When investing in off the plan property there are a number
of benefits which make doing so an attractive option in the current market
place. It is common to pay less for an off the plan property than for
one that has already been built. The investor can therefore make a saving
when purchasing ‘off the plan’ as it makes sense for the developer
to offer a good deal and therefore complete contracts for the building
as it reduces the monetary risk that would be associated otherwise.
One of the biggest savings associated with buying ‘off the plan’
is the reduction in stamp duty. The lower stamp duty only applies in Victoria
as the duty is calculated based upon the value of the land that the property
resides on, and not a combination of the land and the property as at the
time this is done there is no property and simply the land that is a signal
of the purchase and therefore relevant to the stamp duty.
The cost of purchasing the property is based around the current prices
when the contract is drawn up. By the time the building has been built
the value of the property could have risen, which would mean that the
investor can make significant capital gains before even renting the property
to possible tenants or selling it, depending on what way seemed best to
maximise profit from the purchase.
The length of time before completion of the property means that after
having paid the initial 10% there is a long time before finalising the
payments and this time gives the investor a chance to organise their finances
in relation to any other investments.
For more information please click here: Off the Plan