- December 19, 2011
- Posted by: admin
- Category: Enconomy, Finance News, Financial goals, House prices, Wealth
|If there’s one topic property investors rarely agree on, it’s what makes a better investment: old or new?
Proponents of buying ‘old’ argue that established dwellings are typically more affordable and can be renovated to create equity, whereas those buying ‘new’ argue that this is outperformed by the tax incentives that new properties deliver.Confused? Here are the arguments for both sides of the debate, but remember there’s no ‘right or wrong’ answer, regardless of which corner you stand in! Old and new properties both have distinct, unique advantages and what counts as an investor is that your decision matches your individual strategy and goals.
Reasons to buy ‘New’:
1. Tax depreciation – If you’re an investor, one of the big advantages of buying a newly constructed property is that you can claim depreciation as a tax-deductible expense. This includes the depreciation of assets in the buildings and the cost of the building itself, as well as for wear and tear on fixtures and fittings in the property. The newer the property, the higher the level of depreciation.
Reasons to buy ‘Old’:
1. Equity – There is little opportunity to add value to a new home, whereas the investment made in an old home can grow in the future should you choose to renovate or extend.