Research types of property to buy

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There are various options when buying property:

Established property

Buying an established property generally means buying an older house, and maybe planning renovations and extensions.

Before you buy an established property to renovate, ask an architect, draftsperson or builder to report on what renovations are possible. To find a registered building practitioner, visit the Victorian Building Authority website.

Even if you do not intend to renovate, a building inspection before you buy can help you identify repairs and maintenance requirements, and their estimated cost. For more information, view our Inspect properties before you buy page.

If building work has been carried out on the property in the past 10 years, check if these works were registered by:

  • checking the Section 32 statement, which should include these details
  • contacting the local council.

The quality and workmanship of registered building works are automatically covered by the builder's warranty. These warranties apply to the building work for 10 years, even if the property sells several times. For more information, view our Building warranties, insurance and insolvency page.

Buying from an owner builder

An established property may be an owner-built house or include other building work by an owner builder. An owner builder is a person who:

  • used their own skills to build, extend or renovate their home
  • managed sub-contractors to do the work.

You can tell if a house is owner built, or has had work carried out by an owner builder, by:

  • checking the name of the builder on the building permit attached to the Section 32 statement
  • contacting the local council
  • contacting the Victorian Building Authority (VBA). Owner builders must get a Certificate of Consent from the VBA before carrying out works over $16,000.

If a property includes work carried out by an owner builder less than six years ago, the owner builder must provide a defects inspection report. For more information, view our Owner builders page.

A copy of the owner's certificate of insurance and the defects report must be attached to the Section 32 statement.

Apartments, units or flats

If you are looking to buy an apartment, unit or flat, consider the following:

  • Can you hear people walking and talking in other apartments?
  • Can you smell cooking?
  • Are you near the garbage bins or waste collection areas? Are there any odours?
  • Is there a parking space on the title? If so, check that it matches the plan of subdivision and the contract of sale.
  • Does it have a strata title, common property and an owners corporation? What are the owners corporation rules?

Strata title is individual ownership of a unit or apartment within a multi-unit complex. If you are buying an apartment off-the-plan you will receive a certificate of title for your apartment at settlement. All apartment owners are joint owners of the common property (common areas shared by all the unit owners).

If you are considering a strata title property, find out about the owners corporation as you will be a member of the owners corporation if you buy the property. This means you will have the right to vote on decisions about the operation of the owners corporation and, among other responsibilities, must:

  • pay annual owners corporation fees, levies and charges
  • obey owners corporation rules. Rules may restrict renovations to the property, pet ownership and noise.

You can find out about the owners corporation by reviewing:

  • the owners corporation certificate attached to the Section 32 statement. This has details of current fees, insurance cover and maintenance works carried out. It also details any proposed works, fee increases and any potential or existing legal claims affecting the property
  • the owners corporation manager's details on our Public register of owners corporation managers
  • any contracts, agreements, leases or licenses affecting the common property
  • the minutes of the owners corporation's annual general meetings
  • the contract of sale.

For more information about how owners corporations work, view our Owners corporations section.

If you are considering a strata title flat, unit or apartment, use our Buying an apartment or unit checklist.

Note: While the flat, unit or apartment will most likely be a strata title, some may be a company title or stratum title. A legal practitioner or conveyancer can advise you on how these titles will affect your ownership, rights and responsibilities. For more information, view our Company title and stratum title page.

Buying off-the-plan

Buying a house or unit before the building works have been completed is known as buying off-the-plan. In some cases, construction may not have started while in others it may only be partially built. You may be able to see the design of the building and sketches of its final appearance in advertising material.

People are often attracted to off-the-plan sales as you may pay less land transfer duty than you would for an established house or unit.

From 1 July, 2017, the off-the-plan exemption and concessions for land transfer duty only apply to a property you buy to live in and to first home buyers.

You are eligible to apply for an exemption from paying land transfer duty if you are a first home buyer and the dutiable (payable) value of your property is $600,000 or less.

You are eligible to apply for a land transfer duty concession if:

  • you are a first home buyer and the dutiable value of your property is between $600,001 and $750,000, or
  • the property will be your principal place of residence and the dutiable value is $550,000 or less.

The amount of the duty concession depends on how advanced the construction of the building is and its value when the contract of sale is signed. If construction is close to completion, the duty is likely to be higher. For more information, visit the Dutiable value of a property page on the State Revenue Office website.

Buying off-the-plan also means you have more input into the property's design and the contract price is locked in at the time the contract is signed - this means the contract price does not change even if the property increases or decreases in value throughout the build.

Buying off-the-plan without being able to see the finished product has its risks, including:

  • being unable to inspect the actual property. You have to rely on an artist's impression, floor plan and advertising material for information about what you are buying
  • differences in the expected and actual quality of the final finishes
  • unexpected changes to the plans or specifications
  • an uncertain completion date
  • complex contracts
  • limited recourse with the builder if there is a dispute. This is because the developer enters into a major domestic building contract with the builder, and you buy the property from the developer
  • property market volatility causing the value of your off-the-plan home at settlement to be less than the contract price
  • potential issues with obtaining finance - for example, if the value of the property decreases or the completion date changes, you may have problems getting the loan approved.

You are required to pay a deposit of no more than 10 per cent of the contract price. If you buy off-the-plan and the plan of subdivision is not registered by the time specified in the contract, or the default time of 18 months, you have the right to end the contract and get your deposit back.

An off-the-plan contract of sale must contain a clearly visible warning notice with the following information for the buyer:

  • Subject to the 10 per cent limit, the seller and buyer may negotiate on the deposit amount to be paid
  • A substantial amount of time may pass between the buyer signing the contract and owning the property
  • The value of the property may also change during the time between the buyer signing the contract and owning the property.

Buyer's tip

If you intend to buy off-the-plan, get a firm completion date in writing from the developer. You should get legal advice before signing a contract.

Rural property

Before you buy a rural property, consider the unique issues that affect property in a rural zone. Some considerations are listed in the Rural properties section on our Due diligence checklist.

You should also look into whether your water needs will be met. Without a water entitlement, you may not have the access you need. Ensure your legal practitioner or conveyancer applies for information statements from relevant water corporations for drinking water and rural water needs. To find the relevant authority, visit the Water corporations page on the Department of Environment, Land, Water and Planning website.

Vacant land

Before you buy vacant land, consider getting a soil test if you plan to build on the land. This could avoid costly problems when you start excavation and building. For more information, view the Soil and groundwater contamination section on our Due diligence checklist.

If rock must be excavated, or the site is a filled dam or on a flood plain, there will be extra costs associated with footings and foundations. For more information about foundations, display homes and land packages, view our Building and renovating section.

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