With the current heated property market and a shortage of stock, buyers are looking for alternative ways to get into the real estate market. One option you may not have considered is buying an apartment off the plan. Buying off the plan means exactly that. You are buying an apartment that is yet to be built. In any new developments, the developer will have a project display suite that you can visit to get an idea of the apartment layout, view the 3D model of the building and experience the quality of the fixtures and furnishings you are committing to, as well information about strata levies and the onsite amenities for the building such as a gym, a swimming pool or even cafes and restaurants. While it may seem daunting to sign a contract for an apartment that is yet to be built, buying off the plan has some definite advantages. One of the biggest advantages is that you will only need a 10 per cent deposit upfront, with the balance due upon settlement. This provides you with valuable forward planning and time to save, arrange finances or sell an existing property. Also, by getting in early, you will have the opportunity to take advantage of any early bird incentives, as well as being one of the few to select the best unit outlook within the building. If you are an investor and are planning to lease the property, there are also significant tax benefits, via depreciation. And in Western Australia, the State Government recently announced the extension of the Off-the-Plan Duty Rebate Scheme for another two years to 24 October 2023, which reduces from 75 per cent down to 50 per cent capped at a maximum of $50,000 on eligible residential units or apartments prior to construction commencing. Contracts for purchases of this nature are understandably more complex so it may also be worth engaging the services of a solicitor who can ensure the contract acts in the best interests of both parties. It is important to remember you are benefiting by buying in the current market, and with issues relating to labour shortages and material cost implications, you will want to ensure your contract is fixed price and not subject to any provisions for cost increases. With this in mind, it is important to research the reputation of the developer. Do your due diligence and make sure the developer, builder and architect have a good track record and a history of delivering on time.
THE ADVANTAGES OF BUYING OFF THE PLAN IN A RISING MARKET
Updated: Aug 18, 2022