Like with many things in real estate, there are pros and cons to all options. The deciding factor, will often come down to what best suits your financial circumstances and lifestyle. That’s why it’s important to know what questions to ask a property developer or sale person.

To help you decide if buying off-the-plan is for you, here we take a look at eight of the most frequently asked questions asked by first-time off-the-plan property buyers.

When buying off-the-plan, you’ll most likely need to pay a 10% deposit when you sign the contract, with the balance due when it’s finished.

Typically the developer receives the interest on the deposit. However, it’s always wise to ask the sales person this question, as often you can negotiate to share part or full payment of the interest with the developer.

Your deposit will be held in a solicitor’s trust account until the project is finished or the registration/sunset period expires.

2. How long does an off-the-plan apartment take to build

Construction times vary depending on the size of the building, with larger apartment developments usually taking longer to build.

The display suite will be a good measure of the quality of your apartment’s finishes, but beyond that, you’ll need to inspect what you expect and ask the sales consultant how your apartment will differ from the display, as there are usually many different apartment types within every building.

Ask whether the display is the same in terms of kitchen, bathroom and bedroom dimensions and layout.

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4. Do you pay stamp duty when buying off-the-plan?

Whether you pay stamp duty or transfer duty on your new off-the-plan apartment will depend on a few things, including what state you have bought in, the price of your new home and whether you’re a first-home buyer, owner occupier, local investor or foreign investor.  

However, most states have incentives and concessions that may reduce your stamp duty. For example, Victoria has the off-the-plan duty concession where the dutiable value of your home (the amount your stamp duty is calculated on) is calculated as the contract price minus any construction costs incurred on or after the contract date. So, if you and your property meet the eligibility criteria for this concession, you’ll pay a lower stamp duty amount.  

5. When is settlement for buying off-the-plan?

Your contract should contain the specific settlement details, but as a general rule of thumb, you will be obligated to settle within in two weeks of the registration of the unit’s plan.

6. Can I get a mortgage to buy off the plan?

Yes, you can get a mortgage for off-the-plan. It’s best to speak to your bank or financial adviser to find a loan that best suits your situation.

It’s worth noting, that fixing your interest rate is one way to minimise exposure to interest rate rises. However, locking in a fixed loan rate may mean you may have to pay break costs if you want to pay out the loan early.

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A variable mortgage means you’re exposed to rate rises. Another option is to take an even way bet and fix part of your loan.

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7. How much are the levies or strata fees for off-the-plan?

A levy is the fee that the owner of an apartment in a strata plan must pay to the Owners Corporation for the management and upkeep of the building and common property.

Levies are generally payable quarterly, with the cost varying from one building to another, depending on the facilities and the number of apartments contributing towards the building’s upkeep.

8. Can I negotiate off-the-plan prices?

While most off-the-plan properties come with a fixed price, vendors might still be open to a negotiation.

Your best bet is to get in early once the properties hit the market – or during pre-sales – as they will likely want to show a good sales rate during the early phase.