ParkTrent Investment

Buying property off the plan can offer great opportunities and benefits for investors. As brand new properties often command premium rents and require less maintenance, buying property off the plan can also benefit from better cash flow upon the property's completion.

Buying property off the plan can benefit financially as well. From stamp duty savings to tax benefits and lower prices, there are a number of benefits when buying property off the plan.

Stamp Duty Savings
The Victorian Government has reduced stamp duty those buying property off the plan (before the property is completed). The amount of stamp duty increases upon construction until the building is complete where the full rate of stamp duty applies. If purchasing the property before construction commences, the concession is always at the greatest level.

Tax Benefits
There are also some noteworthy tax benefits to be aware of, especially when buying property off the plan. There are more deductions available the newer the property is, especially when being brand-new so buying property off the plan maximises your tax deductions.

Price
Off-the-plan properties are generally priced quite competitively as developers offer their new products to the market at substantially lower prices. This is to encourage an early growth in sales. Prices generally rise as the construction takes place and the developer has met their construction finance requirements.

As with any investment property purchase, you should always ensure you complete the necessary research before committing to buying. Below are a few tips for you to use when buying property off the plan:

1.    Do some market research. Look at the area's population growth, employment opportunities, infrastructure spending (both public and private), recent capital growth and average annual growth.

2.    Investigate the development and infrastructure planned or existing in the area. Check council records for nearby proposals, the outlook, aspect of the property, fittings, car spaces, its valuation against the open market, owner's corporation fees, and the proposed completion date and sunset clauses.

3.    Make sure you can fund your purchase. Confirm your borrowing limit, check for government incentives for off-the-plan purchases, apply for a deposit if necessary, and work out your budget, not forgetting to include holding/mortgage costs, depreciation and tax rebates.

4.    Ensure every detail of the property is specified in the contract including fixtures and fittings.

For more information about the possible benefits and tips for buying property off the plan, contact us via contact@parktrent.com.au or call our Customer Service and Sales team on 1800 652 224 to book an in-home consultation with one of our property investment specialists.