10 benefits of buying off the plan
If you’re looking to buy a property, but are torn between buying a new property off the plan, or a slightly older property read on. Mark Mendel at iBuyNew shares his thoughts on why buying off the plan can be more beneficial in the short and longer term.
1) Stamp Duty Savings
Stamp Duty benefits are available to some buyers. This can save you thousands of dollars on your purchase. Check to see if there are any existing Stamp Duty Benefits that might apply to your purchase of an off the plan apartment.
2) First Pick – Greater Choice
When buying off the plan, you get to pick your apartment first. This means you get the chance to pick the best apartments. If you wait until construction has finished, only the leftovers will be available and in most cases these are the ones nobody wants.
3) Time
While settlement can be up to 2 years away this is positive as it gives you time to save for a larger deposit. If the property market grows in value, then you have also made some good equity growth.
4) Financial Benefits
Some states have put in place special incentives for First Home Buyers and Investors to take advantage of when buying off the plan. They are encouraging the purchase of off the plan property and by doing so, you can save thousands of dollars. Find out what financial benefits you can attain when buying in your home state.
5) Deposit Options
While most people pay cash to secure their deposit, there are other more flexible options that you can consider. These include using a Bank Guarantee and a Deposit Bond.
It’s always best to check with your Property Consultant what method of payments the developer is happy to accept on exchange.
6) Lock in a Price
When you buy off the plan, you lock in your price and if the property market grows in value, and your property goes up in value, you don’t have to pay any more. We have many clients that pay X and by the time they settle, their property has gone up between $40,000 and $100,000! This is very powerful as this capital growth allows you to buy another property and continue to build your property portfolio.
7) Tax Advantages
Being a new property, you can claim Depreciation which is a major tax incentive which is popular for investors. This helps reduce the ongoing costs of holding the property and allows you to build a larger portfolio.
8) Colour Choices
Occasionally you will have a developer that offers you 2 finish options for your apartment. For example, you may get to choose between a light and dark colour scheme. Depending on your preference, if you buy early enough you may get that choice.
9) Deposit Held in Trust
When buying off the plan, your cash deposit is held in trust. Usually this money is invested on the buyer’s behalf while you wait for the construction to complete. This could mean a few thousand dollars of interest which is a nice little bonus at the end of construction.
10) Its New!
Everyone loves NEW! As a first home buyer you’ll love moving into something brand new while for investors, you will maximise your rental return as an incoming tenant will pay more to live in a new apartment.
CPS Property has a number of new apartment options available, contact us to find out more.
