Buying Off the Plan

BUYING Off the Plan refers to purchasing residential property that has not been built. What you typically get are floor plans, elevations, a site plan and inclusions.

Off the plan is a popular choice for many home buyers in Canberra and will continue to be popular, especially with first home buyers and a large number of empty-nesters. When buying off the plan, home owners often have up to two years to get their home into the best possible state to go to the market, whereas younger people buy off the plan because it gives them the extra time they need to save their deposit and save money for soft furnishings.

If you have a property to sell, buying off the plan will give you time to sell or refinance. It will also allow you to secure your new home or investment property with a nominal fee and exchange deposit, which means you don't have to worry about paying for both properties.

There are alternative deposits that can be used such as bank guarantees and deposit bonds.

Deposit bonds are similar to bank guarantees. They cover the 10 per cent deposit when exchanging contracts and provide the developer with the security of receiving the equivalent exchange deposit sum if the purchaser does not complete the sale.

If you are buying the property with the intention of living in it, you do not require a mortgage until completion. If settlement is longer than 12 months, you might find that a revaluation at the current market price will allow you to borrow 100 per cent of the sale price.

In some cases, you will be able to escape paying mortgage insurance as well, due to the increased value of the property in relation to finance required to settle.

One of the major benefits to investors in the ACT when buying off the plan is that Stamp Duty is tax deductible.

Many investors buy off the plan with view to on-selling it prior to settlement. Long settlements allow for greater capital growth in the right market.

Whether purchasing as an investor or owner-occupier, buying off the plan gives you a greater opportunity to purchase your ideal location within the development.

Australis Realty specialises in selling off the plan residential apartment, townhouse and housing developments to home owners and investors.

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