10 KEY POINTS TO BUYING OFF THE PLAN
If you’re looking to buy a property but are torn between buying off the plan or a slightly older property, make sure you read our latest article that provides 10 key benefits as to why buying off the plan can be more beneficial in the short and long term.
1) Stamp Duty Savings
Stamp Duty benefits are available to investors in Victoria, until 30th June 2017. First Home Buyers need not pay stamp duty from 1st July 2017 too! This can save you tens of thousands of dollars on your purchase. Call a Motion Property Consultant to find out what existing Stamp Duty Benefits that might apply to your purchase of an off the plan apartment, 1300 850 730.
2) First Pick – Greater Choice
When buying off the plan, you get to pick your apartment before anyone else, this means you get the chance to pick the best apartment. If you wait until construction has finished, only the leftovers will be available and in most cases these are the ones that nobody else wants.
While settlement can be up to 2 years away this is positive, as it gives you time to save for a larger deposit. If the property market grows in value, then you have also made some good equity growth.
4) Financial Benefits
Some states have put in place special incentives for First Home Buyers and Investors to take advantage of, when buying off the plan. They are encouraging the purchase of off the plan property and by doing so, you can save thousands of dollars.
5) Deposit Options
While most people pay a cash deposit to secure their property, there are other more flexible options that you can consider. These include using a Bank Guarantee and a Deposit Bond. It’s always best to check with your Property Consultant what method of payments the developer may be happy to accept on exchange.
6) Lock in a Price
When you buy off the plan, you lock in your price and if the property market grows, your property goes up in value and you don’t have to pay any more. We have many clients that pay X and by the time they settle, their property has gone up between $30,000 and $60,000! This is very powerful as this capital growth allows you to buy another property and continue to build your property portfolio.
7) Tax Advantages
Being a new property, you can claim Depreciation which is a major tax incentive for investors. This helps reduce the ongoing costs of holding the property and allows you to build a larger portfolio.
8) Colour Choices
Occasionally, the developer will offer 2 finish options for your apartment. You may get to choose between a light and dark colour scheme. Depending on your preference, if you buy early enough you may get that choice.
9) Deposit Held in Trust
When buying off the plan, your cash deposit is held in trust. Usually this money is invested on the buyer’s behalf while you wait for construction to complete, this could mean a few thousand dollars of interest which is a nice little bonus at the end of construction.
10) It’s New!
Everyone loves NEW! As a first home buyer you’ll love moving into something brand new while for investors, you will maximise your rental return as an incoming tenant will pay more to live in a new apartment.
Richard Griffin – Sales Consultant