Off-the-Plan Conveyancing Sydney: Can Transfer Duty Fall Due Before the Apartment Is Finished?

Yes. In NSW, an off-the-plan purchaser may have to fund transfer duty while the apartment is still under construction. Buyers who do not qualify for the owner-occupier deferral generally face the ordinary three-month payment period. Eligible purchasers can receive up to 12 additional months, but the ultimate deadline is generally 15 months after contract signing, unless settlement or assignment occurs earlier. Sydney buyers should budget from the contract date, not the anticipated handover date.

The Tax Calendar Can Outrun the Construction Program

Off-the-plan buyers often organise their finances around a physical milestone. They expect the developer to finish the apartment, register the strata plan, issue a settlement notice and then call for the balance of the purchase price.

Transfer duty does not always follow that construction sequence.

Revenue NSW states that transfer duty on an ordinary NSW property purchase must generally be paid within three months after the contract is signed, or by settlement where settlement occurs earlier. A qualifying off-the-plan purchaser may receive an additional 12-month deferral. That produces an outer payment date of 15 months from the contract date, even where the building remains incomplete.

The critical operational point is that the duty deadline is generated by the transaction date and the purchaser’s eligibility. It is not automatically extended because concrete works, services, certification, strata registration or internal finishes are running behind schedule.

This is narrower than the general problem examined in Elyment’s analysis of transfer duty deadlines before settlement.

In an off-the-plan acquisition, the buyer may be required to pay a major transaction cost before the individual apartment legally exists as a registered strata lot and before loan funds are available for settlement.

One Purchase Can Be Running on Three Different Clocks

The confusion arises because construction, conveyancing and tax administration do not necessarily use the same milestone.

Construction clock

What controls it: Building progress, approvals, services, inspections, certification and defect rectification
Why it matters: The apartment may remain physically incomplete after the duty timetable has advanced

Contract clock

What controls it: The exchange date, sunset provisions, developer notices, plan registration and contractual settlement mechanisms
Why it matters: Rights and obligations can arise before the buyer receives access or title

Transfer duty clock

What controls it: The contract date, statutory liability rules, purchaser eligibility, settlement and assignment
Why it matters: Payment may be required independently of the developer’s estimated completion date

A sales brochure might nominate completion in “late 2027”, but that estimate does not determine the Revenue NSW deadline. The contract date remains the starting point for calculating the normal payment period and any available off-the-plan extension.

How the NSW Off-the-Plan Deferral Works

The NSW off-the-plan rules provide a payment deferral rather than a reduction in duty. The amount of transfer duty is still assessed under the applicable NSW rules. The concession changes when eligible duty must be paid, not necessarily how much is payable.

For an eligible purchase, Revenue NSW identifies the earliest of the following as the relevant payment trigger:

15 months after the contract for sale was signed
Completion of the property and settlement of the purchase
An assignment of all or part of the purchaser’s interest under the contract

The 15-month period reflects the normal three-month payment period plus up to 12 additional months under the off-the-plan provisions.

Section 49A of the Duties Act 1997 (NSW) governs when liability arises for eligible off-the-plan purchase agreements.

The deferral is not automatic. The conveyancer or solicitor must establish that the contract and every purchaser satisfy the relevant requirements, process the duty assessment correctly and obtain a Notice of Assessment showing the amount and payment date.

Who May Qualify and Who May Still Face the Three-Month Deadline?

Calling a transaction “off the plan” does not, by itself, give the buyer 15 months to pay.

Eligible individual buying the apartment as a principal place of residence

Likely timing position: May qualify for the additional off-the-plan payment period
Review required: Citizenship or qualifying residency, contract structure and occupation intention

Investor purchasing the apartment to rent out

Likely timing position: Off-the-plan deferral is generally unavailable
Review required: Duty may need to be funded within the ordinary three-month period

Company, partnership or trustee purchaser

Likely timing position: Generally ineligible for this particular deferral
Review required: Purchasing entity and beneficial ownership must be checked before exchange

Purchase involving a foreign person

Likely timing position: Deferral may be unavailable and surcharge purchaser duty may also need assessment
Review required: Visa status, ordinary residence and evidence for every purchaser

Vacant or unregistered land without a residence included in the sale contract

Likely timing position: May not satisfy the statutory off-the-plan definition
Review required: The land and building arrangements must be reviewed together

First home buyer

Likely timing position: May have a separate exemption or concession, but eligibility must be assessed independently
Review required: Do not confuse a first home buyer benefit with an off-the-plan payment deferral

Revenue NSW requires eligible purchasers to have a genuine intention to use the property as their principal place of residence.

For contracts exchanged on or after 1 July 2023, at least one purchaser must generally move into the home within 12 months after settlement and occupy it continuously as their principal place of residence for at least 12 months.

Buyers should therefore discuss purchaser names, ownership shares, visa status, trust arrangements and intended use before signing. These are not matters to resolve when the developer announces practical completion.

Elyment’s off-the-plan conveyancing review in Sydney focuses on these contract and purchaser conditions alongside sunset clauses, disclosure documents, variation powers and settlement procedures.

A Sydney Apartment Can Still Be a Construction Site When Duty Is Payable

Consider a purchaser who exchanges contracts on 15 January 2026 for an apartment expected to settle in late 2027.

15 January 2026: Contracts are exchanged and the transfer duty timetable begins.
15 April 2026: The ordinary three-month payment date would arrive if the purchaser were not eligible for the off-the-plan deferral.
15 January 2027: The additional 12-month deferral period reaches its statutory liability point.
15 April 2027: The outer 15-month payment date is reached.
Late 2027: Construction, strata-plan registration and settlement may occur several months after the duty has already been paid.

The buyer in this example could be paying transfer duty while common areas remain unfinished, the strata plan has not been registered and the apartment cannot be occupied.

The expected completion date in marketing material is not a substitute for a documented duty calendar prepared from the actual contract date.

The Funding Gap Is Often More Important Than the Tax Calculation

Transfer duty is frequently treated as one component of the settlement statement. That assumption can fail when duty becomes payable months before settlement.

The lender may not be ready to advance settlement funds because:

The strata lot has not been registered
The bank has not completed its final valuation
The loan approval has expired and must be refreshed
The developer has not issued a settlement notice
The apartment cannot yet be inspected
The lending facility only releases funds as part of the settlement transaction

This can require the purchaser to fund duty from cash reserves before the mortgage is drawn.

In Sydney, that cash may also have been allocated to:

The balance deposit
Moving expenses
Temporary accommodation
Strata levies
Furnishing
Immediate renovation work

The appropriate question for the lender is not simply, “Has my loan been approved?” It is, “Can any part of the approved facility be used to meet a transfer duty deadline that arrives before settlement?”

Buyers should obtain a clear answer well before the Notice of Assessment becomes due. A pre-approval issued when contracts were exchanged may not remain current throughout a two-year development program.

Changing the Purchase Strategy Can Undo the Deferral

The original duty position can change after exchange.

The Buyer Decides to Rent Out the Apartment

A purchaser who obtained the deferral by declaring an intention to occupy the apartment must notify Revenue NSW if that intention changes or the residence requirement cannot be met.

Revenue NSW warns that interest may be calculated from the original three-month due date, with penalty tax potentially applying depending on the circumstances.

One Purchaser Is Added, Removed or Replaced

A nomination, novation, assignment or proposed ownership change may have duty consequences beyond simple contract administration.

Revenue NSW lists an assignment of the purchaser’s interest as an event that can bring the deferred position forward.

A Purchaser’s Foreign-Person Status Was Not Identified

Every purchaser must satisfy the relevant citizenship or residency requirements.

One ineligible purchaser can affect the availability of the deferral for the transaction and may introduce surcharge purchaser duty considerations.

The Purchasing Entity Changes

Moving an acquisition from individual names into a company or trust after the original contract was signed can create legal, lending and duty complications.

The preferred ownership structure should be settled with appropriate advice before exchange, not adjusted as an administrative convenience close to completion.

“Finished” Is Not One Legal Milestone

An apartment may appear substantially complete without being ready for settlement. Joinery, flooring and appliances may be installed while certification, service commissioning, defects, subdivision requirements or plan registration remain unresolved.

The NSW Registrar General explains that an off-the-plan strata unit does not have its own title when the contract is signed. The balance of the price is generally paid after construction and registration, which may occur years later.

NSW off-the-plan protections also require the developer to provide the final registered plan and associated documents at least 21 days before settlement can be compelled.

That document-review period is a conveyancing milestone, but it does not reset an earlier transfer duty deadline.

Buyers should distinguish between:

Physical construction progress
Practical completion under the building arrangements
An occupation certificate or other required certification
Registration of the strata plan
Delivery of the registered documents
The pre-settlement inspection
Contractual settlement
The Revenue NSW duty payment date

Layout and specification changes also run on their own contractual pathway.

Elyment’s analysis of developer changes to off-the-plan apartment layouts explains why the final property may need to be reconciled against the original disclosure material before settlement proceeds.

The Conveyancing File Needs a Duty Control Plan, Not One Settlement Reminder

A long off-the-plan transaction should be managed through scheduled hold points. Relying on one calendar reminder near estimated completion leaves too much room for purchaser circumstances, lender conditions and assessment deadlines to drift.

1. Establish the Contract Date

Record the actual date of exchange or first execution used for the duty calculation. Do not rely solely on the developer’s forecast settlement month.

2. Confirm the Statutory Transaction Type

Verify that the contract is an eligible off-the-plan purchase agreement under the Duties Act, not merely a purchase involving vacant or unregistered land.

3. Review Every Purchaser

Check citizenship, visa status, ordinary residence, ownership capacity, purchasing entity and whether any foreign-person issue requires further evidence.

4. Document the Occupation Intention

Confirm whether the apartment will genuinely become a principal place of residence and whether the purchaser can satisfy the post-settlement occupation period.

5. Process the Assessment Early

The buyer should know the assessed amount and due date well before payment is required. The Revenue NSW Notice of Assessment should be treated as a primary transaction document.

6. Align the Payment Plan With the Lender

Determine whether duty will be paid from savings, a separate facility or another source. Do not assume that settlement loan funds can be drawn early.

7. Recheck the Position When Circumstances Change

A proposed assignment, change of purchaser, overseas relocation, investment decision or revised ownership structure should trigger a fresh duty review.

Why the Deadline Affects Post-Settlement Project Delivery

Duty paid before completion reduces the liquidity available for the next stage of ownership. That can alter what the purchaser can commission immediately after settlement.

For a Sydney strata apartment, the post-settlement plan may include:

Defect inspections and reporting
Acoustic and strata approval for hard flooring
Removal of developer-installed carpet or tiles
Concrete preparation or floor levelling
Painting and joinery coordination
Lighting, window treatment and appliance installation
Moving, storage and temporary accommodation
Initial strata, insurance and utility costs

Buyers should not commit all available cash to renovation deposits while an unresolved duty assessment remains in the background.

Conversely, a duty payment made early may require the renovation scope to be staged rather than commissioned as one immediate package.

Elyment’s residential conveyancing service for Sydney property purchases can be considered alongside NSW transfer duty and conveyancing support where the buyer needs the legal timetable, transaction costs and post-settlement plans reviewed as one operational sequence.

Questions to Put on the File Before Exchange

What exact date starts the transfer duty timetable?
Does the contract satisfy the statutory off-the-plan definition?
Is every purchaser eligible for the payment deferral?
Will the apartment be a genuine principal place of residence?
What is the normal three-month duty date?
What is the final 15-month date if the deferral applies?
Could settlement, assignment or a purchaser change bring the deadline forward?
When will the duty assessment be processed?
Which funds will be used if duty is due before the loan can be drawn?
What must be reported if the purchaser’s occupation intention changes?

Map the Duty Deadline Before Construction Controls the Cashflow

Review the contract date, purchaser status, deferral eligibility, Revenue NSW assessment, lender timing, settlement triggers, assignment risk and post-settlement project plan before financial commitments are locked in.

Request An Off-the-Plan Project Review

The Apartment Does Not Need to Be Finished for the Payment Date to Arrive

An eligible owner-occupier may obtain additional time to pay transfer duty, but the concession is not an indefinite extension linked to the developer’s construction program.

The outer date is generally 15 months after the contract is signed, unless settlement or assignment brings the obligation forward.

Ineligible purchasers may need to pay within the ordinary three-month period, potentially long before the apartment is complete.

The practical response is to create a transaction calendar at exchange, confirm eligibility early, process the assessment correctly and secure a funding source that does not depend entirely on settlement occurring on schedule.

This article provides general information only. Transfer duty outcomes depend on the contract, purchaser circumstances and the law applying to the transaction. Buyers should obtain advice from a NSW solicitor or licensed conveyancer and confirm assessment matters with Revenue NSW.

Sources and References

CONTRACT ASSESS FUND SETTLE OFF-THE-PLAN TRANSACTION REVIEW

Map the duty deadline before construction controls the cashflow.

Book a Duty Review