Off-the-plan purchases let you lock in a property before construction finishes, often with a smaller upfront deposit and access to duty concessions that don't apply to established homes.
For allied health professionals working in metropolitan or regional hospitals, off-the-plan apartments near major health precincts can offer a practical entry point into the market. The structure of these purchases works differently to buying an existing home, and understanding the deposit requirements, settlement timing, and lender assessment process will help you plan your application with confidence.
How Off-the-Plan Deposits Work
You pay a deposit when you sign the contract, typically 10% of the purchase price, which is held in a trust account until settlement. The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit, and this applies to off-the-plan purchases. The scheme operates through participating lenders who assess your application and arrange the guarantee through Housing Australia.
Consider a physiotherapist purchasing a two-bedroom apartment off-the-plan in a development near a major hospital. The contract price is $650,000. With a 5% deposit, they pay $32,500 at contract signing. The lender assesses their income, which is $95,000 per year, and confirms they meet the serviceability requirements based on the contract price. Settlement occurs 18 months later when construction is complete. At that point, the lender revalues the property to confirm it supports the approved loan amount.
State Duty Concessions That Apply to New Apartments
Victoria offers an off-the-plan concession where duty is calculated on land value at contract date only, and this applies to strata or community title contracts signed on or before 31 October 2026. The concession is available to a broader group of buyers beyond first home buyers during the eligible period. In the Australian Capital Territory, from 1 July 2026, no duty applies to off-the-plan unit owner occupier purchases with no property value threshold. The buyer must occupy the property as their principal place of residence continuously for at least one year commencing within 12 months of completion.
In Western Australia, an off-the-plan rebate of 75% for apartments under construction or newly completed is capped at $50,000. Queensland's full transfer duty concession on new builds from 1 May 2025 has no price cap on residential land, which includes off-the-plan strata purchases. Each state structures the concession differently, so confirming eligibility before you sign the contract is important.
When You Need Pre-Approval and How Long It Lasts
Pre-approval confirms a lender will support your purchase up to a specified amount, subject to property valuation and final assessment at settlement. Most pre-approvals last three to six months, but off-the-plan settlements can occur 12 to 24 months after contract signing. You'll need to renew your pre-approval or obtain formal approval closer to settlement.
Lenders assess your income and employment stability at the time of contract signing and again before settlement. For allied health professionals in permanent hospital or clinic roles, this renewal process is usually straightforward. If you change employers or move from full-time to part-time work between contract and settlement, notify your broker early so they can confirm how the lender will treat the change.
Ready to get started?
Book a chat with a Mortgage Broker at Noble Lending Group today.
How Lenders Value Property That Isn't Built Yet
At contract signing, the lender reviews the development plans, contract price, and comparable sales in the area to assess whether the purchase price is reasonable. At settlement, they order a formal valuation of the completed property. If the valuation comes in below the contract price, the lender may reduce the approved loan amount or require additional deposit funds to maintain the agreed loan-to-value ratio.
In our experience, this valuation shortfall is more common in markets where prices have softened between contract and settlement. Buyers using the Australian Government 5% Deposit Scheme should be aware that the guarantee is based on the lower of the contract price or the valuation at settlement. If the valuation is lower, the shortfall needs to be covered with additional savings or the seller may need to reduce the contract price.
Sunset Clauses and What Happens If Construction Delays
Most off-the-plan contracts include a sunset clause, which allows either party to terminate the contract if settlement hasn't occurred by a specified date. Developers occasionally use sunset clauses to cancel contracts if property values have risen significantly since the original sale, allowing them to resell at a higher price. State legislation in New South Wales, Victoria, and Queensland now requires developer consent or tribunal approval before a buyer can rely on a sunset clause, and similar protections exist in other jurisdictions.
If the developer delays construction beyond the sunset date, you may be entitled to terminate and receive your deposit back, but you'll lose the benefit of any price growth or duty concessions that have since changed or expired. If you've renewed your home loan pre-approval multiple times due to delays, confirm with your lender that the approval remains current and that your financial position still supports the loan.
Combining the First Home Owner Grant With Off-the-Plan Purchases
Queensland offers $15,000 for new homes valued under $750,000 for contracts signed from 1 July 2026. The grant was $30,000 for eligible contracts signed between 20 November 2023 and 30 June 2026. In Tasmania, the First Home Owner Grant is $20,000 for new homes for eligible transactions from 1 July 2026, subject to assent. South Australia provides $15,000 for new homes with no property price cap for eligible contracts entered into on or after 6 June 2024.
The grant is paid at settlement, not at contract signing, so it doesn't reduce the initial deposit you need. However, some lenders will take the grant into account when calculating your savings position and may allow you to use it toward settlement costs or to reduce the loan amount.
What Settlement Costs Look Like on an Off-the-Plan Purchase
Beyond the deposit, you'll pay legal fees, loan establishment fees, valuation costs, and any applicable duty that isn't covered by concessions. Legal fees for off-the-plan contracts are often slightly higher than for established homes due to the additional review required for the development contract and strata documentation. Budget between $2,000 and $3,000 for legal costs, and another $1,000 to $1,500 for loan-related fees depending on your lender.
If you're receiving a duty concession or exemption, the main variable cost is the legal work. If you're combining the First Home Owner Grant with a 5% deposit, the grant funds can help cover these settlement expenses without requiring additional savings beyond your deposit.
Off-the-plan purchases reward buyers who understand the timing, the lender's assessment process, and the state concessions available at contract signing. The structure suits allied health professionals who can demonstrate stable income and who are comfortable committing to a property that won't be ready to occupy for 12 to 24 months.
If you're considering an off-the-plan apartment and want to confirm your borrowing capacity, duty concessions, and deposit options, call one of our team or book an appointment at a time that works for you.
Frequently Asked Questions
Can I use the 5% deposit scheme to buy off-the-plan?
Yes, the Australian Government 5% Deposit Scheme applies to off-the-plan purchases. The lender assesses your application at contract signing and revalues the property at settlement to confirm it supports the approved loan amount.
When do I pay the First Home Owner Grant on an off-the-plan purchase?
The grant is paid at settlement, not when you sign the contract. Some lenders will take the grant into account when calculating your savings position and may allow you to use it toward settlement costs.
What happens if the property valuation is lower than the contract price at settlement?
The lender may reduce the approved loan amount or require additional deposit funds to maintain the agreed loan-to-value ratio. The government guarantee is based on the lower of the contract price or the settlement valuation.
How long does pre-approval last for an off-the-plan purchase?
Most pre-approvals last three to six months, but off-the-plan settlements can occur 12 to 24 months after contract signing. You'll need to renew your pre-approval or obtain formal approval closer to settlement.
What duty concessions apply to off-the-plan apartments?
Victoria calculates duty on land value at contract date only for eligible contracts signed by 31 October 2026. The Australian Capital Territory offers full duty exemption from 1 July 2026 with no property value threshold for off-the-plan units occupied as a principal place of residence.
