What does buying off the plan mean?

Urban Concepts promotes selling off-the-plan as it provides the purchaser with several advantages. For example, the purchaser can secure a property at a discounted price.  In addition, the property, when completed, can be worth more than the original purchase price. Purchasers can also potentially make alternations to plans prior to construction and can choose from a selection of interior finishes.

Buying off the plan has become more commonplace in Western Australia. When you buy off the plan you commit to a property before it is built. In the case of Urban Concepts, you pay an upfront 10% deposit and when the building is completed (usually 12 months later) the remainder is due.

The benefits of buying off the plan are:

  • You pay a lower price because the developer offers discounts to achieve a certain amount of pre sales.
  • You lock in at the initial and lowest price. This is a fixed price which includes all the finishes and fittings as outlined in the contract.
  • In most cases, by the time the development is built, it is worth more than the original, off the plan price.
  • You only pay a 10% deposit with the remainder not due for 6-12 months.
  • You can potentially customise the interior to suit your requirements and taste.
  • Many of our buyers use deposit bonds if they do not have access to the deposit straight away.
How does Urban Concepts work?

The start of the process is finding a site to develop. Our formula is to select a location in a prime inner city area where there is low supply of land (and therefore developments), while at the same time a proven high demand for a particular type of accommodation.

Once the site is located, a concept is created based on what market research tells us will work on that particular site. The proposed development must enhance the area in which it is located and ultimately enhance the lifestyle of the people that will inhabit it.

Once the concept is created and has been deemed feasible, an architect is commissioned to develop a scheme. Then, when all the requisite approvals are in place we go to the market and sell the individual properties off the plan.

Urban Concepts specialises in ‘boutique’ developments, that is, developments that comprise 25 units or less. One of the problems with larger developments is the inability to create a point of difference. Should the property market take a downturn there can be a high amount of properties for sale or for rent and the market will determine the ultimate selling price. In a buyers' market this could mean a substantial discount to the asking price.

A word on capital growth…

We tend to steer away from developments in the inner city where there is a large supply (if not an oversupply) of apartments. We look for areas that have long term capital growth where demand is greater than supply because capital growth of a property increases when there is scarcity.

The areas we look for are near to the city suburbs that are either established or emerging. These tend to have a balance of development to ‘green space’ with major amenities such as banks, a post office, supermarkets, shops, schools, public transport and so on.

What are mixed-use developments?

Mixed-use developments are those that combine commercial and residential spaces within the one complex. In most of our developments, offices and retail spaces occupy the ground floor areas with apartments on upper floors. In our Quorta development in Subiaco, there are 6 commercial suites on the ground floor facing Rokeby Road that house a shop, medical suites and offices. On the second and third floors there are 12 apartments. At the rear of the development there are 9 two and three level terrace houses.

The advantages of mixed-use developments are:

  • Increased security - the commercial suites are occupied by day and by night the residences are occupied potentially increasing surveillance of your property.
  • Increased street activity and interest - mixed-use developments add atmosphere and street life, appealing to many people who are seeking an alternative to the traditional suburban lifestyle.
  • Convenience – living in an inner city location means residences and offices are conveniently located near all amenities, restaurants, cafes, schools, universities, freeways, public transport etc.
  • The “work from home” phenomena - many people are attracted to the idea of combining their living and working spaces...occupying an office and living above in an apartment.
Deposit Bonds

Deposit bonds act like an insurance bond in the case of purchasing property. If a potential buyer does not have access to the 10% deposit that is required to buy an Urban Concepts’ property, we can accept a deposit bond as payment of the deposit.

These are arranged easily through a financial adviser or institution. Deposit bonds incur a minimal fee but they enable a buyer to secure a property immediately rather than in six months time when the price of the property may have increased. The purchaser needs to provide evidence of income, assets and liabilities.

What happens to my deposit?

When you buy an Urban Concepts property your deposit goes to a nominated settlement agent – it does not go to us. The settlement agent holds your deposit in trust. It can be arranged that your deposit goes into an interest bearing account so you get the benefit of interest over the term. It may only work out to be a small amount but we figure your money may as well be working for you while it is in trust.

Can I use my Self Managed Super Fund (SMSF) to buy investment property and off-the-plan?

Yes. More and more people are successfully using their SMSF to buy investment property. Many lending institutions now offer packages to set the fund up economically in conjunction with mortgage services.

Contact your financial adviser or accountant for further professional advice or contact us and we can provide referrals.

Can I buy and sell before settlement to make some ‘quick money’?

Some people ask if they can buy off the plan and then sell at settlement (i.e. when the building is completed) to make some money quickly. This can be done and is perfectly legal however, in Western Australia, stamp duty is payable prior to settlement. Often there is a substantial capital increase between pre-construction and settlement. Smart investors use this equity wisely by utilising their increased borrowing power towards their next investment property. We recommend that buying off the plan – as is the situation for buying any property, is of greatest benefit when it is a medium to long term investment. This is not to say property cannot be a short term investment, rather, it is a better investment if it is medium to long term.

Are there any advantages in buying a property in a company name as opposed to an individual’s name?

In Australia the maximum company tax rate is 30% while the maximum personal tax rate is 45% so in some circumstances the use of a company structure may be warranted. A professional accountant or qualified and licensed financial planner should be consulted to ensure the appropriate structure is used.

What is stamp duty and when is it due?

Stamp Duty is a tax or duty that must be paid on all property bought within the state of Western Australia. It is charged by and payable to the Office of State Revenue. For off the plan purchases stamp duty is not payable until the strata title issues at completion of the development.

For more information, click through to the stamp duty section on the Office of State Revenue’s website: 


What other costs are involved when buying off the plan?

As discussed above, to buy an Urban Concepts property the deposit is payable on signing a contract with the balance not due until building completion, settlement and hand over of title.

Cost of property (including GST) plus:

  • Stamp duty (one of payment)
  • Land tax
  • Council rates
  • Strata fees
  • Electricity, gas, water etc

These costs are the same whether you buy off the plan or your buy an existing property with the exception of strata fees.

What do strata fees cover?

Strata fees are charged to all owners on a quarterly basis by the strata manager (who is appointed to manage the complex).

Strata fees cover building insurance (owners need only arrange their individual contents insurance), common electricity, pest control, common water consumption, general cleaning and cleaning materials, maintenance and repairs of common areas, common garden maintenance, management fees to the strata company and so on.

These are calculated proportionately to the strata area purchased. With each development a council of owners is appointed to oversee the running of the complex to ensure that budgets are adhered to and the complex is appropriately managed.

Are there any tax savings?

New buildings can qualify for significant tax depreciation savings. Investors (as opposed to owner occupiers) are entitled to these tax benefits. For each development, Urban Concepts will commission a Quantity Surveyor to compile a building depreciation schedule. The Quantity Surveyor is familiar with the different depreciation rates applicable on the different components of the total building. Properties bought for investment may allow the owner to claim any loss on the investment against other income earned. This is commonly known as ‘negative gearing’. Buyers should seek independent advice on this as the circumstances will differ with each different development. Urban Concepts can put you in touch with experts in the areas of taxation and depreciation.

Can I choose my own finishes?

When buying off the plan, purchasers have the opportunity to customise the interior of their apartment within the structural constraints of the building. For each project we appoint interior designers to put together several colour schemes using the latest textures and finishes on the market. Purchasers are then invited to choose a colour scheme for their apartment. A Schedule of Finishes for each apartment is also available detailing fixtures and fittings and whitegoods.

Is there a building warranty?

Builders that work with Urban Concepts are required to provide a six year structural warranty.

What if the building doesn’t go ahead?

If for some reason, the development does not go ahead, your deposit will be repaid to you in full.

Defects period

Every project has a 12 month defect period from the point of building completion. In this time, if anything goes wrong in your apartment i.e. the oven doesn’t work, cracks appear in the walls etc the builder will repair and make good. To this effect, retention monies are held i.e. the builder and sub contractors are not paid in full until the 12 month period is up.

All new buildings need 6 to 12 months to settle. This is one of the reasons why a defects period is provided.

Does the first home owners grant apply?

If you are eligible for the First Home Owner's Grant it does apply. For more information, click through to the First Home Owners section on the Department of State Revenue’s website: