Off the plan properties are becoming an increasingly viable way to invest in the current market place. The potential for larger returns upon your investment are making them an attractive proposition for investors. In Victoria there are significant tax breaks and great savings can be made through the reduced stamp duty. The stamp duty is calculated based upon the land and the property upon it, but since you are paying upfront and there is no building as yet, then you are only paying for the value of the land as it stands. The developer will generally offer lower prices for the property in order to lessen the financial risk for themselves and therefore there are opportunities for bargains.
As final payments are only due when the building is completed this allows the investor to restructure and refinance themselves in light of the financial commitment. This means that in a rising market you are maximising your returns without opening yourself up to a large financial burden. By purchasing ‘off the plan’ the investor is also able to fix the contract at the initial point of purchase, which would mean paying the price of that day. If the market is gaining a rising momentum then you would be able to get capital gains in excess of the later point of the market because your investment would be rising continually in value.
There is also the benefit of having a wider choice on how the building is appointed, with fixtures and fittings and internal styling. Considerable tax advantages and depreciation can be gained on these things, on top of the choices you get to maximise your rental yield and financial returns.
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