5 Reasons To Consider Buying Off the Plan

5 Reasons To Consider Buying Off the Plan

While established homes have their appeal, buying off the plan offers unique benefits that might make it the perfect fit for your goals. This strategy isn't just about apartments either—houses or townhouses are often sold off the plan too! And many of the benefits apply to both owner-occupier and investment purchases. Here are five compelling reasons to explore buying off the plan.

1. Generous Tax Breaks

One of the most appealing aspects of brand-new properties is the ability to claim depreciation on assets within the property. This includes appliances, light fixtures, carpets, blinds, and even the building structure itself. These can be claimed as deductions on your tax return, leading to substantial tax savings, especially within the first five years of ownership, when depreciation benefits are at their highest.

2. Attract Quality Tenants, Maximise Returns

New properties with modern designs and amenities hold great appeal for renters.  This translates into attracting higher-quality tenants willing to pay a premium for a desirable home, leading to a reliable rental income stream. New properties often offer amenities like gyms, pools, or rooftop gardens, which add to their desirability.  On average, investors can expect rental yields of 4-5% from a new property compared to 2-3% for established properties.

3. Potential for Increased Value

Buying off the plan means locking in today's purchase price for a property that won't be completed for months or even years. Given that property markets tend to grow over time, the completed home could be worth considerably more than you paid for it at settlement. This potential for capital growth is especially attractive when buying in an area with promising infrastructure projects or an overall rising market. Additionally, buying off the plan only requires a 10% deposit at signing, with the remaining 90% due at settlement. This gives you more time to save.

4. Significant Stamp Duty Savings

Stamp duty can significantly increase your property purchase costs. However, when buying off the plan, there are potential avenues for stamp duty reductions depending on the type of dwelling:

• House and land packages: You may pay stamp duty only on the land value, not the completed home's value.
• Apartments and townhouses: Stamp duty is calculated on the 'dutiable value', which can be lower than the purchase price.
• First home buyer concessions: Many states offer further reductions or even exemptions on stamp duty for first home buyers, especially when choosing new or off the plan properties.

5. Peace of Mind with Warranties and Minimal Repairs

New properties usually come with a builder's warranty, often for 7 years, covering defects or structural issues. This provides a level of protection for your investment, ensuring the developer will address any faults during that period. Additionally, brand-new homes are unlikely to need unforeseen major repairs for several years, saving you money and offering a more stress-free ownership experience, especially when compared to the potential surprises an older property can hold.

If you're looking for a property opportunity with tax advantages, competitive rental yields, and a smart investment strategy, buying off the plan might be the right path for you. Turn to iBuyNew to easily find off the plan properties and unbiased advice from our property experts.