When it comes to purchasing property, there are so many options available to buyers that it can be a little daunting weighing up the pros and cons. One of the common ways of purchasing property is to buying off the plan. To assist with the decision of whether to buy a property off the plan rather than buying an established home, we have prepared an outline of the benefits for your consideration.
1. Off-the-plan sales concession & FHOG
For first home buyers, no stamp duty is paid up to $600,000(and above this amount the stamp duty is calculated on a sliding scale). The purchaser must meet the residence requirement. Currently the First Home Owner Grant gives $10,000 in the regional zone, and $20,000 in rural areas.
2. Depreciation tax benefits
If you are buying the property to lease out to tenants, you should be able to claim the depreciation of fixtures and fittings on your tax for a period of time. Speak to your accountant or a specialized Tax Depreciation Specialist.
3. Reduced Repairs
A brand-new home should not have the same level of wear and tear costs as an aging home. Expensive items like hot water systems, ducted heating and security systems will be covered by a warranty and have an estimated lifespan, so there is significantly reduced likelihood of costs associated with these items for the first 5-10 years of property ownership.
4. Reduced Utility costs
The Building Codes of Australia ensure that all new homes must meet a set of standards in relation to energy efficiency and sustainability. Items such as thermal insulation, draft proofing, use of renewable energy such as solar and water tanks contribute to this.
5. Capital gains during construction stage
When you purchase a home off the plan, you are locking in the cost at today’s price. When you settle on your property, if the market around it has experienced an increase in value, you will have built some equity which you may choose to use for other investment purposes.
6. Provides buyers with additional time to save or plan
Buyers can use the time between deposit and settlement to save for other costs such as furniture, relocation, landscaping and window furnishings etc. This saving period might also help to reduce the loan borrowing amount.
7. You can choose the finishes and colour scheme
Often package deals will allow choices of tile, stone and paint colourings as well as additions such as upgraded appliances, landscaping etc
8. More Choice / greater benefits
Buyers who purchase in the early stages of the land development are often enticed with ad-on features such as landscaping, reduced price, pick of locations, cash back.
9. Lower deposit
Most off the plan deals will offer a 5% deposit option (instead of the 10% standard for established homes)
10. New Home feeling
There is nothing like moving into a brand-new home, plus if the property is used for investment, Tenants will often pay extra for a brand-new home.
Please Note: Ristic Real Estate is not and does not offer financial advice. If you are considering purchasing a property, we recommend you seek independent advice from a qualified financial advisor or your accountant prior to purchase.