- From savings on near-future repairs to bespoke fittings and fixtures, there are many benefits to buying a newly built home.
- When scouting the development show home or plans, consider the volume and layout of the rooms and not just their spatial footprint.
- A house that blends seamlessly with its surroundings and boasts plenty of natural light will command a premium when it comes to resale value.
- Consider the home’s longevity. Are there frail-care facilities on-hand and good transport links should mobility become an issue?
Whether you’re a first-time buyer, have a growing family or are downsizing in later years, there are many benefits to be had from buying a newly built home.
“New-build homes are appealing to buyers for a number of reasons,” says Rhys Dyer, CEO of ooba Home Loans, South Africa’s largest home loan comparison service. “For starters, repairs and redecoration costs should be minimal for the first few years and, if the property is built to the correct standards, homeowners can enjoy lower running costs and energy bills.
“Buyers can often select fixtures and fittings to tailor the property finish to their own tastes and new properties also usually come with structural guarantees. And then, of course, there is the simple fact that many people like the idea of being the first to live in a new home.”
The benefits of buying in a new housing development
While there are many benefits to buying a new-build home, the fact that it is newly built means additional factors you need to take into consideration. You’ll be the first to live in the home and, as such, there’s no one who can provide you with a first-hand account of the living experience, you’ll need to investigate that yourself. Here are some questions you should ask:
No Transfer Duty
“The payment of transfer duty only applies when a property changes ownership, which is obviously not the case with a new build,” explains Rhys Dyer.
“In South Africa, any existing property priced over R1 000 000 requires the payment of a transfer duty, which increases exponentially with the cost of the house. Where transfer duty does not apply, such as on the sale of a new-build development property, the savings can be significant. For example, the transfer duty on a R1 250 000 property amounts to R7 500 (including VAT). This is a valuable saving, and some developers even include registration costs in the price.”
In the absence of the payment of transfer duty, you will have to pay VAT, as the house is registered in the name of a development company, and is thus subject to a tax on the sale of immovable property.
Nevertheless, you will still pay less tax on a new build than you would have done were you to buy an existing property from a VAT registered private seller. As Dyer explains: “The difference is that a new development property is registered at the minus-VAT value.
The home doesn’t feel “lived in”
A new home is a fresh new environment, ideal for someone who’s looking to embark on a new chapter with their family. There’ll be no signs of the home having been lived in, of a previous family having occupied it, to break your immersion.
New-build homes are constructed with energy efficiency in mind, often incorporating green technology.
Less maintenance costs
While the home will still need repairs at some point, for the first few years at least, the chance of you having any major issues are low. So while buying a new-build home may be more expensive in a lot of cases, it’s balanced out by how much you’ll save in maintenance costs.
Questions to ask when buying a new-build home
While there are many benefits to buying a new-build home, the fact that it is newly built means additional factors you need to take into consideration. Rhys Dyer suggests what to look for when buying a new-build home:
1. Are the rooms spacious?
Most people consider space when looking at the size of their house. However, measurements in sales brochures are usually based on the floor area only. What about volume?
“We all hear about the benefits of high ceilings in older houses providing an extra sense of light and space. And now house builders are beginning to take volume into account when planning new developments,” Dyer says.
He adds that buyers should watch out for builder’s “tricks”, such as using large wall mirrors or glass furniture to make show home rooms appear larger than they actually are. “When viewing a show home it is always a good idea to take a tape measure with you!”
2. What’s the layout like?
You probably do consider layout when looking at a potential home – and we all know that too quirky a set-up can be off-putting. But it’s how we consider it that’s important, as Dyer explains.
“It’s not just about how it looks,” he says. “Consider how the space will actually be used. If you have young children, will you need to keep an eye on them while you’re cooking a meal? If so, open-plan spaces will work best for you. It’s much the same for those who enjoy hosting parties – open-plan spaces mean you won’t need to box people off into rooms. It’s much more sociable.
“However, for people who work from home (or for those who simply just like the peace and quiet), smaller, closed off spaces are great for creating quiet rooms or offices from which to work and relax.”
3. Is there natural light
It’s not simply about having a room with large windows. It’s about how that light flows through the house. “If you can open the front door and see through to the garden, you’re going to enjoy a really strong sense of space and light in your home,” says Dyer.
“It doesn’t have to flow all the way from the front to the back, however, if the light can transcend multiple rooms, you’ll definitely feel the difference,” he adds.
4. How does the property blend with its surroundings?
Love an area for its character? Then look at the big picture and consider how the development sits within its surroundings. If it doesn’t feel well integrated, it might not be the place for you.
“Not only should you consider how you’ll use your new home, but also how you’ll use the outdoor space that surrounds it,” says Dyer. “Have nearby areas been landscaped and are they well lit for when you’re walking your dog on a winter evening? Is the area immediately outside your house closed off and is it a safe place for children to play? And how private is your garden? Are there any windows directly overlooking it?”
5. How future proof is it?
If you’re planning to make this your forever home, you might want to consider what facilities are available nearby in case mobility becomes a problem, Dyer advises. Is there a doctor’s surgery close by? Are the transport links good?
“There’s a growing trend for new developments to make it possible to incorporate extra care and facilities as you need them,” he notes. “Having extra care on site means having access to necessary support and, often, clinical staff as well. These extra facilities can add enormously to the home’s resale value should you eventually decide to sell,” he adds.
Buying a home
If you’ve got your eye on a new-build home, we can assist by submitting your home loan application to multiple banks, allowing you to compare deals and get the best interest rates on your home loan.
We also offer a range of tools that can make the home buying process easier. Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.
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