There are so many great incentives to take advantage of at the moment when it comes to buying new and off-the-plan properties.
First home buyers, in particular, are the big winners when it comes to buying new, with the big 3 incentives availble to them including; the First Home Owners Grant, the HomeBuilder grant and the First Home Loan Deposit Scheme. There are many more incentives buyers can take advantage of depending on which state or territory they're in.
See which grants, schemes and other incentives are available to you in your state.
Much like a car a brand new property initially may cost more however unlike a car, property doesn’t depreciate in value as soon as it’s purchased, in fact it should increase during the construction period!
Take a NEW property of $550,000 as an example, buying as a first home buyer you not only save in Stamp Duty but you also receive $15,000 (in Victoria) for the First Home Owners Grant AND potentially a further $25,000 for HomeBuilder from the Government. That could add up to a potential $40,000 off the asking price of a property!
To take this to the next level, let’s assume you move out of the property after 12 months and turn it into an investment property. Over the next 9 years you could essentially claim est. $68,000 in depreciation for the building and est. $36,000 in depreciation for the fixtures and fittings – $104,000 in tax benefits!
This on top of the fact that interest rates are at the lowest they've been in a very long time and likely to stay that way in the near future at least. Many are finding that the repayments on a mortgage at the moment are equal to or not that much more than paying rent.
A summary of some other benefits:
1. Rentability – I know, it’s not a real word but let’s face it, new is better and tenants always want to rent somewhere nice and comfortable, new accommodates this better than old!
2. Options – High floor, low floor, East, West, North facing etc. Existing doesn’t allow as many options for you, like the layout of an existing apartment but wish it faced North rather than South?
3. Costs – Ongoing costs such as Strata are lower on new than old, the building is covered by a warranty – old property is sold “as-is” and any problems are your problem and these can be expensive
4. Tax – Highlighted above this certainly warrants a second mention, depreciation allows you to claim the maximum tax benefits. Most new apartments will be very close to cash-neutral meaning the out of pocket expense to hold these properties will be very low (if as investment)
5. Quality – Gas to most new apartments, quality kitchens with stone bench tops and fancy appliances, new bathrooms, energy efficient lighting etc. Older apartments tend to have older fixtures and fittings (potentially leading to expensive replacement costs)
Think long term when buying a property... A property you buy brand new today will be 20 years old in 20 years time, compare that to a property that is already 30-40 years old today, we’re now talking 50-60 years old!
Buy brand new and don’t worry about the head-aches associated with old property!
Thinking of taking advantage of some of the great incentives around and buying off-the-plan? iBuyNew can help you choose the perfect property for your needs, whether that be a house and land package, townhouse or apartment.