What is a House and Land Package?
A house and land package simplifies the process of building a new home by bundling the price of the land and building into one. But there is a lot more that goes into them and it's useful for first home buyers to learn as much as they can before making a decision. That's why we've created this guide to all things house and land packages, including how they work, how to finance them, some important benefits and limitations to be aware of and how Brighton Homes can offer one to you.
What is a House and Land Package and How Do They Work?
A house and land package combines home and land loans to provide a quick and inexpensive way to find an appropriate property for your needs. This simple transaction involves two contracts, one for the land and one for the house. They are popular in Australia because they often have fixed-prices that include the price to construct the property along with the land meaning no surprise additional costs or extra charges.
Essentially, home and land packages allow customers peace of mind, along with a quicker, easier and more cost-effective alternative to organising location and construction separately. At Brighton Homes, we can create custom packages for those who already have a block of land by adding on the house portion and any requested additions and changes. This appeals to many first home buyers who want to be guided through their home buying journey.
Buying a House and Land Package
The biggest difference between purchasing a house and land package compared to other home buying options is how the financing works. For example, when purchasing an existing home, you only need to take out a regular mortgage loan, but house and land packages work by requiring you to take out two loans that are generally bundled together as part of the fixed price. These two loans include:
- A standard mortgage on the land
- A construction loan for building the house
As soon as the ownership of the land is transferred after settlement, repayments on your regular mortgage loan will need to start being paid. While the construction loan is only required if you are building, and once construction begins that is when the lender pays the relevant stage claims as they become due. The stages include (in order):
- Lock up
- Fit out
There are also governments schemes and grants - including the first homeowners grant - that can contribute towards purchasing a house and land package.
House and Land Package vs Traditional Purchase or Building of a Home
Since the majority of housing estates are often located in outer suburban or greenfield areas where land is cheaper, the land component of a house and land package may often be lower in price and can offer more value than an established home in an established area.
Also, the time between placing a deposit on the land, completing the land purchase and then making building progress payments using the construction loan also gives you a bit of time to sort out your finances rather than coming up with the full amount upfront. However, it is important to keep in mind that in order to get your finance pre-approvals in place, you may be required to pay the full amount upfront. If you don’t have enough deposit, you may have to defer the purchase until you have more deposit, though this will depend on your lender and the type of finance you are applying for.
Pros of a House and Land Package
Save on Stamp Duty
When it comes to paying stamp duty on a house and land package, due to the home not being built yet, you only need to pay stamp duty on the land component of the fixed price. When it comes to paying stamp duty on a house and land package, as the home is not built yet, you only need to pay stamp duty on the land component of the fixed price. Depending on your financial situation, make sure to check with your lender if you are eligible for a stamp duty exemption or concession.
To understand how much stamp duty you could be paying on your property, check out our Stamp Duty Calculator!
Unlike an established home that may need time and effort in its upkeep, there is no unwanted maintenance with a new property that comes as part of a house and land packages. At least for the first several years, you won't have to worry about major repairs or having to add any features that alter your new home to meet personal demands.
Cons of a House and Land Package
Due to the vast majority of these house and land packages being located in housing estates outside of cities, you don't have much choice of where you want to build. Many of these estates are still in development building schools, medical services, parks, shopping centres, which only emphasises the importance of selecting a land package house by carefully considering the surrounding area.
House and Land Packages with Brighton Homes
At Brighton Homes, we offer for you the chance to build your dream home with house and land packages in Brisbane, on the Sunshine Coast and Gold Coast. Our packages, due to not being built yet, are flexible because they allow for the option to add on any upgrades or modifications to tailor your home to your lifestyle.
If you are building to invest, a house and land package is great way to go because you can claim the depreciation on the build while getting capital growth on the overall property value. The locations we build in are major growth suburbs and as the infrastructure and demand for these areas increases, so will the rental return and overall property value.
Why it's better to build with Brighton:
- 60 Year Structural Guarantee – Built to last and last and last
- 24 Month Warranty – Double the industry’s 12 month standard
- 8 Quality Inspections – Inspections to ensure highest quality
- 30+ Years Experience – Supported by the NXT Group, with three decades of history.
To discover why it’s better to build with Brighton display homes or visit your nearest display village today!