ACQUIRING
Buy or Build
Which is right for you ?
BY PAUL STEVENS
When making your decision about buying vs . building , there are a number of issues to consider . Building your own home has the potential to be easier than before , particularly with so many developers offering a predefined set of floor plans and options . Building your own home also gives you the flexibility to have things just the way you would like . But even with the added convenience of a developer , there are some drawbacks as well . Price is the most important . Currently it is on average 20 % cheaper to buy than to build …
Pros of building vs buying Building your dream house offers tremendous sentimental value and advantages in the long run . When you build a home , you can have everything your way from the carpets to the cabinets and everything in between , both structurally and design-wise .
There are definitive feelings of emotional fulfilment and pride in a house that has become “ your baby .” Also , having everything brand-new and up-to-date is a tremendous advantage when you build instead of buying an existing home .
Furthermore , the construction materials and building code will be up to the latest safety standards . Modern society is also reflected in a newly built home : everything from wiring for high-speed Internet to the latest in spatial , acoustics and architectural trends can be added without much trouble .
If you are buying an existing home , Transfer Duty is payable on the purchase of a property from a natural person . In the event of purchasing from a developer , the developer will be VAT registered , and the price of the property will include VAT .
The VAT is payable to SARS by the developer at 14 % of the purchase price , but Transfer Duty payable on the purchase of an existing home is payable to SARS by the purchaser . On properties costing up to
R 500 000 there is no Transfer duty , but the more expensive the property , the more Transfer Duty is payable .
… and the cons Speak with anyone that has built their own home and most have horror stories about the project taking too long or exceeding cost expectations . Whether it is inclement weather , problems with obtaining the proper materials , delayed inspections or an overstretched general contractor , building your home from the ground up can come with significant delays .
Going the route of developers is popular but it often limits you to using their floor plans . Developers will typically quote six to seven months to build a home from one of their existing floor plans .
If you decide to buy If you decide to buy you should then decide whether to buy an existing home or from a developer in a new complex / development . If you prefer the latter :
1 You do not have to put up with the previous owners taste and have the choice of deciding what finishes you desire and make your dream home a reality .
2 When buying from a developer , VAT is normally included in the price .
3 You have a 5 year major structural defect warranty as well as a 1 year roof leak warranty .
4 Properties in your immediate are usually also new and still well maintained which will have a positive effect on the increasing value of your home .
5 The initial maintenance cost is low .
RESOURCES
Just Property
28 JUNE 2016 SA Real Estate Investor www . reimag . co . za