Offplan property is a property before a structure has been constructed upon. Pre-constructions are usually marketed to real estate developers and to early adopters as developments so that the purchaser can secure much better finance terms from their lenders. (Wikipedia)
Below are some of the Frequently Asked Questions.
Off Plan Properties
- How to start buying Offplans?
- What are the payment terms in buying Offplans?
- Why should I buy Offplans?
- What does Offplan property purchase mean?
How to start buying Offplans?
There are a lot of ways on how you can start purchasing offplans. In this website, we feature various offplan properties for residential and commercial.
- Start by browsing. Research the developer especially if they do offplans already. List down all the developers you are interested in and sort them one by one. Yes it takes time, but it is best advised.
- Contact Developer. Always get the right information plus more. Don’t just settle for the information given to your, do your part as well in learning more on your own.
- Budget Carefully. Be skeptical with the payment. Do not pay more than the agreed stage payments even if the developer is asking for more than what was agreed. Keep your focus on the staggered installment.
- Check Measurements. Stay informed. There is no harm if you will understand the terms they use, the measurements and other things stated on the plan.
- Visit. Every now and then after the project started, you can drop by and see the progress yourself.
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What are the payment terms in buying Offplans?
Each development and country has different terms. Developers require stage payments from their buyers throughout the building process. It is best if you can have an agreement with your developer to have stage payments, and stagger these across the full-length of the investment.
Always stick to the agreed stage payment and keep your developers focused on that.Back to Index
Why should I buy Offplans?
There are several benefits in buying Offplan properties where you cannot get in purchasing ready-made properties.
According to Lawyers Conveyancing, here are the reasons why you should buy offplans.
Stamp duty savings
One of the most common reasons given for buying off the plan is the perceived savings in stamp duty.
Stamp duty is payable on the value of the land and building as at the date of the contract of sale. Therefore, if construction or refurbishment is yet to be commenced, a reduced amount of stamp duty is payable as compared with buying an existing or refurbished building.
But be warned, stamp duty concessions are NOT based on what the land value stated by the estate agent or the vendor or the advertising brochure. They are based on the value of works performed on the property after the contract has been signed. The concession will be greatest if the property is sold before construction commences. If the sale takes place after construction has commenced concession will apply only to the work yet to be completed. If all works are completed before the contract is signed it is unlikely that there will be any stamp duty concession.
In order to determine the extent of the concession available, the purchaser must establish the cost of the works performed during the contract period. This can be done by having the vendor provide a Land & Building Packages statutory declaration at settlement. Again, it is possible that the figures stated in the Land & Building Packages statutory declaration may differ from those quoted in the contract or advertising material.
Some purchasers buy off the plan because of possible tax benefits. Off the plan purchases can realise significant depreciation tax savings that are greater than those available on existing buildings if purchased for investment purposes. Depreciation expenses that can be claimed may include building, furniture and fittings.
In addition, a rental property is negatively geared when it is purchased with the assistance of borrowed funds, and the net rental income, after deducting other expenses, is less than the interest on the borrowed funds.
Of course, advice from a financial adviser or accountant should be sought before committing to an off the plan purchase.
Lower purchase price
Developers are often keen to sell as many properties as early as possible, and so prices are usually very competitive. In addition, demand may increase as the development takes shape, the possibility that similar properties purchased closer to completion will be more expensive than those purchased early.
It is often the case that the best properties are sold first.
Lock in the price
The price of the property can be locked in as at the contract date. One or two years down the track you can watch the value of your property grow relative to market movements. Generally, property values increase between the period of buying off the plan (signing the contract) to the date the development is completed.
Time to save for deposit
Off the plan purchases often allow for payment of the deposit by way of a deposit bond, giving purchases time to save enough to cover the 10% ordinarily required as deposit.
Choice of finishes and fittings
Buying off the plan provides the opportunity to put forward any suggestions for design and finishes in the property being purchased, allowing the purchaser to customize.Back to Index
What does Offplan property purchase mean?
“Off plan” purchase is the purchase of real estate that does not actually exist at the time the contract is signed. Even though the purchaser may have walked through a completed house or unit, if the plan of sub-division has not been registered the land does not exist as a single lot.
The situation is the same with unit developments. Building works may not have commenced, but purchasers can enter into contracts to purchase units, chosen by reference to plans of the proposed building.Back to Index
Why choose World Offplans?
World Offplans is the next offplan property destination from all property developers, owners and brokers. This website was developed to cater only the offplans and give highlights to its benefits and features.Back to Index