Buying off the plan is a great way to get into the property market. Of course, before you buy you need to do your research, as with any purchase. So let’s look at my six reasons why buying off the plan will work for you.

1. Saving on stamp duty

One of the biggest reasons, particularly in Victoria, to buy a property off the plan is the savings in stamp duty. Stamp duty costs can be cut by vast amounts if you purchase in the right area at the right time. For example, I have previously helped a client purchase a unit in Melbourne with a stamp duty cost of under $1,000. The advantage is gained due to the laws in Victoria allowing for the land to be divided up before completion and the stamp duty calculated based on the land value and not that of the finished unit. 

Paying stamps on land also has benefits when buying a house and land package off the plan as again, the stamp duty is calculated on land value. 

2. Depreciation benefits

When you buy off the plan, you get to maximise your depreciation benefits. Getting a good depreciation schedule can save you thousands in tax and drastically improve your cash flow position. Buying off the plan also means you get to enjoy the maximum number of years allowed to claim.  

3. Repair cost savings

If it’s a brand new home or unit, the repairs should be minimal as long as you have done your research into the builder, and chosen decent fixtures and fittings. This doesn’t mean that things will never break but given that it's new, its less likely.  

4. Lower power bills

Your property should be built in alignment with Australian energy standards. What this means for you is a more efficient home, costing you less in power than an older home would. If you spend the money on solar panels you could even put money back into the grid!

5. Increased value 

Buying off the plan can, in some circumstances, result in you turning a profit before the property even settles. If the developer prices the property at today’s prices and the property doesn’t settle for another two years. You could be in for a nice two years of capital growth, particularly if the market heats up soon after you purchase your property. The extra advantage to you, is that those two years of growth have only cost you the deposit, and no stress or other overheads from the property. 

6. Your finance

You may have the deposit, and the cash flow to afford a property, but there may be one or two things that you need in order to complete your purchase. Having the extra time between accumulating the ten per cent deposit and the settlement can help you get everything together and complete a purchase at today’s prices.

See also:

How to personalise an off-the-plan home

Off-the-plan apartment price hike in Brisbane

The best and worst suburbs to buy off the plan