Vendors selling property off the plan often have similar questions. Let’s address some of the more common ones.
You can sell property off the plan before you settle your purchase. Naturally, the off the plan contract will be conditional on the vendor settling their purchase of the development site. This can be dealt with in the special conditions.
You can sell property off the plan before you have a planning permit. Again, the off the plan contract will need to be conditional on getting the planning permit and also make some allowance for any variations that may be required by council as a condition of getting the permit – more special conditions.
The right sunset period may require mortgagee approval. You may believe that you can complete the project within 12 months but if you are reliant on construction funder that requires pre-sales you should take account of the funder’s requirements. Funders often require an additional 12 months or more to cover contingencies.
As a general rule, you can apply the margin scheme for GST purposes as long as you are registered for GST and didn’t pay GST on the purchase price of the development site. GST and tax generally is a complex issue so we recommend that you get specific advice and don’t rely on the general rule.
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If you are contemplating an off the plan contract please contact Lewis O’Brien to discuss your requirements.