Types of House and Land Packages

There are usually two types of house and land packages offered by developers: purchasing the land from the developer before their build the house, or purchasing the completed home after developers construct it on their own land.

If you choose the first option and buy the land prior to construction, you will be paying a deposit, which usually comes to 10% of the purchase price, and you will need to pay progress payments. You will therefore need two different loans- a land loan and a building loan- but you will only have to pay stamp duty on the value of the undeveloped land, not on the cost of construction.

If you choose the second option the required deposit will be less, usually around 5%. There are no progress payments; with the balance being due once construction is complete. One advantage is that this allows you to defer payments until the house has been built, perhaps reducing the strain on your financial planning. The disadvantage is that stamp duty is payable on both the house and the land, and the developer may increase the total purchase price to compensate for interest costs. It is likely that this option may end up being more expensive overall.

Choose the package that best suits your current financial needs and make sure you are clear on the terms and inclusions before you finalise agreements.