Buying ‘off-the-plan’ basically means entering into a legally binding contract to purchase a property before it reaches the stage of final development and occupancy approval. So in other words, you are buying a promise – a promise that the seller will complete the development of a property in accordance with agreed terms.
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.
First-home buyers around Australia can enjoy exemptions and concessions of stamp duty for properties purchased off-the-plan. They can also enjoy government grants. In NSW, for example, off-the-plan buyers may be eligible for a grant of $5,000 (provided that the value of the new home does not exceed $650,000 and the value of vacant land does not exceed $450,000).
When buying off the plan, you get to pick your apartment first. This means you get the chance to pick the best apartments.
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.
A common complaint from buyers who have had an off-the-plan dispute has related to the quality of fittings and a gap between expectation and reality. Buyers should look at the fittings schedule attached to the contract and see what type of fittings will be included, including brand, make and model. They should also know what will happen if an item is out of stock or unavailable – will it be replaced with an item of equal value and quality – and will the buyer have a say?
You may think you’ve found a good deal, but keep in mind that market price fluctuation and furtl,,her housing developments may ultimately impact the resell value of your property once it is completed.The key is to do your research and know what’s planned in the area where you intend to buy. Are highrises being built? Are there subdivisions and land grants? At the end of the day, it all comes down to supply and demand.
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 the risks at all costs.
Using a real estate agent may give you that extra edge you need to achieve your needs and goals. If you would like advice on how to buy property off the plan in Australia, please speak with us.
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