With a fixed price contract before construction starts, lower loan-to-value ratios and deposit conditions, and a home built to high standards, it’s not surprising that buying off the plan is attractive, especially for first home buyers. If you’re considering building your own home or buying into a brand-new development, here are some things to consider when financing the construction of your new build.

Buying off the plan means agreeing to buy a property from a developer before it has been built or while it is still in the process of being built. There are many compelling reasons why buyers choose to buy off the plan. 

• Loan to value ratio restrictions don’t apply to newly built homes, which is appealing for first home buyers who may be struggling to save a deposit.
• Buying off the plan can be more affordable because it removes having to pay for LIM reports, building inspections and valuations ahead of an auction which you may not win.
• Homes are built to higher standards and generally require less maintenance, and most are covered by a warranty for the first 10 years.
• A fixed price means potential capital gains if house values improve while the home is being built. However, you need to be aware of possible capital gains tax liability and seek professional advice from your accountant before choosing this option.