Guide
Off the plan finance in Perth. What to check before you sign.
Off the plan apartments are one of the new build types that preserve negative gearing under the 2027 rules. The finance works differently from a standard purchase. Long settlement windows, valuation at completion risk and lender policy differences can catch buyers out. This guide covers what matters before you exchange.
- Founded by two former bankers
- Commercial and business finance specialists
- Perth based, working Australia wide
- MFAA member
Why off the plan is relevant for investors right now
Under the negative gearing changes announced in the 2026-27 Federal Budget, off the plan apartments and units are one of the specific new build types that keep full negative gearing treatment against wages. For investors buying residential property after 12 May 2026, this distinction shapes the after-tax return on every purchase. An established apartment loses the wage offset from 1 July 2027. An off the plan apartment does not. The tax position has changed, and the finance needs to be structured around it.
Perth's off the plan market is active across inner and middle ring suburbs where land supply is limited and density is the practical way to add stock. Developments in areas like Subiaco, Victoria Park, Osborne Park, Cannington and Fremantle attract investors for yield and proximity to employment. The key is understanding how the finance works before you sign a contract, because off the plan purchases carry risks and timing complications that do not apply to standard purchases.
How the finance actually works
An off the plan purchase is structured around two points in time: exchange and settlement.
- Exchange You sign the purchase contract and pay a deposit, typically 10 percent of the purchase price. The deposit is held in a trust account by the developer's solicitor until settlement. Your cash is committed from this point.
- Pre-approval A lender pre-approval at exchange confirms your borrowing position in principle. It will expire well before settlement. Its purpose is to confirm you are likely to be fundable, not to lock in your loan.
- Practical completion When the building is finished and registered, the developer notifies you that settlement is due, usually within 14 to 30 days. This is when the lender orders a valuation of the finished apartment and issues your full approval.
- Settlement The balance of the purchase price is paid, the loan draws down and you take title. The gap between exchange and settlement can be one to three years depending on the development timeline.
Off the plan finance: key facts
| Deposit at exchange | Typically 10% of contract price, held in trust until settlement |
| Pre-approval validity | 3 to 6 months; needs renewal closer to settlement |
| Full approval timing | Issued at or near practical completion |
| Settlement window | Typically 14 to 30 days from practical completion notice |
| Valuation method | As-built value at completion, not the contract price |
| FHOG eligibility | Yes, for eligible first home buyers on new builds up to $800,000 |
| Negative gearing (2027 rules) | Eligible new build type; full treatment maintained |
The valuation risk that catches buyers out
The most significant finance risk in an off the plan purchase is valuation at completion. The lender values the apartment when it is built, not at the time you exchanged contracts. If the market has moved or the development has sold at prices above comparable completed stock, the valuation may come in below the contract price.
When that happens, the lender calculates your loan against the lower valuation figure. If you contracted to buy at $680,000 and the apartment is valued at $620,000, you need to cover the $60,000 gap from your own resources at settlement, on top of the deposit you already paid. Combined with stamp duty and other settlement costs, a valuation shortfall can create significant cash pressure on the day you need to settle.
This risk is greatest when settlement windows are long, when the development is in a corridor that has seen high new supply, or when presale prices were set above comparable completed stock. Perth's apartment market has generally been more stable than Sydney or Melbourne off the plan markets historically, but the risk exists in any presale purchase and should be part of your planning before you exchange.
What lenders assess on off the plan applications
Lenders approach off the plan purchases more cautiously than standard purchases. The assessment covers you, the property and the developer.
- LVR limits. Some lenders cap their LVR on off the plan purchases below their standard limits. 80 percent is common; some lenders will not go above 70 percent on off the plan apartments. This affects how much deposit you effectively need at settlement.
- Developer assessment. Lenders look at the developer's track record, the project's presale rate and whether the development is likely to complete on schedule. Smaller developers or projects with low presale rates attract more scrutiny.
- High density restrictions. Some lenders restrict lending in developments above a certain number of storeys or unit count, particularly in markets they assess as at risk of oversupply. This can limit which lenders will write the loan.
- Re-assessment at completion. Your income, expenses and the lending policies that applied when you pre-approved are reassessed at the time you need full approval. If your circumstances have changed or lending policy has tightened, the outcome may differ from your original pre-approval.
The lender match matters here. Not every lender is equally comfortable with off the plan, and the one with the best rate may have the most restrictive off the plan policy. A broker checks lender appetite for the specific development before you exchange, not after.
Frequently asked questions
How does off the plan finance work in Perth?
You sign a purchase contract and pay a deposit, typically 10 percent, before the building is constructed. The deposit is held in trust until settlement. Finance approval happens in two phases: a pre-approval at exchange and a full approval closer to completion once the building is valued as-built. Settlement occurs at practical completion, which can be one to three years after exchange. You pay nothing further until settlement, but the finance needs to be current and in place at that point.
What is valuation at completion risk?
When the building is finished, a lender values the apartment at its current market value, not your contract price. If the valuation comes in below what you contracted to pay, the lender calculates your loan against the lower figure and you cover the gap from savings or equity on top of your original deposit. This risk is greater when settlement windows are long or when local market conditions have shifted since exchange.
Does an off the plan apartment qualify for the First Home Owner Grant in WA?
Yes. Off the plan apartments and units are new builds, and the WA First Home Owner Grant of $10,000 applies to eligible new builds up to $800,000 in combined value. The grant is paid at settlement, not at exchange. Eligibility conditions apply including that you have not previously owned residential property and that you intend to live in the property within 12 months of settlement.
How do the 2027 negative gearing changes affect off the plan purchases?
Off the plan apartments and units are an eligible new build type under the rules announced in the 2026-27 Federal Budget. For investors buying after 12 May 2026, off the plan purchases maintain full negative gearing against wages under the announced changes. Properties owned before 12 May 2026 are grandfathered. The legislation has not yet passed; speak to your accountant to confirm your position before exchanging contracts.
What happens to my finance approval if the building is delayed?
Standard finance approvals expire, typically within three to six months of issue. For an off the plan purchase with a long settlement window, you will need to re-apply closer to the completion date. Lenders assess you again at that point using the income, expenses and lending policy current at the time of the new application. If your circumstances or the lending environment have changed, the outcome may differ from your original pre-approval.
General information only and does not consider your objectives, financial situation or needs. Tax outcomes depend on your circumstances: confirm your position with a registered tax agent or accountant before signing any purchase contract. Lending criteria, terms and conditions apply.
Get started
Want to talk it through?
Book a meeting or make an enquiry. We'll tell you whether it's fundable, how we'd structure it, and which lender we'd take it to. No obligation.