“Since I was 19 I’ve sold new homes ‘Off-Plan’, so I know what a great deal it can be for the buyer and the seller.”
Lance Trendall, owner of The Land Office
The buyer often gets the chance to personalise their home by choosing fittings from a range offered by the builder. This can give the homeowner their dream kitchen and save the builder the difficult task of specifying the home to match the fashions of the market.
Buyers might make a saving in stamp duty land tax (SDLT) if they buy the land and then enter into a separate ‘build contract’ as SDLT may only be payable on the land price.
The Land Office does not offer tax advice so professional advice would be needed from an Accountant before entering into any off-plan purchase.
The builder benefits from selling off-plan because they can de-risk the new build project earlier, which gives them and their bank peace of mind so a builder might get finance to buy their next site sooner. This can give an extra tranche of profit each year if they get the timing right.
If a new home is built for the owner with stage payments (payments made as each stage of construction is reached) then the finance costs are reduced, which gives the builder a saving that he may share by discounting the new home.
Some builders prefer to present their finished product as a beautiful show home so it can be fully appreciated, so not all new homes will be available off-plan.