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[MoreMore Insights] House & Land Package



If you want to own a brand new house in Australia, you need to know how to buy House and Land Package. Most new communities in Australia are sold by land developers. Buyers only buy land plots from land developers, and builders are required to help you with house construction. This process is usually called " House and Land Package", which is the most common form of new house purchases in Australia.



The Process of House and Land Package



1.Confirm the land & housing package.


You need to do a lot of research: choose the right developer, and look at the environment, location and amenities before you make a final decision.


2.Sign the formal contract of land and house construction, and pay the deposit.


This stage requires you to review the contract, which is usually done by a lawyer or solicitor. In the vast majority of cases, the land developer and the home builder are two different companies, so buyers need to sign two separate contracts:

Land purchase contract with land developer: normally 10% of contract price should be paid as deposit;

Building contract with a Home Builder: typically 5% of the contract price as deposit.

If the buyer is an overseas investor, an application to Australia's Foreign Investment Review Board (FIRB) is also required.


3.The buyer arranges financing to pay the balance of the land and settles the land


Only when all the relevant infrastructure on the land is ready, the developer can register the title of the land. After the deed is registered, you can complete the settlement of the land and start preparing for the next stage of construction.


Buyers of the house & land package will need to apply for a hybrid loan consisting of both the land loan and the construction loan. Land loans, like ordinary mortgages, are used to settle land first; Construction loans pay for the construction of the house.


4.The builder goes through the approval procedures and is ready to start building


The process of house construction in Australia is generally divided into five stages: slab, frame, lock-up, fixing and complete. At the end of each phase, the builder will provide the acceptance results of the construction of the phase, and the buyer shall pay the corresponding phase fees to the builder after the acceptance. If the buyer applied for the construction loans from the bank, then the buyer will need to send the invoice of each construction phase to the bank, and then the bank will pay the builder directly from the construction loan. So it's important to choose an experienced builder, and also check the reviews of this builder.


5.The construction is completed and the buyer moves in.


Once your house is built, there will be some legal documents that need to be signed and then you can move into your new home.




Advantages of House and Land package


Besides occupying a large area, and good living experience in a brand new house, one of the most significant advantages is that house & land package can effectively save stamp duty. Because in these packages, the land contract is independent of the construction contract, and you only need to pay stamp duty on the land price, not on the construction. House & land packages are very popular among first home buyers, upsizers and investors. Another advantage is that you can make more choices in house design yourself.


Looking for a new House & Land Package at the moment? Talk to your professional mortgage brokers at Moremore Finance to organise a loan pre-approval, so you can have great confidence to go into the new House and Land market.



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