What are the key elements to buying “Off the Plan”
or “House & Land” package?

Price
When builder/developers first offer their new products to the market they usually start with lower prices to encourage a faster sales rate. This can be on a project or in an earlier part of a land subdivision. Once developers reach the point that meets their construction finance/estate requirements, prices usually rise. Therefore, for investors who commit early to the project there is often a good price incentive.

Tax benefits
As with all investment property purchases there are some significant tax benefits.
These benefits are greater when property is newer because there are more tax depreciations available. Those benefits are greatest when the property is brand-new so buying off-the-plan maximises your available tax deductions. Currently there is also a range of Government Incentives

Stamp duty savings
Buying a new property saves you money on stamp duty. As an investor you will also gain as you can claim significant tax deductions for depreciation, not only of the building, but also for the fittings. This result can mean receiving the depreciation tax benefit on up to 100% of the property build & fit out price – This is a significant saving to that of most established properties.

Government & Building Incentives
Currently there is also a range of Government Incentives around Australia, from NRAS, $10,000 Qld Building Bonus, NSW “Free Stamp Duty” & some builder’s currently also have incentives too. The choice and reason behind choosing a given property in the right location and price point must not be forgotten and if this property enjoys additional benefits then that is a huge bonus. The property must be right first.
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Savings of funds – Smarter Investing
Buying either “Off the Plan” or a “House & Land” contract means that you have only paid for the stamp duty of current status of the property, which in most cases is land value only. This can mean savings of more than $10,000 & up towards $20,000 for most purchases around Australia. Not needing to find these funds is another significant advantage. When combined with the smarter use of established equity in property then much can be achieved on minimal funds.

Capital Growth Drivers & Re-Sale Value
When purchasing thought is to be given to the day you need to sell this property. It is best to work with an experienced Property Investment Consultant that works with Independent Property as they will best advise you on the key characteristics that will drive its value. Elements such as: Correct positioning of the project/property, position within the development, aspect, floor layout, employment, schooling, infrastructure & key community amenities all of which can influence capital growth & assist in maximising rental yields.

Expression of interest
In making your property selection, you will often be asked for an ‘Expression Of Interest’ prior to receiving the sales documents for the real estate. This is generally a simple form which you complete with the purchasers name/address and other details. At this stage you are asked to provide an initial deposit – usually $1,000 or 2000 or 1% of the purchase price. This initial deposit is fully refundable if you find that you are unable to proceed at this stage.

Warranties on the Build
Once settlement has occurred and you are the new owner of the property, all warranties that apply to the building, fittings and fixtures should be passed to you in a move-in handbook/kit.

Final Or Pre-Settlement Inspection
Once the property is complete, you are presented with an opportunity for a pre-settlement inspection. If you note any defects in the property, you must provide a written description/list of the defects to the builder. The builder is required under building legislation to fix all minor defects within a nominated period pending the State/Territory in Australia.

Property Management
As the property moves closer to settlement, your Investment Consultant will identify the best Property Managers to work with in the area over the duration of the property. Being independent and recommending the best in this area is important. Beware any group that sells the property and attempts or suggests that they can manage the property from a distance. Property Management in the right hands is an easy process of step by step procedure. As most investment locations in Australia have extremely low vacancy rates and with the right style of property you are genuinely spoilt for choice of tenants in most scenarios.