Taking the punt on a yet-to-be-built property

New Law

The first home owners grant (FHOG) is set for some changes in the new financial year. As of July 1st 2013 the current $7000 grant will be lifted to $10000. But there’s a catch. You must be purchasing a new home, or a home off the plan. 

If you are buying an established home, you get nothing. Nada (although you will have access to stamp duty concessions). 

The idea behind this is essentially to stimulate employment in the building industry and to help with the shortage of dwellings by getting new places built. 

So is it worth it? If $10000 helps a young couple get into the market then it might well be. They might otherwise be priced out of the market.

Buying a property off the plan or one that is yet to be built can be exciting but does come with some risks too. Here’s a look at the benefits and risks of grabbing that $10000 FHOG by buying a new property: 


  • In Victoria, if you buy a house and land package or a multi lot horizontal development (i.e. an apartment) you’ll only pay stamp duty on the land, which can save you thousands of dollars
  • Your brand new shiny $10000 FHOG
  • By the time your new property is built, it might already be worth more than you paid for it
  • It gives you more time to save the deposit…while there is a small initial deposit needed, the entire deposit isn’t required to be put down until the property has been built
  • In Australia there’s a 7 year builders guarantee for structural or building faults


  • By the time your new property is built the market as a whole or your area itself might have fallen in value since you signed the contract
  • The finished building might fall short of your expectations. With all that time to get excited and picture your wonderful new property while it’s being constructed, it might end up not looking or feeling how you imagined and being a disappointment
  • Interest rates might go up by the time you settle on the property
  • The developer might go bankrupt before the project is completed, and unless you’ve got some guarantees in place you could lose your deposit


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