When you’re buying a property, you want to get the most bang for your buck. This is driving more and more Australians to consider buying a property off the plan, as it gives them the chance to buy a brand-new property – without having to pay new-build prices.
Off the plan properties, however, have yet to be built, and although you’ll be able to see plans (and in some cases, amend them), you won’t be able to physically experience your new home until construction has finished. Understandably, this comes with its fair share of advantages and disadvantages.
What You Need to Know About Buying Off the Plan
These are some of the key advantages of off the plan properties:
On average, the cost of buying a property off the plan is lower than standard homes, as you assume a degree of risk. As a result, developers are quick to offer bonuses and incentives, making them appealing to younger or first-time buyers.
Tax benefits also come into play with off the plan properties, as the ATO allows for more tax depreciation to be claimed back on new properties. Additionally, it varies from state to state, but discounts on stamp duty may also come into effect.
As well as this, developers will often cover your deposit, with the final bill not due until the property construction has finished. Rental guarantee incentives are also usually offered by developers as a show of their confidence that the property will perform well in the rental market.
Some developers market off the plan properties as highly energy efficient. If this is important for you when looking for a new property, look no further. Since the property is new-build, the opportunity for you to pack it with energy-efficient smart products is right there.
Understand your contract
The key to staying informed on the build process is understanding your off the plan contract. This contract will detail any specifics you need to know regarding the timeframe, build, costs, and any delays that could occur. Make sure you read the contract thoroughly, as it’ll help prevent you from being caught out.
Don’t forget insurance
Building a property is a huge undertaking. As a result, it’s always advisable that buyers take out comprehensive property insurance prior to moving forward. The upfront costs might seem expensive, but it’s definitely better to have it and not need it than to need it and not have it.