Beginner's Guide to Off-the-Plan Buying in Craigieburn

Buying Off-the-Plan as a First Home Buyer in Craigieburn

Buying off-the-plan means signing a contract to purchase a property before it's built or completed. You commit to a purchase price now, settle when the property is finished, and the value at completion may differ from what you paid.

Craigieburn has seen steady development in recent years, particularly around Atherstone, Cloverton and Mount Ridley. Off-the-plan townhouses and apartments continue to attract first home buyers drawn to the area's proximity to schools, parklands like Highlands Regional Park, and the Hume Freeway. The appeal is often a lower entry price compared to established homes, combined with access to state concessions that reduce or remove stamp duty on new builds.

The question most buyers face is whether to lock in now at a set price or wait and buy something already built. The answer depends on how much deposit you have, whether you're eligible for Victorian first home buyer concessions, and how long you're willing to wait before moving in.

How the Deposit Works When You Buy Off-the-Plan

You pay a deposit when you sign the contract, not when the property is built. That deposit is typically 10% of the purchase price and is held in a trust account until settlement. The property may not be completed for 12 to 24 months, sometimes longer.

Consider a buyer purchasing an off-the-plan townhouse with a contract price of $520,000. The deposit of $52,000 is paid at contract signing. The buyer won't need the remaining 90% until settlement, which might be 18 months away. During that time, the buyer continues saving and applies for pre-approval closer to the expected completion date. Lenders generally won't hold pre-approval open for 18 months, so timing the application is important.

Some developers allow a 5% deposit at contract and a second 5% deposit on a later milestone, such as when the slab is poured. The structure depends on the developer and the project. Buyers using the Australian Government 5% Deposit Scheme need to confirm the deposit structure meets the lender's requirements, as some participating lenders require the full deposit to be paid upfront rather than in stages.

First Home Buyer Stamp Duty Concessions in Victoria

Victoria offers a full stamp duty exemption on properties valued up to $600,000 and a sliding scale concession on properties valued from $600,001 to $750,000. Standard rates apply above $750,000. This concession applies to both new and established homes where the buyer will live in the property as their principal place of residence.

For off-the-plan contracts signed on or before 31 October 2026, an additional concession applies. Duty is calculated on the land value at the date of contract only, not the completed property value. This off-the-plan concession is available to all buyers, not just first home buyers, during the eligible period.

A buyer signing a contract for a townhouse in Craigieburn with a total contract price of $520,000 may find the land value at contract date is assessed at $350,000. Stamp duty is calculated on that $350,000 figure. If the buyer qualifies for the first home buyer exemption, the duty may be reduced to nil. If the buyer is not a first home buyer but the contract is signed before 31 October 2026, duty is still calculated on the land value only, reducing the upfront cost significantly.

The First Home Owner Grant in Victoria

Victoria provides a $10,000 grant for first home buyers purchasing a new home valued up to $750,000. The grant does not apply to established homes. Off-the-plan purchases are classified as new homes and are eligible.

The grant is paid after settlement, not at contract signing. Buyers need to lodge the application within 12 months of settlement. The $10,000 can be applied toward settlement costs or used to reduce the loan amount, but it's not available to help fund the deposit at contract stage.

You must move into the property within 12 months of settlement and live there for at least 12 continuous months. If you don't meet the residency requirement, you may need to repay the grant.

When to Apply for Finance and How Long Pre-Approval Lasts

Lenders assess your application based on your financial position at the time you apply. Pre-approval is generally valid for three to six months. If your off-the-plan property won't settle for 18 months, applying for finance at contract signing means your pre-approval will expire long before you need it.

The approach most buyers take is to obtain conditional approval or informal approval early, then submit a full application closer to the expected settlement date. This allows the lender to assess the current value of the property, confirm your income and employment are still stable, and ensure lending policy hasn't changed.

Some lenders require a formal valuation before settlement. If the completed property is valued below the contract price, the lender will base the loan on the lower figure. A buyer who contracted to purchase at $520,000 but receives a valuation of $490,000 at completion will need to make up the $30,000 difference in cash or renegotiate with the developer. This is uncommon in established suburbs with steady demand, but it does happen in oversupplied markets or where construction has been delayed.

How the Australian Government 5% Deposit Scheme Applies to Off-the-Plan Purchases

The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance. The scheme applies to both new and established homes, including off-the-plan properties, provided the purchase price and the lender's assessed value are at or below the applicable price cap.

For Victoria, the price cap is $950,000 in capital city and regional centres, and $650,000 in other areas. Craigieburn falls within the Melbourne metropolitan area and is subject to the $950,000 cap.

Applications are made through a participating lender, not directly through Housing Australia. Each lender has its own credit policy, and not all will accept off-the-plan purchases under the scheme. Buyers need to confirm eligibility with their lender early, particularly if the settlement date is more than 12 months away. The scheme does not set income limits, but lenders still apply standard serviceability tests.

What Happens If the Property Value Changes Between Contract and Settlement

When you sign an off-the-plan contract, you agree to a fixed purchase price. If property values rise during construction, you benefit. If values fall, you're still obligated to pay the contract price.

Lenders assess the property at completion, not at contract date. If the completed property is valued below the contract price, the lender will base the loan amount on the lower valuation. The difference must be covered by additional savings or negotiated with the developer.

In a scenario where a buyer contracts to purchase a townhouse for $520,000 and the valuation at completion comes in at $510,000, the buyer needs to cover the $10,000 gap in cash or request the developer reduce the contract price. Some contracts include a sunset clause that allows either party to walk away if construction isn't completed by a specified date, but these clauses vary and should be reviewed by a conveyancer or solicitor before signing.

Offset Accounts and Loan Features on Off-the-Plan Purchases

Most lenders offer variable rate home loans with offset accounts, and many also offer fixed rate loans with limited or no offset. The loan features available depend on the lender and the product you choose.

An offset account can be useful if you're buying off-the-plan and continuing to save between contract and settlement. Once the loan is active, any balance in the linked offset account reduces the amount of interest you pay. A buyer with a $470,000 loan and $20,000 in an offset account pays interest only on $450,000.

Some buyers prefer a split loan structure, fixing part of the loan for rate certainty and keeping the rest variable with an offset. This depends on your circumstances and how interest rates are moving at the time of settlement. Discussing home loan options early helps you understand what's available and what suits your situation.

What You Need to Know Before Signing the Contract

Once you sign an off-the-plan contract, you're generally committed. Cooling-off periods may apply depending on how and where the contract was signed, but they're short and may involve a penalty. The contract should be reviewed by a solicitor or conveyancer before you sign.

Key details to confirm include the expected completion date, the sunset clause, what happens if construction is delayed, how progress payments or staged deposits are structured, and whether the contract price includes appliances, landscaping or other inclusions. These details vary by developer and by project.

You also need to confirm your eligibility for any state concessions or grants before committing. If you've previously owned property, even an investment property, you may not qualify as a first home buyer under Victorian rules. If you're applying with a partner, both of you must meet the eligibility criteria.

Buying off-the-plan in Craigieburn can offer value, particularly with access to stamp duty concessions and the First Home Owner Grant. The process takes longer than buying an established home, and you need to plan your finance application around the expected settlement date rather than the contract date. If you're weighing up whether to buy off-the-plan or purchase an established property, call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions