KEY TAKE-OUTS: What is an “off-the-plan” purchase When is Transfer (Stamp) Duty payable First Home Buyers Assistance Scheme (FHBAS) for “off-the-plan” purchases What is an “Off-the-Plan” purchase? Put simply, an off-the-plan purchase occurs when a buyer enters into a contract to purchase a residential property that has not yet been constructed. The agreement is based on the plans, drawings, and specifications outlined in the Contract for Sale, and can also relate to strata or community title developments. A house and land package may be classified as an off-the-plan purchase if: You are buying a dwelling that has not yet been built, and The contract of sale relates to both the land and the future home, not just the land. What is NOT considered off-the-plan If your purchase involves two separate contracts, one for the purchase of the vacant land, and a second separate building contract to construct your home, then it’s not considered an off-the-plan purchase for Transfer Duty purposes. It is important to note that Real Estate Agents or Developers may use the term “off-the-plan” to describe the sale of unregistered land or transactions involving separate land and building contracts. Such arrangements are not classified as off-the-plan contracts under the NSW Duties Act 1997, and as a result, Transfer Duty deferral provisions do not apply. If you are purchasing vacant or unregistered land: Transfer Duty will only be paid on the land The duty is payable within three months of the land contract date or settlement (whichever occurs first) The construction contract (for the house) is not subject to transfer duty When is Transfer Duty due on off-the-plan purchases? Under the Duties Act 1997 (NSW), Transfer Duty is due the earlier of settlement or three months from the contract date. However, if you’re buying off-the-plan and intend to use the property as your principal place of residence (PPR), you may be entitled to a Transfer Duty payment deferral until the earlier of settlement or up to 15 months after the contract date. How to qualify a Transfer Duty deferral You must be an Australian citizen or permanent resident The property must be intended as your principal place of residence (not an investment) You must occupy the property within 12 months of completion You must live in the property for at least 12 continuous months You can read more about buying off-the-plan on the Revenue NSW website. First Home Buyer Assistance Scheme and Transfer Duty deferral If you’re a first home buyer purchasing off-the-plan, you may be eligible for the First Home Buyers Assistance Scheme (FHBAS), which provides either a full or partial exemption from Transfer Duty. Current thresholds are: Full exemption: For new homes valued up to $800,000 Concessional rate: For new homes valued between $800,000 and $1,000,000 If you are eligible for an exemption or concession, you may also be eligible for a Transfer Duty payment deferral as outlined earlier. You can read more about the First Home Buyer Assistance Scheme here. Remember, it is important to check your eligibility early as late Transfer Duty payments will incur penalties and interest. Need guidance on buying off-the-plan or understanding your transfer duty obligations? Whether you’re a first-home buyer, investor, or purchasing a house-and-land package, the Conveyancing Team at Coutts Lawyers & Conveyancers can help you understand your eligibility, avoid penalties, and navigate your contract with confidence. ABOUT NELLY TONG Nelly joined the Coutts Property Law and Conveyancing team in March 2024, working from our Campbelltown Office. Nelly has acquired her Conveyancing Studies at Macquarie University with Distinction. For further information, please don’t hesitate to contact: Nelly Tong Conveyancer info@couttslegal.com.au 1300 268 887 Contact Coutts today. This blog is merely general and non-specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you. Contact Us