The complete guide to House and Land Packages
Table of Contents
The real estate market across Australia has been on an uptrend for years.
Combined with several federal incentives, this has led to home buyers going on a spree.
Because of Covid 19, more people across the nation are trying to switch to newer, more spacious, and greener homes.
A growing sustainability movement is also driving new construction that is more environmentally friendly.
Such properties are available less in cramped megacities and more in the suburbs.
As a result, suburban property rates across Australia have shot up a lot.
Current scenario:
- For the ACT real estate market in Canberra, this is especially true as the market is still red-hot.
- On top of that, acquiring land is difficult as the capital government restricts land buying and construction by individuals.
- The areas on offer are green and ideal for luxury living.
- Apart from all these issues, you still have to deal with local councils and constantly changing regulations.
What are House and Land Packages?
House and Land Packages are property plans that bundle a plot of land with a built home.
That means you buy both the land and the house together, rather than purchasing land and then hiring someone to build it.
So builders get the land from the local Government. After that, they package these plots with various home designs and plan options.
It is an all-inclusive deal, great for growing families, upsizers, and investors.
Types of House and Land Packages by size
House and Land packages projects are carved out of “land estates.”
Depending on size, they are divided into small, medium, and Master plan.
Types of House and Land Packages by builder offering
There are two common ways of buying into a construction project:
Off the plan package:
- These are simply packages where you purchase land from the developer and then pay a third party for construction.
- The Plan may not include everything. For example, Flooring, Driveway, et al.
- There are two steps instead of one, meaning you have to deal with two parties(land owner and builder).
Turnkey package:
- The land and built house are both included in these plans. You just have to “turn the key.”
- Everything is included in such packages, including things like decor, landscaping, and flooring.
- You deal only with one vendor for the perfect combination of the land and expert work, all in one package.
Difference between Off the Plan and Turnkey Packages
- Off the Plan is cheaper initially. However, you would have to pay more to add amenities in the future.
- Turnkey investments are safer, as you do not have to depend entirely on third parties, like in Off the Plan packages.
- You do not have to deal with the local Government and bureaucracy if you choose Turnkey packages.
- In Turnkey, you only deal with one party for the entire project.
How do House and Land Packages work?
There are five significant steps in starting and completing a House and Land package.
The construction loan is “drawn out”, according to what step the project is at. Those steps are as follows:
- Base Stage : This stage is when the drains, underground electrical cables, and concrete slab has been completed.
- Frame Stage : The stage when a home’s frame, garage and trusses is completed and approved by a building supervisor.
- Lock Up Stage : The stage when your home’s brickwork, windows, roof covering, and plumbing are completed.
- Fixing stage : The stage is when all internal cladding, infills, architraves, skirting, doors, baths, and cabinetry of the house are fitted and fixed in position.
- Completion: This stage is when all painting, floor coverings, plumbing fixtures, appliances, and water tanks have been completed.
How to choose a House and Land Package?
These are the essential things to look out for:
- Location and proximity to your place of work/significant cities.
- Availability of important institutions like schools, hospitals, and shopping centers.
- Value of the local real estate and appreciation.
- Record of the builder offering the package.
- Affordability. It’s always better to choose a budget where you have enough in case of future upgrades and not max out.
How long do ‘House and Land Packages’ take to complete?
The time taken to build depends on the following steps:
- Sewage and other public utilities are installed. If you have bought at this early stage as an investor, there can be a delay of 1-2 years before you can start construction.
- After the construction of public amenities, the title is transferred to your name, and the building begins.
- If the local council approvals are in place, construction can start immediately. The construction loan is used for this.
- Then you pay off any remaining amount and stamp duty. After that, you get council approval and construction.
Steps to buying House and Land Packages
- Pre-approval from loan for the bank. Once you have pre-approval, you can confidently approach builders and start looking at and comparing projects.
- Once you like an estate, book the land and continue looking at design with the builder. This ensures a low acquisition cost, and the land you want is reserved.
- Sign the offer. There are conditional and unconditional options. At ABM Homes, we offer different kinds of agreement options.
- Payment of deposit. The funds are held in a trust account till contract completion.
After completion and final documentation, the property is ready to move/rent.
How does financing a house and land package work? | What kind of loan should I take?
The loan is split into two in a bundled deal.
- The land is bought with a loan, similar to a mortgage. It also has a similar payment structure. You start paying after you get ownership of the land.
- The build is finished with a construction loan, also called a “draw down loan.” This loan is approved in full, but paid out in installments.
- These installments depend on the current stage of the project. You only make payments for the amount paid out.
Stamp Duty on House and Land Packages
Another great thing about these packages is the stamp duty payment. This duty varies by region.
Stamp duty is only paid on the value of the land. So you don’t have to pay stamp duty on the value of the construction amount.
Deposit for House and Land Package
The amount of deposit you need to pay depends on the kind of project you have opted for:
- For Turnkey, it’s usually about 5%.
- In Off the Plan, you will usually pay about 10%.
Government grants and incentives for a House and land package?
- The Australian Government has financial incentives for House and Land Packages. Most of these incentives are for Turnkey projects.
- For first-time owners, the First Home Guarantee provides concessions that let you buy a house with a deposit of just 5% of the total value.
- First Home Owner Grant also provides cash incentives for people buying their first property. This incentive varies from state to state.
- You also get a stamp duty exemption on the construction amount, paying duty only on the land value.
Reasons to buy House and Land Packages
- Transparent pricing: Most contracts are easy to understand. You know exactly what you are buying and there are no unexpected charges.
- More affordable: Tax incentives and exemptions make the financing options very attractive.
- Less maintenance: As the most stringent norms are followed, you won’t need to worry about wear and tear for yeast to come. Most homes also come with Guarantees and Warranty options.
- Financial Certainty and set terms: As the price is all-inclusive and agreed in the beginning, you never have to think about rising prices or changing interest rates.
- Administration and Paperwork: Your building partner handles everything, ensuring you don’t spend endless time trying to understand regulations.
- Easier moving in process: Your living experience is plug-and-play, as you get the whole package, ready to move.
- Great for investment: House and Land Packages are growth catalysts in the local market, and this in turn makes appreciation shoot all the way up.
Attractive for rentals: With assured rental options, you have an asset that generates cash flow.
Reasons to buy House and Land Packages with ABM Homes
ABM Homes has a combined experience of more than 25 years in the ACT real estate market. All our homes come with 6 months service guarantee and 7 years structure warranty.
Our projects are super sustainable and come with everything included. Contact or visit our team today.
