Tossing up between buying off the plan and established?
Here are the pros for buying off the plan!
Giving you time to save
Many first home buyers like buying something off the plan because it gives them more time to save for their initial deposit compared to established.
Buying off the plan enables you to secure land, or a house and land package, that suits your financial capability. An initial deposit of $1,000 is all you need to secure the right block of land to suit your dream home. Upon signing your land contract, the balance of your 5% deposit is payable and no further payment is required until your land titles (which depends on your loan arrangements). In the meantime, whilst you are waiting for your land to title, you are able to work with your chosen builder to finalise your build costs. You also have the time between paying your deposit and settlement to continue saving for upgrades, items for your new home or allowing for unexpected costs. This transparent and upfront process can be more agreeable, particularly if you are working with a tight budget and need to know exactly the amount you have committed to.
Buying off the plan allows you to enter the market on your terms. You are not subjected to attending multiple auctions week after week praying for something to sell within your price range. You already know the total cost of your land or house & land package (fixed only). With established homes, you also have a shorter window to settle, generally either 30, 60 or 90 days and need to allow for stamp duty fees.
Another advantage is that we work with many builders who also offer saving plans for first home buyers. Ask our sales team to point you in the direction of these builders if that sounds like something that interests you.
5% is all you need!
Here at Botania all you need to secure your lot is an initial deposit of $1,000! This secures your land whilst you review your contract with your conveyancer. The balance of the 5% deposit is required upon signing your land contract. At settlement, after your land has titled, any further payments are made by your banking instituion on your behalf in accordance to your loan conditions. Anticipated title dates vary between stages in a community and can generally range from 9 months up to 18 months. When choosing the right block of land to suit your needs, you can choose one with titles further out, so you have plenty of time to save.
Saving on stamp duty
If you buy an established home, you will most likely pay land transfer duty (otherwise known as stamp duty).
Depending on the value of your home, you may be able to claim a duty exemption or concession.
First-home buyer duty exemption – A one-off duty exemption is available if your new home is valued up to $600,000 and will be your principal place of residence (PPR).
First-home buyer concession – You may be eligible to claim a discount on your stamp duty if your new home is worth between $600,001 to $750,000 and it will also be your principal place of residence.
When you buy a block of land, stamp duty is only calculated on the value of the land, which may mean you will not be required to pay for stamp duty at all. Whooppee!
Receive $10,000 from the government with the First Home-Owner Grant!
That’s right, $10,000 from the government for nothing! Pretty sweet huh?
If you build a new home valued up to $750,000, you may be eligible for the First Homeowner Grant (FHOG).
Find out more here – https://www.sro.vic.gov.au/first-home-owner
Avoid the negotiations
Never been a good negotiator? Buying off the plan can save you the trouble!
When choosing to buy established, conditional/unconditional loans, settlement timeframes and deposit amounts are all factors that can influence your attractiveness to a vendor. Any offer you present is at the vendors discretion. This is where second home buyers and investors can win out over first home buyers in negotiations if they have a bigger deposit amount saved or the imminent sale of a home behind them.
We hope we have put together a good case for buying off the plan. At the end of the day, we know that you will make the right decision for you at this stage of your life.
Most importantly, buying off the plan is great as you have the fun and freedom of designing your home and being the first one to live in it!
Have more questions about what buying off the plan is like? Our friendly sales team are happy to help and answer any queries you may have.
If you wish to speak to our sales team, please feel free to reach out on either of the following methods: