Ask about incentives when buying property 'off-the-plan'

With purchasers finding it increasingly difficult to secure the purchase of a property at auction, many are turning to private sale negotiations to buy a property not yet constructed based on plans and specifications. This is called buying "off-the-plan" and is regulated by the Sale of Land Act 1962 (Vic). 

When negotiating to buy a property "off-the-plan" be sure to ask the selling agent or developer if they are offering any incentives to you as part of the sale.  Many developers do this to sweeten the deal and ensure a quick sale. 

There are many different incentives a selling agent or developer can offer.  The more common incentives we see in off-the-plan contracts are:

1. A one-off contribution by the vendor to the purchaser's legal costs of say $2,000 (including GST);
    
2. Inclusion of a 'blinds package' (window furnishings to all windows) which must be installed in the property by the settlement date;
    
3. A stamp duty rebate paid to you at settlement by the vendor provided you effect settlement on the due date.  The rebate might be a partial or full reimbursements of stamp duty liability, remembering that you are entitled to a reduced stamp duty liability when buying "off-the-plan";
    
4. A free or discounted purchase price for an accessory lot, such as an extra carspace or a storage area;
    
5. Interest which accrues on the cash deposit (the deposit being usually 10% of the purchase price) is payable to the purchaser at settlement.  This is on the basis the purchaser effects settlement on the due date and otherwise complies with all of the requirements of the contract;
    
6. A free optional upgrade of certain item/s in the fitout schedule or for electrical appliance/s in that fitout schedule;
    
7. Free variations to the standard fitout schedule or floor plan;
    
8. Any legal fees charged by the vendor's lawyer, if the purchaser nominates a substitute or additional purchaser/s, being waived;
    
9. Any special condition of the contract which passes on the cost of the vendor obtaining owners corporation certificate/s to provide to the purchaser prior to settlement being waived.  Note that each certificate usually costs $165 (including GST);
    
10. The defects liability period in the contract being extended from say 3 months to 6 months;
     
11. For investor purchasers, a guaranteed rental return being provided at no extra cost (called a 'rent guarantee') for a 1 or possibly 2 year period;
     
12. Some developers might offer other incentives like frequent flight points or a free air ticket to fly to the property prior to settlement to view it;
     
13. For investor purchasers, a vendor might offer a depreciation schedule for tax purposes at no extra cost.  That depreciation schedule would be provided at settlement to the purchaser to provide to their accountant.   

If you are looking to buy a property "off-the-plan" speak to our Property Department today.  Have the proposed contract of sale checked by us and we can discuss if you have been offered any incentives.  You may not have been, and it is worth asking the question in any pre-purchase negotiation.