When looking to buy a home, many buyers face one question, whether to purchase an established property, or to acquire land and build a new home.
While both methods offer significant financial benefits, ultimately, the “better” method really depends on the priorities and motivations of the buyer. There are certainly benefits and negatives for both scenarios but these pros and cons really depend on circumstances and personal or family requirements. The key initially is establishing your needs and requirements or those of your current or future family in order to ascertain which is "better" . The below table lists the pros and cons of each option.
Building vs Established
Building:
|
Pro’s |
Con’s |
|
Brand new home |
Length of time required for construction |
|
$10,000 First Home Owners Grant* |
Time consuming – picking out details |
|
Stamp Duty Rate of Concession: - Vacant Land or House/Land Package - Up to $300,000 = Nil - $300,001-$400,000 = $13.01 per $100 |
No established landscape |
|
Less maintenance issues – lower ongoing costs |
You may need to rent while you build |
|
Built to higher energy efficiency standards |
|
|
Creative control – a house the way you want it! |
|
|
Less competition when buying land |
|
|
Less deposit required with FHOG available |
|
|
Full 40 year depreciation schedule if for investment |
|
|
Lower deposit requirement for home loan |
|
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Established:
|
Pro’s |
Con’s |
|
Move in now! |
No First Home Owners Grant |
|
Closer to city & infrastructure |
Greater Deposit Required (due to no FHOG) |
|
Stamp Duty Rate of Concession: - New or Established Home - Up to $430,000 = Nil - $430,001-$530,000 = $19.19 per $100 |
Maintenance issues – can be costly to repair an older property |
|
Established landscape |
Older appliances installed may make for more expensive bills |
|
Renovations can increase the value of property quicker (investment potential) |
Competitive market |
|
Opportunity to buy a ‘character’ property |
Pay stamp duty on the land and house value |
|
|
Greater deposit required with no FHOG |
