In Melbourne there are many advantages to investing in off
the plan property. The term ‘off the plan’ refers to the fact
that the property has not yet been built when the contract is signed and
therefore the building itself is not a marketable asset but rather the
development plan is. When the contract is signed for the property the
investor is able to agree the current market price in accordance to the
value of the property at that point.
If the real estate market is rising then when the property contract is
agreed the investor has the potential to make large capital gains against
the rising price of property in the market. By the time the building has
been completed you can have a capital asset that is worth much more than
the amount you paid for it.
As well as having the benefit of an early contract agreement, the investor can save a large sum of money through the reduction in stamp duty that is available in Victoria. The stamp duty that would normally be paid for a new property is not applicable in this case because the building has not been built and the only part of the contract that is available for the duty is the land on which the property will be built. The savings that can be made in comparison to already existing properties are a definite benefit for investing in off the plan properties, particularly in Victoria.
Another extra option that investors get when they
invest ‘off the plan’ is the chance to have a greater relationship
with the developer. The ability to have more control over certain aspects
of the design enables investors to market the property to a certain area
of the market, thus guaranteeing them a greater return in the future.
For more information, visit the investor website: Off the Plan Melbourne