Is a house and land package good value for money?


Have you always imagined yourself with oak floors, not walnut? A walk-in wardrobe with shelving units just because? An ensuite with nooks for all your weird frog figurines? Whatever your preferences, you want your house to be just right for you.


House and land packages can be a great option for first-home buyers: competitive prices, tax savings and the chance to customise the way things look. Plus, with land in inner suburbs becoming more scarce, new estates can offer development space the city never will.

There are two options available for you to choose from - vacant land purchase and build with a registered builder, or a House & Land Package.

But, as with any home, there are pros and cons to a house and land package. Follow our tips for making an informed choice.


Everything is new.

House and land packages are like a freshly-ironed shirt: everything is neat, all the lines are straight and it smells a bit like when your mum does your washing. But there are benefits beyond the aesthetics. Newly-built homes tend to be more energy-efficient and when you choose a reputable builder, may not need repairs for many years. The home will be covered by a builder’s warranty, meaning you’re protected if anything goes wrong.

Your surrounds might also be new. Many houses and land packages are located in master-planned estates where everything is deliberately designed for the new community. Your brand-new bedroom window might overlook a brand-new supermarket and a brand-new bike track and a brand-new pond with lots of brand-new ducks. You also have the opportunity to select optional upgrades to add on to your new home if you can borrow with your finance.


You might be eligible for stamp duty tax deductions and other savings.

Besides savings on list price and ongoing maintenance, house and land packages can come with tax benefits. Before the house is built, stamp duty is only payable on the land component – not house and land combined – so you can save by buying off-the-plan.

To further sweeten the deal and entice first home buyers to house and land packages, many state governments now restrict stamp duty concessions and first homeowner grants to those who build or buy a newly-constructed home.

Some developers even offer rent-to-buy house and land packages, for buyers who want to the market but cannot front the whole deposit right away. You may find additional general information on the State Revenue Office - VIC website as well. It is best practice to get in touch with your conveyancer to confirm stamp duty costs and reviewing land contracts if you have any doubts.


You will probably get to know your neighbours well.

We interrupt your fantasy stroll down your new hallway to bring you this reality check. A house and land package might offer good value and freedom of choice. There are floorplans to suit almost any situation and finishes to make you feel like royalty.

But there can be downsides. New estates tend to have smaller lot sizes than established areas. A low-maintenance garden or courtyard could be perfect for you now, but will it still work if you get a rescue greyhound or several children?

Consider the location, too. New estates are often constructed in outer-ring suburbs, where employment opportunities and public transport may be harder to come by. Saving money on your new house is great, but not if those savings are eaten up by expensive commutes or salary cuts.


Be clear about what is included.

The idea of a ‘turnkey property is appealing, but make sure you know what is included. Many builders charge extra for things you might not have considered, like fences, landscaping and pathways.

Make yourself familiar with some of the less obvious inclusions, too. New builds typically cut costs with lower ceilings or lesser-quality fittings. The difference between 2400mm and 2700mm ceilings does not sound like much, but it is impossible to change once your house is built. Visit plenty of display homes to see the specifications in action.


Everything will take a little bit longer.

Building a home can be a lengthy and stressful process. Choosing backsplashes and soft carpets and a synchronised Christmas light display might sound funny now, but each decision takes time. Even after you move in, you will need to wait for plants to grow, other families to arrive and perhaps even for amenities to be built.

Property values in outer-suburban areas can appreciate more slowly than in urban locations, too. It is especially an issue in large developments where space is plentiful and supply outstrips demand. Slower capital growth could impact your ability to move house again or climb the property ladder quickly.

Unlike buying an established home, a house and land package off the plan requires a bit of imagination and a dose of good faith. It can be hard to know exactly what you will get when it is time to pick up the keys.

Weigh up the options with your eyes wide open. If a brand-new home built just to your tastes still feels right, go forth and research. As you would with any purchase, make sure you fully understand the terms of your contract and know exactly what is included. ASA Mortgage Brokers is working in partnership with Buyers Agents and Real Estate Agents who are reliable and willing to provide exceptional service for your needs.


This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice. The original content was quoted from ME Bank Shared Blog.


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