8 Reasons to buy off the plan
8 Reasons Why You Should Buy Off The Plan Now
There’s no doubt that buying off-the-plan can have significant financial gains for a buyer. In Australia, buyers can enjoy tax depreciation benefits, government incentives and the ‘newness’ of a new property without paying the market premium.
However for some people, buying “off-the-plan” is a daunting idea. After all, you can’t physically walk around the property; you’re looking at floor plans and glossy brochures instead. But while the bricks and mortar might not be in place yet, there are plenty of good reasons why an off-the-plan property could be just the investment you’re looking for.
1. It’s Brand New
One of the things property buyers and renters love about new property is the fact that it is brand new and has never been lived in. If you are an investor, then you will find that rental tenants also tend to prefer new property and are happy to pay a premium to live in one.
2. Stamp Duty Savings
A major positive in buying off the plan is the huge savings in stamp duty, depending on your state. Lower stamp duty can be paid for off the plan purchases and in some states savings can be up to 10-20 thousand dollars.
There’s more tax depreciation available on new properties, meaning you can maximise benefits and improve after-tax cash flow. It is important to consult your Accountant to find out if you are eligible.
4. Potential Capital Gains
Buying off-the-plan allows you to buy at today’s price. In a rising market, this can mean you own a property worth more than you paid for it by the time the deal settles after construction.
5. Buys Time For Buyers
That long settlement period also gives you plenty of time to save money, which can ultimately reduce the amount you need to borrow on the property. It also gives you time to shop around for the best mortgage.
6. Lower Power Bills
Purchasing a brand new property means that the property must meet strict energy efficient requirements. As it’s new, the property will be more equipped for modern day living with power-saving appliances, double glazing and more. Many new developments today are energy rated buildings which will help to keep your energy costs down, compared to an established property which might be much older.
7. Repair & Maintenance 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.
8. Superior Price
The reason buyers can usually get a superior price when buying off the plan is due to the fact that when developers first offer their new project to the market they tend to start at a lower price to meet pre-sales targets. Once price targets have been achieved construction starts, and now that the developers have met their construction finance requirements prices may increase. This is often a good price benefit for investors who commit early in the project, and everyone likes to save money.
Buying off-the-plan can be a wonderfully exciting and beneficial venture. But be sure to do your research and get professional advice, so you can avoid any potential risks.