Who doesn’t love the idea of moving into a brand new home, set in a safe community environment that will give you the opportunity to enjoy a lock-up-and-go lifestyle? It is, therefore, no wonder that new developments are sprouting left right and centre, as property developers battle to keep up with the demand for lifestyle estates. We’ve got some insider tips from ooba Group to help you understand the benefits of buying into a new development. Take a look:
Buying Off-Plan: yay or nay?
Buying a property before it has been built can be a scary step, as you need to trust that the development will actually be all the good things the developers and architects are promising you on paper. This option is, however, often much cheaper as deposits are lower than if you were buying an existing unit. Bond repayments are also delayed until construction is complete – giving you up to 24 months to put money aside and budget accordingly.
Save on transfer duties
New developments love adding the words “no transfer duty” on their marketing material…and for good reason. Transfer duties only apply to existing properties (priced over R1 000 000) that change ownership, not when buying a newly built house. This means, you could save significantly when buying a property especially if you are looking at buying an upmarket home, as transfer duties increase with the value of the house. Take a look at this example: the transfer duty on a R3 million freehold home is calculated at R146,000 and R256,000 for a R4 million freehold home.
Cut down on VAT
Even though there is no transfer duty payable on a newly built home, you do still need to pay VAT, as the house is registered in the name of the development company and is still subject to tax. Buying a new build does mean you will be paying less tax compared to buying an existing property from a VAT registered private seller.
