Buyer’s guide · NSW
Buying off the plan in NSW: what every buyer needs to know
Buying off the plan in NSW comes with extra legal protections, from a 10 business day cooling-off period to limits on sunset clauses. Here is what you need to know before you sign.
Buying off the plan in NSW means signing a contract for a home that hasn’t been built yet, or doesn’t yet have its own title. It can lock in a price early and give you time to save before settlement.
But you’re buying from plans and promises, not a finished home you can inspect. That’s why NSW law gives off-the-plan buyers extra protections. This guide explains your rights and the risks to check before you sign.
Key takeaways
- You get a 10 business day cooling-off period, double the usual 5 days. If you pull out, you lose 0.25% of the price.
- The seller must attach a disclosure statement and draft documents to the contract before you sign. If they don’t, you can cancel within 14 days.
- If something important changes (a “material particular”), the seller must tell you. You may be able to cancel or claim up to 2% compensation.
- You must be given the registered plan at least 21 days before settlement.
- Your deposit must be held in a trust or controlled money account until settlement.
- A developer can’t use a sunset clause to cancel without your written consent or a Supreme Court order.
On this page
- What does buying off the plan mean?
- Is there a cooling-off period when buying off the plan in NSW?
- What must the disclosure statement include?
- What happens if the developer changes the plans?
- How are deposits held for off-the-plan purchases?
- What is a sunset clause?
- Settlement and the registered plan
- Pros and cons of buying off the plan
- Frequently asked questions
What does buying off the plan mean?
Under the Conveyancing Act 1919 (NSW), an off-the-plan contract is a contract to buy a residential lot that hasn’t been created yet. A lot is created when the plan for it is registered.
In plain terms, you exchange contracts while the building or subdivision is still being planned or built. You might be buying an apartment, a townhouse or a block of land in a new estate.
Settlement can’t happen until the plan is registered. This means there’s often a long gap between exchange and settlement, sometimes years.
Which laws apply?
The main rules are in Part 4, Division 10 of the Conveyancing Act 1919 and the Conveyancing (Sale of Land) Regulation 2022. The NSW Registrar General publishes guidance on how they work.
Is there a cooling-off period when buying off the plan in NSW?
Yes. For off-the-plan contracts, the cooling-off period is 10 business days. It ends at 5pm on the tenth business day after the contract is made.
If you cancel during the cooling-off period, you lose 0.25% of the purchase price. For a $800,000 apartment, that’s $2,000.
You can only shorten or waive the cooling-off period if your lawyer or conveyancer gives a special certificate (under section 66W). They must explain the effect of the contract and of giving up your cooling-off rights first.
Learn more in our guide to cooling-off periods in NSW.
What must the disclosure statement include?
Before you sign, the seller must attach a disclosure statement in the approved form. It sets out key information, such as the sunset date and other events that must happen before settlement.
The seller must also attach draft documents, including:
- a draft plan showing the proposed lot number, the area of the lot and enough detail to identify its location
- any proposed schedule of finishes (the fixtures, fittings and materials)
- draft by-laws (the rules for a strata or community scheme)
- any proposed easements, covenants or restrictions (often in a “section 88B instrument”)
- any draft strata development contract, strata management statement or building management statement
If any of these are missing, you can cancel (rescind) the contract within 14 days of exchange.
What happens if the developer changes the plans?
Plans often change during a build. The law requires the seller to give you a notice of changes if the disclosure statement was, or becomes, inaccurate in a “material particular”.
What is a material particular?
A material particular is something that will, or is likely to, adversely affect your use or enjoyment of the lot. It might be a change to the draft plan, by-laws, schedule of finishes, easements or covenants.
Some changes don’t count, such as a change to the lot number or street name. A change to the location or area of a parking or storage space also doesn’t count, if the contract allows it.
Your options if a change affects you
You can cancel the contract or claim compensation of up to 2% of the price if both of these apply:
- you would not have signed if you had known about the change, and
- you are materially prejudiced (worse off in a real way) by the change.
You only have 14 days from the notice (or from receiving the registered plan that shows the change) to act. Don’t wait. Send the notice to your lawyer straight away.
Many contracts also say that small changes, such as a lot area change of 5% or less, won’t give you any right to cancel. Read these clauses carefully before you sign.
How are deposits held for off-the-plan purchases?
A deposit of 10% of the price is common, but it can be negotiated. Your deposit must be held by a stakeholder (usually the agent, solicitor or conveyancer) in a trust or controlled money account.
It can’t be released to the developer before settlement. This protects your money if the project fails.
You may be able to use a bank guarantee or deposit bond instead of cash, but only if the developer agrees before you sign.
What is a sunset clause?
A sunset clause sets a deadline (the sunset date) for something to happen, such as registration of the plan or the issue of an occupation certificate. If it doesn’t happen in time, the contract can be ended.
In the past, some developers delayed projects so they could cancel and resell at a higher price. NSW law now stops this. Under section 66ZS of the Conveyancing Act 1919, a developer can only cancel under a sunset clause if:
- you give your written consent, or
- the Supreme Court makes an order allowing it.
The developer must give you written notice explaining why the sunset event hasn’t happened. You don’t have to consent.
These limits apply to the developer. Your own right as a buyer to end the contract under a sunset clause is not restricted in the same way.
Settlement and the registered plan
Once the plan is registered, the seller must give you a copy of the registered plan and related documents. You must receive them at least 21 days before settlement, and you can’t be made to settle any earlier.
Use the time before settlement to compare the registered plan with the draft plan, arrange your finance and inspect the property. Our guide to pre-settlement inspections explains what to look for.
Remember your loan approval may have expired since you signed. Check with your lender early, as banks may value the property lower than the price you agreed.
Pros and cons of buying off the plan
| Benefits | Risks |
|---|---|
| Time to save before settlement | The finished home may differ from the plans |
| A brand new home with new fixtures | Delays and possible sunset clause issues |
| Possible government concessions for eligible buyers | The property may be valued lower at settlement |
| Choice of lot or finishes early in the project | Building defects in new construction |
Some buyers of new homes may qualify for transfer duty concessions or grants. See our guide to NSW first home buyer grants and schemes and Revenue NSW for off-the-plan duty rules.
Frequently asked questions
How long is the cooling-off period for off-the-plan contracts?
It’s 10 business days. You lose 0.25% of the price if you cancel during this time.
Can the developer keep my deposit if the project fails?
Your deposit must be held in a trust or controlled money account until settlement. It can’t be released to the developer early. If the contract is properly cancelled, it is generally refunded.
Can the developer cancel my contract to sell for more?
Not using a sunset clause without your written consent or a Supreme Court order.
What if my apartment is smaller than shown on the plan?
If the change adversely affects you and you wouldn’t have signed, you may be able to cancel or claim up to 2% compensation. You must act within 14 days. Check your contract’s clauses on minor changes too.
For more detail, read the NSW Government’s off-the-plan guide.
Need help buying property in NSW?
Talk to our property team
Property & Conveyancing
Off-the-plan contracts are long and often favour the developer. Our team can review the contract and disclosure statement before you sign and guide you through to settlement. Find out more about our conveyancing services for buyers.
This article is general information only and is not legal advice. It reflects NSW law at the date of publication. Please contact us for advice about your circumstances.
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