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Guide to buying a house and land package

May 29, 2023
Samantha Thorne

If you’re an aspiring first home buyer or investor, you’re probably exploring all the ways you can achieve your dream of securing a home. 

You’ve probably heard about house and land packages, but do you know exactly how they work? Our guide will answer your questions and hopefully put you on the right path to unlocking your front door!

Types of house and land packages, and where you can find them

Property developers acquire land as it’s released by the government and provide two different types of house and land packages for the buyer to choose from. The first is to buy your land and then build your home with a construction loan.

The second is to buy the house completed on the developer’s land. Referred to as ready built ‘turnkey’ packages, this means your home is ready for you to move into with a fully fitted kitchen, bathroom, flooring and more.

Advertised with a single, fixed price for land and construction, you will know all the costs upfront and the expected time frame for the build. This peace of mind when it comes to knowing what you’re going to pay makes home and land packages an easy choice for many first home buyers, especially when house hunting can be stressful and fraught with a lack of transparency. 

You may be aware of new estates popping up in your local area, but you can also find house and land packages advertised on major real estate listing websites. However, reaching out to property developers directly can help you find the right package and can be more informative.

Be sure to shop around, investigate other estates they have developed, and explore all the packages available by various developers. There are a lot of questions to ask when buying a house and land package, so make sure they are answered by your developer.

What’s involved in buying a house and land package?

The real difference between buying a house and land package and buying an existing home comes down to the finance arrangements.

If you’ve bought the land first and then are building your new home, you will have two contracts - one for your mortgage on the land and a construction loan for the build of the house. Depending on the situation, the loans may be parcelled together or they may be separate.

Usually, a construction loan is drawn down in stages of an agreed loan amount, meaning you will only pay the interest on the amount as you use it. There are usually four construction stages:

  • Pouring the concrete slab
  • Erecting the walls and roof
  • Securing the house (known as the ‘lock up stage’)
  • Completion of the project

With ready-built turnkey packages, it’s a little more simple. The two contracts are bundled together and because there is a fixed price for the house and land, the finance is released to the property developer immediately and you, or your tenants, can move in straight away.

When building your own home you will obviously have more choice over the design than with a ready built property. Your property developer will show you a range of customisable home designs that you can select from, and you will also have the option to add on extras.

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Things to consider when buying a turnkey house and land package

1. Infrastructure

While developers are responsible for laying down basic infrastructure like roads, sewage, utilities and water, it’s things like a lack of public transport, amenities etc that could impinge on your lifestyle. 

Developers will buy land for houses where there’s a lot of it, so it is often quite far from metropolitan areas. It’s important to be aware of things like: how far the local supermarket is; how far a doctor or hospital is; and whether there is any kind of public transport nearby. 

2. Be aware of all inclusions and exclusions

Many buyers will see advertisements of beautiful house and land packages, unaware that the advertised price is likely to be the minimum cost available and doesn’t include any additional inclusions. 

House and land packages have basic finishes, but if you want to enhance the appearance of your home to show-off your personal style, these upgrades will incur an additional fee. For example, you might choose to:

  • Add a covered terrace or deck
  • Upgrade to a smart home
  • Change the layout of a predetermined floor plan
  • Add cornices or change the paint colour
  • Upgrade splashbacks or benchtops
  • Upgrade flooring

All of these changes and upgrades can add up, so be aware that anything outside of a basic package is going to cost you more. 

3. Factor in taxes, legal and stamp duty costs

When you’re purchasing a house and land packages, costs like registration fees and stamp duty are not included in the price. Depending on where you are buying and your circumstances, you may also be eligible for first home buyer incentives. For example, in NSW, you may be eligible for the First Home Owner Grant, or the First Home Buyers Assistance Scheme (Source: NSW Government Revenue). 

Buyers will also need to engage a conveyancer or solicitor for legal due-diligence to ensure all regulatory and council requirements are being met. Also ensure that you have your solicitor look over any contracts before you sign. 

An added bonus is that stamp duty on house and land packages only applies to the land, whereas you pay the full amount when purchasing established homes.

What deposit do I need for a home and land package?

You will usually need a 10% land loan deposit and a 5% deposit for the construction loan when building your home. With ready built turnkey properties, you may only need a 5% deposit, but every situation is different, so it’s a good idea to speak to a broker to understand your options.

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Other helpful tips and advice

  • Have extra money put aside as a buffer in case building costs blow out.
  • Research property developers and builders to see if they are experienced and reliable.
  • Make sure you know what is included in a fixed-price contract.
  • Try to avoid making changes to the builders’ contract as it can rapidly increase costs.
  • For investors, you may be able to claim extra tax benefits and depreciation because they’re new homes.

Disclaimer: Blogs are written expressly for education purposes and content is based on the opinions of the authors or as otherwise cited. All information is current as at publication release and we take no responsibility for any factors that may change thereafter. Doorsteps Finance Pty Ltd and Doorsteps Solutions Pty Ltd do not accept any liability or responsibility whatsoever to any error or omission or any loss or damage of any kind sustained by a person or entity arising from the use of this information. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.

Doorsteps Finance Pty Ltd ACN 648 541 879 (Doorsteps Finance) is a credit representative of Australian Finance Group Ltd ABN 11 066 385 822, the holder of Australian Credit Licence 389087. Doorsteps Finance is authorised under credit representative number 531036.

Doorsteps Solutions Pty Ltd ABN 60 654 334 246 and Australian Credit Licence 537369 (Doorsteps Solutions).

Doorsteps Finance and Doorsteps Solutions are majority owned by OpenAgent Pty Ltd. OpenAgent Pty Ltd does not act on behalf of Doorsteps Finance Pty Ltd.

Disclaimer: Property reports contain property estimate data and information provided by RP Data Pty Ltd trading as CoreLogic Asia Pacific ABN 57 087 759 171 (CoreLogic) and OpenAgent Pty Ltd, which is general in nature. It is not a professional property valuation or advice to be relied upon. The actual market value of the subject property may differ. We and CoreLogic do not warrant the accuracy, currency or completeness of the data and information to the full extent permitted by law, each excludes all loss or damage howsoever arising (including through negligence) in connection with the information. You rely on the property estimate at your own risk.

Disclaimer: Doorsteps Finance Pty Ltd ACN 648 541 879 (credit representative no.531036) is authorised under Doorsteps Solutions Pty Ltd ACN 654 334 246, Australian Credit Licence 537369. Any credit application made through Doorsteps Finance Pty Ltd is subject to approval, terms and conditions, fees and charges.

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