Buying Off-the-Plan
There are many good reasons to purchase property off-the-plan.
Often significant capital appreciation can occur during the construction period for off-the-plan purchases. Delayed settlement, some stamp duty savings and higher taxation benefits are other important advantages.
Capital Appreciation
Many Purchasers have benefited tremendously from growth in the market when investing off-the-plan with as little as a 10% deposit or even easier a Deposit Bond or Bank Guarantee which can require no initial cash outlay at all. Historically, CPI generally pushes up land acquisition and construction costs during the holding and construction periods. Purchasing in key locations such as water viewing or golf course fronting, is also likely to ensure a high probability of capital appreciation.
Stamp Duty Savings in Australia
You only pay stamp duty on the contract value of the apartment at time of purchase rather than the final value at completion. This can result in a stamp duty saving if the actual value of the property has increased by the time of completion. There is no stamp duty payable in New Zealand.
Taxation Advantages
By purchasing brand new property you get significantly higher depreciation claims for tax in both Australia and New Zealand. This is very relevant if you are intending to either permanently or holiday let your property.
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