The Top Reasons to Buy an Off-The-Plan Apartment This Year

Why Now's an Opportune Time To Buy Off-The-Plan

Discerning property buyers are becoming more strategic at recognising the opportunities an off-the-plan apartment can provide. It’s one thing to find a fabulous property within your budget, but buying before construction commences presents potential opportunities if you know your options and execute your plans well.

Investing in Pre-Construction Properties

Buying a property before it’s built may offer you something that buying an existing property does not — the luxury of time. You pay the deposit and secure the sale, but you usually don’t need to pay the balance until the property is completed. This could be a few months or a few years, depending on the development and your entry point. During this time, you get to watch the local area develop as the project nears completion while allowing you to put more money aside to service your mortgage or organise your financing needs.

Off-The-Plan Stamp Duty Savings

For many, the payment of stamp duty is an inescapable pain point in buying your dream home. But the good news is that buying off-the-plan apartments in Melbourne at current market value means that at that moment, if you and the property are eligible for the off the plan concession, the dutiable value of your property will be the contract price less any construction costs incurred after the contract date. ^

In Victoria, an off-the-plan concession reduces the amount of duty you pay by reducing the dutiable value of the property.  The concession allows the costs of construction that occurs on or after the contract date to be deducted from the contract price. In an example by the State Revenue Office shared, a buyer purchases an apartment off-plan apartment in Melbourne for $620,000, signing the contract before any construction has commenced. The value of the construction of the apartment will be $465,000. This means the buyer’s dutiable value after applying the off-the-plan concession is $155,000 ($620,000 - $465,000) rather than $620,000 — a major saving in stamp duty. 

The further that construction has progressed before entry into a contract, the less the stamp duty saving available under the off-the-plan concession.  

Know your incentives

The Victorian Government’s off-the-plan duty concession is an incentive that offers a stamp duty concession, assuming a buyer fits a few key criteria. Eligibility depends on a number of measures including whether you can claim first home buyer incentives, whether your new property will be your home (or an investment) and most importantly – when you signed the contract.

The off-the-plan concession can apply to land and building packages or apartment developments if they fall under the relevant threshold. If you and the property fit the eligibility criteria of the first home buyer or principal residence incentives, the off-the-plan duty concession is within your reach. 

Buy Off-the Plan with The Victorian Homebuyer Fund

For people taking their first step on the property ladder, organising financing and selecting a property that aligns with their budget and lifestyle in a booming market can be daunting experiences. With the CBD experiencing an annual compound growth rate of 7.5% for units, it can mistakenly seem almost impossible to secure your first home.

However, many support programs targeting local communities can help you submit competitive bids for Melbourne apartments for sale. One popular tool is the Victoria Homebuyer Fund, which contributes up to 25% of the total cost of purchasing a property in return for equity. You can either repay this interest-fee loan early or when the property has sold.

If you feel a program like this aligns with your property strategy, you'll need to meet some criteria to qualify, such as:

• Be an Australian or New Zealand citizen or permanent Australian resident.

• Be 18 years old at the time of settlement

• Have saved 5% deposit and earn under $135K pa as a single person

• Have no other claims to property in Australia or abroad

• The property costs less than $950K in metropolitan areas

Mirvac’s distinctive appeal

For over 50 years, Mirvac has been reimagining urban life and delivering some of the most awarded and talked about residential developments. If you've been eyeing some of our current residential apartment offerings, The Albertine should be at the top of your list.

Boasting a sculptural architectural facade, wellness-boosting amenities, and a prime location overlooking Albert Park Lake, The Albertine by Mirvac is home to coveted off-the-plan apartments for sale. If you're ready to launch The Albertine as the first of many in your portfolio, explore our news and event page to stay informed of the latest updates. Or, for any questions you may have, feel free to contact our sales team, who can also host you on a tour of our display suite. 

The contents of this article are provided for general information only and do not constitute financial or tax advice or opinion of any kind.  
^The information in this article are taken from https://www.sro.vic.gov.au/offtheplan and  https://www.sro.vic.gov.au/fhbduty as at 04/03/2024 The information is believed to be correct as at that date. However, Mirvac does not make any representation or warranty as to the completeness  or accuracy of the information. The reader assumes the entire risk of relying on the information.  To the extent applicable by law, Mirvac (and its related companies): (a) does not make any express or implied representation or warranty that the information is accurate, current, complete or correct, (b) does not accept any liability or responsibility for or in relation to any errors in, or omissions from, the information; and (c) will not be liable for any cost, loss or damage resulting from this information. Mirvac does not provide financial or tax advice and the information provided in this article should not be relied upon as such. You must make, and must rely on, your own inquiries and obtain your own independent legal, financial and tax advice (including satisfying yourself about your stamp duty obligations and eligibility for any off-the-plan concessions).