Whether you’re a first home owner or developing your properly portfolio, this guide will help you buying off-the-plan properties
So, you’re a first home owner looking to buy their first dream property? Or you’re just trying to develop your property portfolio? It’s no secret that buying off-the-plan properties have some great benefits and rewards- cheaper prices, tax benefits, stamp duty savings and an overall larger selection to choose from are just some of the great benefits.
So what is off-the-plan property? Buying an off-the-plan property means you’re entering a contractual agreement to purchase a property pre it’s building stage. There is no finished product as such to physically inspect, but a lot of developers these days take great efforts in providing you simulated images, models and drawings of the proposed finished product.
Who doesn’t like to save money, right? When it comes to buying or investing in property it’s important to know exactly the expenses involved. Typically, off-the-plan properties are competitively priced in the early stages of their development. This is mainly due to developers offering introductory rates to meet their construction fees. This is a great incentive to purchase your new property as it ensures you get the best price possible. But be quick, as prices will rise once they have enough buyers to commence the building stage.
The property market is known for its volatile change- one month it may be up, then down the other. The market can change right before you make your final decision, so knowing how much you’re paying is great for some peace of mind, especially for the budget conscious new home owners. When you buy off the plan you essentially lock in a price, so if the property market grows in value and your property goes up in value, you don’t have to pay anything extra. This is a great benefit to have, especially for your capital growth which can go towards your property portfolio or any other future investment.
Buying off-the-plan, especially in Victoria, also means huge savings on stamp duty fees. Purchasing a property pre it’s construction stage offers the buyer a reduction on stamp duty costs, this can save you thousands of dollars on your purchase. This was implemented by the Australian government to encourage new developments to start in areas that were seen as ‘hot and upcoming’, and the scheme has now encouraged new buyers to enter the market. This is a great incentive for new home owners who don’t want to over stretch their budget and who want to focus their spending on other aspects of their new home.
Like with all investment properties purchased, tax benefits are one of the most well-known advantages- this advantage is even more true when the property is brand new. Buying off-the-plan properties ensures your tax deductions are maximised and helps to reduce any ongoing costs.
Most developers will have multiple developments and projects going on at the same time, and a larger selection means a greater opportunity to make sure your purchased property is to your liking.
Buying off-the-plan property may seem like a risky and intimidating move to some buyers and investors, especially when the product is still in its development stage. But as is the case with most investments; research and understanding the market is key in making the right decisions. Lucky for you there are plenty of companies who will take the guess work out of your decision making and put your worries to rest. If you’re interested in buying a new property and these benefits speak to you, speak to our off-the-plan property experts at IBuyNew to ensure you maximise your purchase and minimise your spending.