First home buyers are attracted to Off the plan purchases because of the generous concessions and exemptions offered by the Victorian Government. Buying off the plan occurs when an individual signs a contract to purchase a dwelling that is yet to be constructed. Before, purchasing off the plan, consider the following;
• Fixed price: Investors prefer purchasing off the plan because they can lock in a price at the time of signing this may allow the property to potentially appreciate in value before settlement.
• Move in ready: Depending on what stage you enter an off the plan, you may be able to make changes to the design and layout to suit your needs. Builders must provide warranties for 7 years against structural defects and 2 years for non structural defects from the date of the Occupancy Certificate.
• Time: Upon signing, a deposit of 10% of the Contract price is paid. Individuals are provided ample time to organise their finance.
• Government Discounts: In Victoria as a first home buyer or if the property is your principle place of residence you may be entitled to an Off the Plan exemption or concession.
• Expiry of Sunset Clause: If the developer fails to complete the project before the sunset clause (required completion date) expires, the purchaser is entitled to a refund of their deposit and the contract may be terminated.
• Contracts are unconditional: When purchasing off the plan properties, it is imperative to note that the transaction cannot be subject to obtaining finance, building and or pest inspections.
• Volatility over Time: Individuals may find it difficult to obtain finance if circumstances change between when they sign and settlement. If you are unable to complete the transaction you risk losing your 10% deposit and may be charged additional penalties.
Thinking of buying off the plan? Contact Conveyancer.com.au for a free contract review today.