Hi,
I am thinking of purchasing a house which is currently being constructed in Melbourne. It currently has only the foundations.
Is it true if I buy it now that I make siginificant stamp duty savings? The final cost of the house will be $330K.As an aside are developers in Melbourne usually open to negotiation?
Thanks
You can save on stamp duty by buying "off the plan", but I think there is a point during construction where this ends; you may have passed that point if construction has started. Check with the local council on that.
A word of caution with developers;
The houses are quite often overpriced to begin with so check existing house prices in the immediate area first.
The contracts are worded to suit the developer and there are usually a few clauses where you can be kicked out of the contract if it suits them to hold the property and sell at a higher price if the market booms during construction, and you will be held to the contract if the market slumps during construction and the values drop. They win you lose.
The fixtures and fittings section of the contract can be quite vague; they can substitute the ones mentioned for something else; quite often inferior and cheaper.If it is in a new subdivision many of the properties may be purchased by investors, so you may be surrounded with tenants which is not good if you are looking to find a tenant yourself, or if you are looking to owner/occupy.
Hi Pman,
Marc is right with this one. The developers who know what they are doing can end up making a healthy return from the sale of there property and there are developers who may be getting rid of the property due to lack of funds who may have no idea and you get a pretty nice return once the property has been completed. However, the only way to determine that is by the valuation done on the property.
Also, there are limitied lenders who will take on the a partially completed construction property, so do your reseach. Make sure if you do proceed that your broker advises the lender of what the property is as you dont want to get so far and then they find out and say well we cant do this sort of property.
To be honest I work for a lender who deals with this sort of property regularly depending if owner builder or fixed price. So, this is why I can offer this advice.
Cheers
Andrew
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