- Buying off-plan means you’re buying in a new development that has yet to be completed.
- It has financial advantages, such as lack of transfer duty.
- Buying in a new development means state-of-the-art security, a wealth of facilities, and the exhilaration of being the first to live in the new apartment or house.
New developments are springing up all over South Africa, and they cater to the needs of modern homebuyers. Some of them are referred to as “COVID-babies” because they were designed with the pandemic in-mind, providing facilities such as restaurants and gyms within the complex.
It’s exciting to buy in a new development, knowing you’ll be the first to live in your apartment.
But what if the development is still in progress and you want to get in before anyone else? Can you buy in a development that’s yet to be completed?
You can indeed. It’s called “buying off-plan”, and here’s what you need to know about it.
What does buying in an off-plan development entail?
You’ll be basing your decision on architectural designs and 3D recreations of the complex. Depending on what stage of construction the development is in, home viewings may be possible.
Does it seem risky? A lot depends on the developer and how reliable they are. That’s why it’s important to do your research. Look up the developer to see how well they’ve done with past projects and how well the final product has matched designs.
The financial benefits of buying off-plan
Buying off-plan is actually more affordable, for the following reasons:
- You only have to start repaying your bond once construction is complete. This gives you months, maybe even years, to save for the repayments and budget accordingly.
- You pay no transfer duty. Transfer duty, a tax paid to SARS, is normally required on properties worth more than R1 000 000, but does not apply where the purchase price includes VAT.
The benefits of buying in a new development
Of course, aside from the financial benefits of buying off-plan, there’s a number of reasons why the demand for new developments is so high.
Whether it’s an apartment in a new complex or a home in a sectional title unit, many new developments emphasise security and a sense of community.
In addition to that:
- You’ll be the first to live in it and can choose furnishings and fittings to fit your taste.
- New developments have state-of-the-art security, such as biometric access, CCTV, and in the case of sectional title units, perimeter fences.
- Many new developments try to gain some independence from the grid, with backup generators and boreholes.
- Amenities such as internet and DSTV are often built-in.
- New developments are energy efficient and incorporate green technology.
- New developments aimed at young professionals will have easy access to business hubs.
Important tip: Get prequalified before buying
Prequalification will give you an idea of what you can afford on your home loan.
This is important information to have before embarking on any property purchase, let alone one in a new development.
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