6 reasons to buy off the plan
Matt Otway and Peter Shield of The Project Marketing Company, know about good homes and great investments. Buying a home that doesn’t exist yet sounds kind of crazy, but it could mean owning the property of your dreams. From buying a brand new property that comes with new fixtures and fittings, to giving buyers more time to get their affairs in order before moving into a new home. We look to six benefits of buying off the plan.
1. Big stamp duty savings
One of the well-known and biggest reasons for buying off-the-plan property is the potential for huge stamp duty savings.
For example, in NSW, you could potentially save over $18,700 on a $500,000 purchase if you purchase a new off-the-plan property instead of an established property.
Stamp duty can burn, especially when you’re a first timer, so ways to save are a warm welcome!
2. Depreciation benefits
If you’re buying off the plan as an investment and plan to lease your new home to renters, you may be eligible for 1000s of dollars’ worth of tax deductions.
Get a full depreciation schedule from a quantity surveyor once your property settles, as this will make it far easier for you to claim deductions on your home’s fittings and fixtures at the end of the tax year.
Increased depreciation means your holding costs will be much lower as the tax man is covering a bigger portion of your investment property expenses.
3. Repair cost savings
It goes without saying that a brand-new home – if well built – will not need the ongoing maintenance that an older property often needs.
4. Lower power bills
Changes to the Australian Building Code mean new properties must meet stringent energy efficiency requirements.
Your off-the-plan home should be fitted with some of the most power-saving appliances and gas/water/electricity systems on the market, which is a big plus for owner occupants and future tenants alike.
5. Potential capital gains
Buying off the plan allows you to buy at today’s price. In a buoyant market, this often means you will own a property that’s worth more than you paid for it by the time you move in.
However, buyers should view this as ‘a nice little bonus’, not the reason for buying off the plan.
This can be good, if the value has increased; and it can be bad, if the value has dropped. If the value goes up by 20% or 30%, then the biggest concern you’ll have is how to spend the money!
6. Buys time for buyers
Buying off the plan is one of the easiest ways to get into the property market.
You only need a 10% deposit today and can pay the balance of the purchase price at settlement, once construction is complete (which might take six months or longer).
Savvy buyers use this time to save towards moving costs, furniture, the home and the house-warming party.
With more savings to put towards your new property you will be able to borrow less and therefore your loan repayments will be much lower.
Look to Matt Otway’s and Peter Shield’s current projects here.
Source: realestate.com.au