Key points
- Many off-the-plan contracts allow a nomination or assignment before settlement, but not all.
- The developer's consent is usually required, and fees may apply.
- Stamp duty, tax and legal costs vary by state, so get advice early.
- If nomination is not possible, you can still prepare to sell the moment the property settles.
The short answer
In many cases, yes. When you buy off the plan there is often a long gap, sometimes several years, between signing the contract and settlement. Many contracts include a clause that allows the purchaser to nominate another buyer or assign the contract before settlement, usually with the developer's consent.
Whether it's possible for you depends on the wording of your contract, the developer's position, and the rules in your state.
Why people sell before settlement
- A change in finances, employment or family circumstances
- A bank valuation at settlement that is lower than the purchase price (a valuation shortfall)
- Changes in lending conditions
- Relocating interstate or overseas
- Changing investment strategy or taking an opportunity elsewhere
Your main options
1. Nominate a new buyer onto the contract
If your contract allows it, a new buyer can be nominated to complete the purchase in your place. The new buyer settles with the developer. You will usually need the developer's written consent and may have to pay an administration fee.
2. Assign or transfer the contract
Some contracts allow an assignment, where your rights under the contract are transferred to a new buyer. The process and costs can differ from a nomination, so ask your solicitor or conveyancer which applies to you.
3. Sell immediately after settlement
If nomination isn't available, you can prepare your marketing in advance so the property is ready to sell the moment it settles. This can reduce holding costs.
What to check in your contract
- Is there a nomination, assignment or "sale before completion" clause?
- Does the developer need to consent, and are there conditions or fees?
- Are there restrictions on advertising the property before settlement?
- What is the expected completion date and any sunset date?
- How the deposit is handled if the contract is nominated or assigned
Costs and tax to consider
Depending on your state and contract, there may be developer fees, legal costs and stamp duty implications, and possibly capital gains tax on any profit. These rules differ between states and change over time. Always get advice from a solicitor or conveyancer and an accountant before you proceed.
How we help
Our Australian-based agents, with 5 to 45+ years of experience, work alongside your solicitor or conveyancer. We help you understand your options, find a suitable buyer from our network of investors, builders, developers and land banking investors in Australia and overseas, and manage the marketing with our specialist team.
Frequently asked questions
Do I need the developer's permission to sell before settlement?
Usually, yes. Most off-the-plan contracts require the developer's written consent to nominate or assign, and some charge a fee. Check your contract with your solicitor or conveyancer.
Will I pay stamp duty twice?
It depends on your state, the contract and how the sale is structured. Duty rules differ around Australia, so get advice from your solicitor or conveyancer before proceeding.
This guide is general information only and doesn't consider your circumstances. It is not legal, tax or financial advice.