Purchasing “off the plan”.
In Victoria, there are a number of advantages in purchasing property “off the plan” before construction has commenced.
- There is often a significant saving on stamp duty, where you only pay a fraction of the full stamp duty otherwise payable.
- Upon signing the contract you can elect to pay the 10% deposit in cash (as opposed to a bank guarantee), which should then be invested in an interest bearing account by the Vendor’s Solicitors. Therefore, you can accumulate interest on your deposit if the condition allows for this.
- Paying the balance of the purchase price after construction is completed also allows more time to get your finances in order.
- You may be able to choose from different internal colour schemes, quality finishes, and upgrades on fixtures and fittings.
- You will end up with a new apartment or lot; and
- You can obtain a depreciation schedule which is beneficial from a tax perspective.
However, when buying “off the plan”, it is essential that purchasers have an eye for detail, understand the impact of changes made to the plan of subdivision and are kept well informed of any amendments to their lot or the plan in general.
Before signing a contract and committing funds, it is imperative that purchasers do research on the proposed property and the builder and seek professional advice.
Any further questions please contact Julia Thermos or a member of our Property Law Team.
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