Beginner's guide to off-the-plan buying for police

Buying off-the-plan means you exchange contracts before construction starts, then settle 12 to 24 months later when the property is finished.

The deposit structure is different. You typically pay 10% at exchange, but settlement and the remaining 90% don't happen until completion. That gives you time to save, which matters when you're managing shift work and overtime income that can fluctuate. The Australian Government 5% Deposit Scheme works with off-the-plan purchases, so you can secure the property with 5% down and use the deferred settlement period to build your savings before the full loan gets drawn.

The stamp duty position varies by state. In Victoria, duty on off-the-plan strata contracts signed before 31 October 2026 is calculated on land value only, which can reduce the upfront cost by tens of thousands. In the ACT, off-the-plan unit purchases settled from 1 July 2026 attract no duty at all if you occupy the property as your home. In Queensland and South Australia, first home buyers purchasing new builds receive full stamp duty concessions with no price cap from 1 May 2025. The concessions compound when you layer them with the 5% Deposit Scheme, but the timing of exchange, settlement, and when you access each concession matters.

How the 5% Deposit Scheme works with off-the-plan contracts

The 5% Deposit Scheme requires you to exchange with a 5% deposit and settle with Housing Australia's guarantee covering the gap to 20%. With off-the-plan purchases, you exchange now and settle when construction completes, often 18 months later. Your pre-approval needs to account for that delay. Lenders will reassess your income, employment, and financial position closer to settlement, so any changes to your roster, overtime, or debts during construction can affect final approval.

Consider a constable purchasing a two-bedroom apartment off-the-plan in Brisbane for $650,000. At exchange, the buyer pays $32,500 using the 5% Deposit Scheme. The contract settles 20 months later when the building is finished. At settlement, the buyer needs to provide evidence of stable income, updated payslips, and proof of savings for settlement costs including legal fees and adjustments. If the buyer took on additional debt or reduced overtime hours during construction, the lender may require additional documentation or adjust the loan structure before final approval.

You cannot apply for the 5% Deposit Scheme directly. Applications go through participating lenders, and not all lenders treat shift penalties, overtime, and allowances the same way when assessing your income. Some will include 100% of your overtime if it has been consistent for three months. Others average it over 12 months or exclude it entirely. When settlement is 18 months away, the lender you apply with at exchange must be confident your income will still support the loan at completion.

Stamp duty concessions and how they apply at exchange versus settlement

Stamp duty liability is triggered at exchange in most states, but the calculation method and exemptions vary depending on whether the property is off-the-plan, what state you are buying in, and when you signed the contract.

In Victoria, off-the-plan strata contracts signed before 31 October 2026 have duty calculated on the land value component only, not the full contract price. This applies to a broader group of buyers, not just first home buyers, during the eligible period. If the apartment contract price is $600,000 and the land value is $180,000, duty is calculated on $180,000. If you are also a first home buyer and the total contract price is under $600,000, you receive a full duty exemption under the first home buyer rules, and no duty is payable. If the contract price sits between $600,001 and $750,000, the sliding scale concession applies instead.

In the ACT, off-the-plan unit purchases settled from 1 July 2026 attract no conveyance duty if you occupy the property as your principal place of residence for at least one year starting within 12 months of completion. This exemption has no property value threshold and no income cap. The prior cap of $1,020,000 that applied to contracts exchanged before 1 July 2026 has been removed. First home buyers in the ACT purchasing off-the-plan units from 1 July 2026 can combine this exemption with the federal 5% Deposit Scheme, which means no duty and no Lenders Mortgage Insurance on a 5% deposit.

What happens if your income or circumstances change before settlement

Lenders reassess your application before final settlement. If you exchanged 18 months ago and your base salary, allowances, or overtime has changed, the lender will request updated payslips and a new employment letter. They will also check your credit file again and review any new debts or changes to your financial position since exchange.

In a scenario where a senior constable exchanged on an off-the-plan townhouse using projected income including regular overtime, then moved to a role with reduced shift penalties six months before settlement, the lender may reassess borrowing capacity. If the reduced income no longer supports the original loan amount, the buyer would need to increase the deposit, reduce the loan amount, or provide evidence of other income sources such as a partner's salary or rental income from another property. This is one reason we regularly review your loan structure during the construction period, not just at exchange.

Your deposit is typically held in a trust account or released in stages to the developer. If the contract allows for progress payments, the lender may require updated valuations and inspections before releasing funds at each stage. If construction is delayed beyond the original sunset date, you may have the right to rescind the contract depending on the terms, but you would forfeit your deposit unless the delay breaches a condition that protects the buyer.

First home owner grants and how they apply to off-the-plan purchases

Most state grants apply to new homes only, and off-the-plan purchases qualify because the property has not been previously occupied. Grant amounts and eligibility vary by state. Queensland offers $15,000 for new homes valued under $750,000 for contracts signed from 1 July 2026. South Australia offers $15,000 for new homes with no price cap for contracts entered into from 6 June 2024. Victoria, New South Wales, and Western Australia each offer $10,000 for eligible new builds.

The grant is usually paid at settlement, not exchange. You need to apply through your state revenue office before or shortly after settlement, depending on the jurisdiction. The funds can be used to reduce your loan amount or cover settlement costs, but they are not available upfront to contribute to your deposit at exchange unless you arrange a grant advance through certain lenders. Not all lenders offer grant advances, and those that do may charge a fee or require the grant to be assigned to them as security.

In the Northern Territory, the HomeGrown Territory Grant of $50,000 applies to new home contracts signed by 30 September 2027, which makes off-the-plan purchases in Darwin or regional NT particularly attractive for first home buyers when combined with the federal 5% Deposit Scheme and the Territory Home Owner Discount on stamp duty.

Occupation requirements and how they affect your loan approval

Most first home buyer concessions require you to occupy the property as your principal place of residence within 12 months of settlement and remain there for a minimum period, usually 6 to 12 months depending on the state. If you plan to rent the property out after settling, you will not qualify for the concessions, and duty will be payable at the standard investor rate.

If you are stationed in a regional area at the time of exchange but expect to transfer closer to the city before settlement, you need to confirm with the revenue office whether your intended occupation timeline satisfies the residency requirement. Some states allow a 12-month window to move in after settlement, which can accommodate a delayed transfer, but others require occupation within a shorter period. If you fail to meet the residency condition, the concession is clawed back and you will be liable for the full duty amount plus interest and penalties.

Lenders also assess whether you intend to occupy the property. If the property is located in a different state to your current posting, the lender may ask for an employment letter confirming your transfer or a statutory declaration explaining your intention to relocate. If the explanation is not credible, the lender may treat the purchase as an investment loan, which attracts a higher interest rate and stricter serviceability assessment.

Risks specific to off-the-plan purchases and how to manage them

The developer may not complete construction on time. Most contracts include a sunset clause that allows either party to terminate if completion does not occur by a specified date, usually 24 to 36 months from exchange. If the developer terminates under the sunset clause, your deposit is refunded but you lose the benefit of any price growth during the construction period. If you terminate because the developer has breached the contract, you may be entitled to compensation, but this depends on the terms and the reason for delay.

The valuation at settlement may come in lower than the contract price. Lenders will order a valuation before final approval, and if the property is valued below the purchase price, the loan amount may be reduced. You would need to make up the difference with additional savings or negotiate with the developer to reduce the price, which is rarely successful. This risk is higher in markets where property values have declined during the construction period.

You cannot inspect the finished property before exchanging. You are buying based on plans, renders, and a display suite that may not reflect the final build quality or finishes. Some contracts allow for minor variations, which means the developer can change materials, layouts, or specifications without your consent. You should engage a solicitor or conveyancer who specialises in off-the-plan contracts to review the terms before exchange, particularly clauses related to variations, defects, and sunset dates.

Combining low deposit options with off-the-plan purchases

Several lenders on the 5% Deposit Scheme panel accept off-the-plan contracts, but not all assess police income the same way. Some will include 100% of your base salary and 80% of allowances and overtime if evidenced over three months. Others will average your total income over 12 months and exclude irregular payments. The difference can affect how much you can borrow and whether you can service the loan at settlement when the lender reassesses.

If you have a family member willing to provide a guarantee, you may be able to use a guarantor loan instead of the 5% Deposit Scheme. This allows you to borrow the full purchase price without paying Lenders Mortgage Insurance, and the guarantor's property acts as additional security until you build enough equity to release them. Guarantor loans work with off-the-plan purchases, but the guarantor needs to understand that their liability continues until settlement, which may be 18 months or more after exchange.

If you are using the Help to Buy scheme, the Australian Government contributes up to 40% of the purchase price for a new home in exchange for equivalent equity. You need a minimum 2% deposit and must meet the income limits of $100,000 for individuals or $160,000 for joint applicants. Help to Buy cannot be combined with the 5% Deposit Scheme, but it can be used alongside state grants and stamp duty concessions in most jurisdictions. The shared equity arrangement continues until you buy out the Government's share or sell the property, and you will need to have the property revalued at that time.

Call one of our team or book an appointment at a time that works for you. We work around your roster and can meet after hours or between shifts to review your deposit options and confirm which concessions apply to your contract before you exchange.

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