A guide to buying off-the-plan
Buying off-the-plan has quickly become the choice du jour in property. Canberra is enjoying a stable economy, low unemployment and low rental vacancy levels, meaning housing prices are increasing organically.
Aside from allowing you to put down a smaller deposit than you would need to on an established home, buying off-the-plan has a string of benefits. So, what do you need to know?
- One of the biggest benefits of buying off-the-plan is having the ability to customise the finishes and fittings in your home. Want a home that makes life a little more convenient? Home automation is the answer. Like a neutral colour palette? Pick and choose the finishes to create your own oasis.
- Stamp duty is calculated based on the land value and building, but since there is technically no building yet, you will only have to pay based on the value of the land.
- If you’re buying an investment property, a new build will save you money on depreciation tax (it’s all in the name).
- You’re getting tomorrow’s property for today’s price, even if the property increases in value by the time it’s completed.
- If you’re selling one house to move into your new one, you’ll have more time to sell your existing home while you wait for the new one to be built.
- You could accrue interest and save more money after paying your initial deposit, as you may not have to pay any repayments until building is completed.
- If it is your first home, you won’t have to pay stamp duty, no matter the price of your property, giving you more freedom to purchase a home that suits your needs. Your household income will need to be less than $160,000 to be eligible for this discount.
What you need to do
- Ensure you are buying the right property for you. Don’t just consider the size for you right now, think about how it will suit your needs in five years. It’s also important to factor in the suburb for local amenities and proximity to work or school, the orientation and, if you’re buying an apartment, if it is on a level you are happy to live on.
- Do your research first to see if there are any other planned developments nearby that may obstruct views.
- Carefully inspect the display home and all its fixtures, fittings and finishes as this will give you the best indication of the quality of your finished home.
- Don’t just buy because you can afford it. Research the market conditions and seek advice from professionals on the right time to buy.
- Have a legal professional look over your contracts if you need help deciphering legal terminology.
- If you’re getting a loan, make sure your lender has agreed to financing before you sign a contract.
- Make sure you know what is included in the purchase price and what are optional extras.
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