Buying a house 'off the plan'

By the resi financial blog team, 28 August 2013

Buying a house off the plan

For those keen property investors out there looking for a great long term investment, you may want to consider purchasing a home or apartment 'off the plan'.

Purchasing a home off the plan means buying a brand new property from a developer that has yet to be constructed. 

There are many benefits to doing this, with one of the most significant being the possession of a brand new, high quality home.

Often when buying a property off the plan, purchasers need to pay 10 per cent of the purchase price as a cash deposit. The balance for the rest of the home is paid upon the property's completion.

This makes the purchase process a lot easier, as it gives time for buyers to refinance investment property loans, or seek other types of loans to fund the purchase.

Investors

Most often, off the plan properties are located in new developing areas, which is a good sign for people who wish to rent out their property to tenants.

Another benefit for buying off the plan properties for investment is that you may be able to claim depreciation on your tax for some things like fixtures and fittings.

First home buyers

There are also significant benefits for first home buyers. In many states around the country, the local governments have put in place first home buyer incentives.

Most of these incentives involve a certain amount of funding that will go towards the purchase of a brand new home.

For example, currently in New South Wales the state government can provide up to $15,000 to first home buyers for the purchase of a brand new home priced under $650,000.

Some states also offer stamp duty reductions, which also help to bring the price of buying a home and the balance of your first home loan down.

Victorian first home buyers are able to take advantage of a discount on stamp duty rates of 40 per cent for the purchase of new and established dwellings.

Categories: Home Loans