Entering the property market can be challenging. Additionally, it can be overwhelming having to also consider factors such as affordability, stamp duty, and property age. Buying an off-the-plan property can be an attractive solution as they are often more affordable, come with stamp duty savings, and are brand new.
What is an Off-The-Plan Property?
An off-the-plan property is a property that has not yet been built, or is still under construction. When browsing RealEstate or Domain, off-the-plan listings will show rendered photos, floor plans, and designs of the finished build. Hence, “buying off-the-plan” is literally purchasing the property based on the imagined plans and designs.
Stamp Duty and First Home Buyer Savings
There are various stamp duty savings available from the State Revenue Office website for off-the-plan purchasers, where the property is their principal place of residence. The stamp duty discount applicable can be up to 100% depending on your circumstances. Eligibility depends on a number of factors, such as the contract price threshold, or whether you are a first home buyer.
First home buyers are also able to apply for the First Home Owners Grant, which is a one-off payment from the Australian government to the amount of up to $20,000. Our article explores the different eligibility criteria, including that the property must be newly built. This means that purchasers of existing properties do not have access to this grant.
The Wait to Move In
Every off-the-plan contract has what is called a ‘sunset clause’. In a nutshell, it is a time limit by which the developer must finish the project. If the project is not complete by that time, the purchaser can walk away from the contract. Typically, sunset clauses are 24-48 months, however it can be longer depending on the project. For purchasers ready to move into their dream home this can be a long time to wait.
Inspecting the Property
Just like how many of us like to touch and feel a watermelon before buying it in the supermarket, many purchasers like to physically inspect a property before purchasing. When buying off-the-plan, there is no ability to get a sense of the space until settlement. Developers can also change the materials used in the construction, so you may not necessarily get the marble stone bench top as pictured in the marketing brochure.
Wealthsource Can Help!
If you would like to know more about whether you are eligible for stamp duty savings, or what to further expect when purchasing off-the-plan, we can help you.
Email us at [email protected] or call us on +61 3 9590 618.