In Australia, and particularly in Victoria where stamp duty can be quite high on established properties, home buyers and investors spend quite a lot of time debating abut whether to buy existing or build new. There are substantial pros and cons for both types of purchases, so the key thing for you to do is work out which benefits match your current needs – and go with that!
Build New Pros & Cons
Pro: It’s brand new 🙂
- Pro: It’s customised to your taste – so you don’t have to deal with or fix someone else’s choices.
- Pro: You know exactly what comes with the house, as inclusions will be outlined in your building contract and specifications.
- Pro: Low to no maintenance required once you move in.
- Pro: Stamp duty will be significantly less, since it’s not an existing property (you only pay duty on the land purchase price), meaning more money for your deposit or wallet!
- Pro: Depending on the situation, foreign investors can purchase this type of property.
- Con: You can view displays and examples, but you don’t see what you bought until it’s built.
- Con: You have to wait for completion to move in or take possession.
- Con: Depending on the block you build on, the landscaping might not be established.
Buy Existing Pros & Cons
- Pro: You can touch and feel exactly what you’re buying.
- Pro: You can move in straight after settlement.
- Pro: It’s likely to be have more established landscaping.
- Con: It’s an older home.
- Con: It’s likely to need updating and upgrading to suit your taste and current trends.
- Con: You probably won’t know or be told everything the house comes with (good and bad).
- Con: It will probably require immediate maintenance and repairs.
- Con: Stamp duty will be substantially more, adding financial strain to your wallet.
- Con: Typically, foreign investors cannot purchase this type of property. Read more here.
What to do next?
So, should you buy existing or build new? Naturally, it all comes down to how you feel about (1) waiting to get what you want and (2) how much money you have to make the purchase. If you can’t wait to move into your own home or to make an investment – and – are happy with paying a large amount of money in stamp duty, then buying existing may suit you just fine.
But something to keep in mind: stamp duty, while essential, is 100% government tax, so that lump sum doesn’t go towards your home or investment’s equity at all.
On the other hand, if you can wait just a little while before the property is completed – and – are keen at keeping more of your money in your own pocket, then building new is likely the perfect avenue for you.
Find out more about buying & building new.
Whether you’re a home buyer or a property investor, leveraging money in your favour is always a good thing! So purchasing a new build, or buying a unit or apartment in an ‘off the plan’ development, means there’s less stamp duty to pay. And the less stamp duty that’s required means there’s potential to add that money towards your deposit – or another property!
Contact us today to find out about our fixed price house & land packages, new construction services, and ‘off the plan’ investment opportunities.
Please note: The information provided in this post is general in nature only and should not be considered financial advice. It has been posted without taking into account any of its viewers’ objectives, financial situation or needs. Before acting on any information, you should consult a license financial professional, as well as consider the appropriateness of the data, having regard to your own objectives, financial situation and needs.