We often get asked, "should I purchase a new home or an established property?"
When buying an investment property it's important to consider the benefits that a new property provides, in comparison to an already established one. Such benefits include increased tenant appeal, warranty and maintenance, the ability to maximise on deductions, and importantly the government incentives that come with new build homes.
Keep reading to learn more about these benefits.
The ability to maximise tax depreciation costs
When buying an investment property it's important to consider buying new due to the benefits of tax depreciation. In Australia, if your investment property was built after 1987, you may be eligible to claim depreciation at a rate of 2.5% of up to 40 years.
Greater tenant appeal
Generally speaking, new homes offer greater tenant appeal. When buying an investment property, it's important to consider the amenities, appliances, and technologies that new homes have in comparison to an established property.
Furthermore, newer properties attract higher quality tenants. Such tenants are more willing to pay higher rental prices. This means that the risk of having a vacant property is lower than that with an established property.
Warranty and maintenance
If you're buying an investment property that's a new house and land package, you can have peace of mind in knowing the greater your builder's warrenty time period is.
New properties offer minimal maintenance on internal and external features. These features tend to only need fixing and replacing as the property gets older. Newer homes also tend to be easy in their upkeep as they're generally made of quality materials.
Government incentives
When purchasing a new home as an investment property, you may be eligible for government incentives and savings. Two big savings include the First Home Owners Grant and savings to stamp duty.
First Home Owner Grant
If you're a first home owner, you may be eligible to receive funds that can help reduce the upfront costs of purchasing property or building your very first home. The value of the First Home Owners Grant differs for each Australian state and territory. In Queensland it's generally $15,000 and $10,000 if you're purchasing in Sydney or Melbourne.
Stamp duty savings
If you purchase a new house and land package you may be able to save money on stamp duty. Depending on where in Australia you're located, you may only have to pay stamp duty on the land value when purchasing a house and land package. This means that you can save anywhere between $10,000 to $15,000 on this government tax.
Thinking about buying an investment property?
Real Estate Investment Finance are working with clients across the country to build their property portfolio. We have access to over 10,000 new properties across Australia. If you're interested in investing in property, please reach out to our team today!
Our contact details are listed below:
Ph: 1300 130 932
Email: clientservices@reif.com.au
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