Why buy off the plan?
Are you concerned with the current Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (“Royal Commission” and don’t want to get a loan right away?
(This implies business and financial advice)You may consider buying off the plan.
Buying off the plan is entering into a contract that does not exist physically, but on paper.
You can’t physically see the property, however you get an idea by referring to marketing floor plans and artist impressions of what the property will end up looking like.
Advantages of buying off the plan?
There are numerous benefits with off the plan purchases, such as:
A buyer may realize significant depreciation tax savings as the property is brand new and will entitle you to maximum depreciation. Depreciation expenses that may be claimed include the building finishes, furniture and fittings. (You should seek independent financial advice before buying off the plan as an investment)
A buyer may save money on the purchase price as before construction starts developers may try to sell a set number of units to obtain finance for construction purposes.
By the time construction is completed the value of the property may increase overtime.
A buyer needs to save up for the deposit before contract date. Upon approval of the developer, the buyer may secure the purchase in the form of a bank guarantee. The buyer may also share the interests on the deposit they pay.
Off the plan purchases may be a great way to buy if you do not currently have the funds or the means to purchase the property at the contract date as it allows you time to get the finance or save up for the purchase price.
Disadvantages of buying off the plan?
Developers go into liquidation before construction is compete.
The dimensions may change and there is at times little one can do to change this.
You may disliked the finish product or it may not be what you expected.
The floor plan may change due to required changes during construction that you have little or no control over.
You have no control of the time, and it is uncertain when you can move in.
Buying off the plan for first home buyers:
The First Home Owner Grant (New Homes) scheme (the Scheme) was established to assist eligible first home owners to purchase a new home or build their home by offering a grant.
The grant amount is determined by the date of the eligible transaction. This is the date of the contract to purchase a new home
From 1 July 2017, the First Home Owner Grant Cap for new home purchases is $600,000;
For eligible transactions made on or after 1 January 2016, the grant amount is $10,000.
For eligible transactions made between 1 October 2012 and 31 December 2015, the grant amount is $15,000.
The First Home Buyers Assistance scheme provides eligible purchasers with exemptions on transfer duty on new and existing homes valued up to $650,000 and concessions on duty for new and existing homes valued between $650,000 and $800,000.
This provides great savings for first home owners.
Vision Legal
If you are purchasing off the plan property, please feel free to contact Team at Vision Legal on the 02 9633 1322 for helpful advice and legal assistance in reviewing the Contracts and conveyancing work for you.