Pros & Cons of Buying Off The Plans – Is it for you?

off the plan

Are you a first-time homebuyer, looking for the perfect place to call your own? If so, you may have come across the term “buying off the plans.” But what does it mean, and how can it benefit you in your quest for the ideal home?

What is buying “off the plans”?

In a nutshell, buying “off the plans” (OTP) refers to purchasing a property before it has been built or completed. You’re buying based on the plans and specifications provided by the developer. Once you settle on the property, the title is then transferred to your name as per any other property purchase.

Let’s dive into the pros and cons of buying off the plans to help you make an informed decision.


  • Turnkey property: When you buy “off the plans,” you are essentially purchasing a completed house that is ready for occupation. This means you don’t have to worry about construction or finishing touches after settlement.
  • Price agreement: Since the price is agreed upon before the house is built, it eliminates the need for progress payments and provides clarity on the financial aspect of your purchase.
  • Savings and accumulation: While waiting for settlement, you have the opportunity to save money or accumulate funds through schemes like KiwiSaver, maximizing your financial resources during this period.
  • Brand new home: Buying “off the plans” ensures that you receive a brand new home built to the latest building standards. This guarantees modern designs, up-to-date amenities, and adherence to Healthy Home Standards if you plan to rent out the property (but your lawyer might need to request that).
  • Deposit protection: Your deposit should be held by a lawyer, offering an added layer of security and peace of mind throughout the buying process.
  • First home buyer benefits: If you’re a first-time homebuyer, you may be eligible for the Kāinga Ora First Home Grant of $10,000 per person, and shared ownership schemes like Kāinga Ora’s First Home Partner, which can assist with deposit requirements.
  • Tax benefits for investors: Investors may enjoy certain tax benefits, including a shorter “bright line period” and interest deductions for 20 years. However, it’s crucial to seek accounting advice to fully understand the implications for your specific circumstances.
  • Build guarantee: You have the benefit of warranties under the Building Act and in some cases, a third party guarantee like the Master Build Guarantee.
  • You can cancel the contract under your sunset clause if the build takes too long and goes past the sunset date.


  • Limited inspection: One significant drawback of buying “off the plans” is that you can’t physically inspect the house before purchasing it. There may be variations between what you expect and what is eventually delivered, including changes to materials and plans that could impact quality.
  • Extended wait time: The process of buying “off the plans” often involves a lengthy wait from signing the contract to taking possession, sometimes spanning 2-3 years. During this time, market conditions and personal circumstances can change, potentially affecting your plans and expectations.
  • Financing challenges: If you encounter difficulty securing finance at settlement or change your mind about buying the property, you cannot simply pull out of the contract. Fluctuations in property values and interest rates during the construction process may also impact your eligibility for bank lending.
  • Developer risks: Buying “off the plans” carries a certain level of risk associated with the developer’s financial stability and ability to complete the project as promised. Thoroughly researching the developer’s track record and reputation is essential to mitigate these risks.
  • Limited freedom in selling or transferring: Typically, you need the developer’s consent to sell or transfer the property to a third party before settlement if you decide not to proceed with the purchase.

While buying “off the plans” presents unique opportunities and potential benefits, it’s essential to carefully consider the pros and cons in light of your personal circumstances. By staying informed, seeking professional guidance, and making an educated decision, you can embark on this buying journey with confidence and clarity.

Expert advice

Off-the-plan contracts are complicated and your needs and interests should be taken care of throughout the process  – so there is no substitute for expert legal advice before you sign! A lawyer will spot the risks and can answer any questions that you may have. If you need advice on purchasing OTP, please call one of our OTP property experts Shelley, Pierre, or Amie at Henderson Reeves Lawyers 09 281 3723.

Thanks to Henderson Reeves for allowing us to share this content

Buy off-the plan with Wallace & Stratton

Wallace & Stratton is here to help with your off-the-plan purchase. Our Sales Specialists are here to make the process stress-free and they have access to a wide range of off-plan developments across the city. Discover current developments and see what fits your needs.