When purchasing a property off the plan, you will typically encounter two types of contracts: a one-part contract or a two-part contract.
A one-part contract is commonly used for apartments and some townhouses. In this scenario, the developer or builder is responsible for both the land and the construction of the property. You will only need to sign a single contract for the entire purchase. One common arrangement in a one-part contract is the 10-90 contract, where you pay a 10% deposit at the time of signing, and the remaining 90% is due upon the completion of the building process.
A two-part contract is frequently used in house and land packages but is also prevalent in certain townhouse developments, including the Townhomes at Mason Quarter. With a two-part contract, you’ll encounter two separate contracts: one for purchasing the land from the developer and another for the build with the nominated builder.
One of the benefits of a two-part contract is potential stamp duty savings. Since the land and the build are separate contracts, you’ll only need to pay stamp duty on the land portion, not the entire package. Additionally, First Home Buyers may be eligible for further stamp duty concessions or exemptions depending on their situation. For more details, visit the State Revenue Office Victoria’s website.
The payment structure for a two-part contract differs from that of a one-part contract. If you’re financing your purchase through a mortgage, you’ll start making payments on the land portion of the loan after settling on the land. Depending on when construction begins, there might be a period where you’re paying for the land while waiting for the building process to start.
Once construction commences, you’ll make progress payments to the builder as milestones are reached throughout the build. These payments are made in addition to your land loan repayments. It’s important to plan for these payments during construction, as you won’t be able to live in the property until it’s complete.
At Mason Quarter, purchasing a townhouse involves a two-part contract.
Land Contract: You’ll sign the land contract with Cedar Woods (the developer) and pay a 5% deposit at the time of signing. The remaining balance is due when the land settles.
Build Contract: The build contract will be signed with the project’s builder, SOHO Living. You’ll also pay a 5% deposit when signing this contract, with progress payments required throughout construction until the build is completed.
If you have any questions, our friendly team is here to help. Contact our Mason Quarter Sales Team for more information.
Disclaimer: The information provided in this document is indicative only and may not represent final details or personal circumstances. Cedar Woods does not guarantee the accuracy of the material. Prospective buyers should conduct their own inquiries and seek independent advice. All information is subject to the Terms of Use accessible at www.cedarwoods.com.au/Terms-of-Use