Benefits of buying off the plan. It can be a rewarding experience buying a brand-new property. When buying off the plan, you have a number of unique benefits that make this form of buying real estate very exciting.
With any form of property purchase there are always various advantages and disadvantages to consider. In this market insight we will focus on the key benefits of buying off the plan. The most common off the plan properties in residential are house and land packages, townhouses and apartments. All have distinctly different characteristics, so always seek advice before buying.
Government duty concession:
When you buy an off-the-plan property in Victoria, you may be eligible for a ‘duty concession’. When buying property, we are required to pay duty on the dutiable value. It’s generally based on the purchase price paid for the property or its market value, whichever amount is greater.
If you’re eligible for the off the plan duty concession, the dutiable value differs. It is generally based on the contract price less the construction costs incurred on or after the contract date. In turn, this equates to a lower dutiable value. The Office of State Revenue has some more information on this.
Government grants and/or incentives:
There are a number of government grants associated to buying off the plan. One of the most populate benefits of buying off the plan are for first home buyers. The Victorian Government is currently offering first home buyers a $10,000 grant when you buy a brand-new home. This means the first home buyer will be occupying the property.
The First Home Owners Grant (FHOG) has some thresholds to adhere to, including property value. It is currently only available for buyers’ purchasing property valued at $750,000 or less. Another important criteria, the property must have not been previously sold as a place of residence or occupied as a home. The Office of State Revenue has a summary of the eligible criteria.
Developer incentives and/or upgrades:
Some developers offer buyers various incentives when buying off the plan. To reward the buyer to purchase early, they may look to provide incentives or upgrades. Depending on the property type, developers may require some pre-sales before being able to fund the build and commence construction.
There are many different types of offerings, but it’s very much a case by case. When demand is slower, you often find more incentives, but when the market is hot, you’ll find it difficult to negotiate.
Fixed pricing:
When buying second hand, buyers find it very frustrating to compete at auctions or even private sales. One of the great benefits of buying off the plan is that you can purchase at a fixed price. This will allow you to ascertain what you need to borrow, how much you’ll need for a deposit and knowing what you may afford in regards to contents or other personal belongings in the new home. Having a fixed price will provide comfort and it an uprising market, you may be blessed with a property worth more when you settle it into the future.
More time means you can save more too:
In our experiences at Crest Property Investments, we’ve acknowledged people save better when they have a reason to do so. When buying property, it provides a purpose and a direction to save for something. When buying off the plan, you may to wait 6-12-18-24 months for your property to be developed. The timeframe comes down to the property type or its location, but having the extra time helps buyers save more money. We have even seen financial plans in place that has allowed the buyer to increase their borrowing capacity. Therefore, seeking advice is helpful and important.
Owning a brand-new home:
Who doesn’t love the smell of freshly painted walls, the slick look of a shiny stoned benchtop or the natural light drawn into a large open floor plan. This is a rewarding experienced when done properly and is equally rewarding for investors who want a low maintenance asset that will potentially draw a higher rental income.
What should I do?
Before buying a property, we recommend seeking professional property advice. At Crest Property Investments we specialise in sourcing brand new and off the plan properties for buyers. We also do not charge fees to buyers! If you’d like to learn more, please feel free to contact us. We welcome the opportunity to help you make the best property decision.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
December 2021
