How Buying off the Plan Works
OVERVIEW
An investor enters into a sales contract with a developer to buy a piece of real estate based on approved Town Planning drawings. The property is normally a unit or townhouse in a medium to large development.
The most common reasons for buying off the plan include;
- Stamp duty savings
- Tax savings via Tax Depreciation Schedules
- Tax Savings via Negative Gearing
- Lower Purchase price
- Locking in a price but not needing to settle for 18 to 24 months
- Time to save for the deposit or balance
The agreement is based on a sales contract which will include a full description of what is proposed to be constructed. It is common for the document to include;
- Council approved town planning drawings
- Detailed list of fixtures and fittings
- Proposed plan of subdivision.
- Special clauses to guarantee the rights of both the Investor and the Developer
Often additional materials are available to a prospective purchaser, such as;
- Indicative tax depreciation schedules
- Sample boards of fixtures and finishes
- Colour rendered images of the finished product.
Many investors love off the plan sales as they are often able to add personal touches to the internal appearance of a unit. Colours and materials can often be upgraded or modified to suit the needs of the buyer.
The sales agreement will often guarantee that, if a start is not made within a certain period or the works are not completed within a reasonable time, the purchaser can walk away from the deal. It is essential that all parties rights are protected and guaranteed. Deposit monies are held in Solicitors trust funds to guarantee their safety.
Prospect 90 manages the full development process. The developments are predominately residential but may often include a small commercial component. Clients benefit from being guided by a professional team with wide industry experience of over 30 years.
As we are neither financial planners nor legal advisors, prospective investors should seek independent advice to assess their eligibility to the above mentioned benefits.
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