Off-the-plan developments are increasingly a major part of real estate sales in Melbourne and offer buyers significant benefits.
The best developments will showcase the highest standards of craftsmanship, a desirable location and offer the opportunity for long-term investment returns. Others may not embrace the same standards and a check on the quality, timely delivery and contractual obligations of a developer’s previous developments is essential before signing on the dotted line.
Here are some of the key benefits of purchasing a property off the plan:
•A brand new property! What could be better than a house or apartment that no one has ever lived in? Fresh fittings, new carpet and the latest appliances are always appealing.
•Significant stamp duty savings. This is because sales duty is payable on the value of the property. At the very early stages of a development there is little or no capital improvement – stamp duty is just calculated on land value only. Stamp duty savings continue throughout the building process, but decrease as the building nears completion.
•Longer timeframe to get finances together. Once the initial deposit is paid, there may be a year or more before the building is finished. This gives buyers time to organise settlement funds and/or save.
•Collaborating on the interior fit out of your property. Depending on what stage you buy off the plan, and the flexibility of the developer, there are often opportunities to request specific features to personalise your property.
•Instant depreciation claims. Your financial advisor will be able to provide full details of what can be claimed at tax time, but depreciation is often an attractive benefit of an off-the-plan purchase.
•High rental returns. Demand is often higher for brand new apartments, which therefore attract a premium monthly rental as compared to older properties. Combined with fewer outgoings (i.e. maintenance costs), this makes buying off the plan attractive for many investors.
Always take the time to read and understand the contract to ensure you make an informed decision and a confident purchase.