Nowadays buying off-the-plan properties has become more common. There is no doubt that buying off-the-plan can have significant financial gains for a buyer. In Australia, real estate investment can help the investor enjoy tax depreciation benefits, government incentives and the ‘newness’ of a brand new property without paying the market premium that can occur in the established market. This article provides you the key benefits as to why buying off the plan can be more beneficial in the short and longer term.
Stamp Duty Saving
Are you concerned about the massive stamp duty levy on a property purchase? The biggest reasons for buying off-the-plan property is for the potentially for huge stamp duty savings. You pay only a fraction of the full stamp duty. This will you help you to save thousands of dollars on your purchase and be able to enter the market with less cash up front.
When buying off the plan, you get the chance to pick the best apartments. Some states are encouraging the purchase of off the plan property and they have put in place special incentives for First Home Buyers and Investors to take advantage of when buying off the plan. Also, when you buy off the plan, you lock in your price and if the property market grows in value, then your property gains in value, you don’t have to pay any more, you get the benefit of the capital gain.
While settlement can be up to 2 years away, you will get some breathing time to take care of the investment, or to organize to move house if you intend to be an owner-occupier. Also this is positive as it gives you time to save for a larger deposit which helps to reduce the amount of finance you will need to borrow. If the property market grows in value, then you have also made some good equity growth.
If the property is being purchased for investment purposes, the buyer may be able to claim depreciation on their tax for items including fixtures and fittings. It is recommended that buyers seek advice from trusted property consultants to find out more. This helps reduce your taxable income on an ongoing basis, getting you more tax back & in affect reducing the cost of holding the property and allows you to build a larger portfolio.
If you’d like to get some individual advice, please feel free to contact your trusted financial adviser at Carter Property Enterprises.