do not apply to “community titles schemes such as apartments”. Deposits can be released from trust to the seller only at settlement. You may back out if a change to the disclosed state of the land causes you material prejudice, within 30 days of the developer’s notice or before title transfers, whichever is sooner. For an apartment or townhouse, see also strata title and body corporate.

Other states and territories

This guide covers the three states above. In Western Australia, South Australia, Tasmania, the ACT and the Northern Territory, the contract terms, deposit rules and any first home buyer concessions for new homes are set by local law: see first home buyer concessions and ask a local conveyancer.

Which professional to consult

A conveyancer or solicitor should read the contract, the disclosure statement and the sunset date before you sign or pay a deposit, and handles the duty deferral or concession (conveyancers). A mortgage broker can tell you how lenders treat a settlement that is a year or more away (mortgage brokers). A building inspector can check the finished lot before settlement (building inspectors).