Table of Contents
Let’s start by defining a home & land package… As the name suggests, a home and land package is when you purchase an off the plan or un-built home with a block of land together at the same time.
5 Pathways
Generally speaking, you have five pathways (if you like) when it comes to owning a brand new home:
- purchase (or already own) an existing home, you knock it down and rebuild a new home
- buy a vacant block (registered or unregistered), and you build a brand new home
- a home and land package
- you buy a spec or a display home – which is a newly-built home for display purposes or otherwise
- purchase a brand new home from someone who just built it
The good news is that there is no good or bad decision when choosing from the above options. It all depends on your circumstances, your requirements, your needs and wants.
Having said that, there are special benefits to purchasing home and land packages.
The Benefits
Benefit ONE – Lower Transfer Duty
When you purchase a home and land package, you only pay transfer duty on the land component. Essentially if you are signing 2 contracts, one for the home and one for the land then this will work.
However if you are signing a single contract for the home and land package, then you will pay transfer duty for the entire amount of the package price. Please check with your consultants for advice.
Benefit TWO – Turnkey Package
This is an interesting one as the definition of turn-key in the building industry is used very loosely in my opinion. Turnkey means very different things to a lot of different people.
Does it include 40mm stone? How about waterfall edges? Are wall hung vanities included? etc…
So for the purposes of this, let’s define turn-key package is providing you a home that is ready to live including floor coverings, blinds, Flyscreens, driveway, fencing, turf, mailboxes, clotheslines, antennas, etc…
So basically, you can move into the new home and you don’t need to do anything else.
Benefit THREE – Less Thinking
Another benefit for purchasing a home and land is that the builder has done all of the thinking for you. Because of their experience, they know what you need in your new place and they have put it all together for you. This can be very beneficial as building a new home can very complex and thinking of everything without any experience can prove very difficult if not costly for you.
Benefit FOUR – Fixed Price
One fantastic benefit to purchasing a home and land package is that they have a fixed price (well generally). Unless you add some options or make changes (if you are allowed), you have a fixed upfront price and you are clear about all of your costs.
This is really beneficial for your peace of mind. I would actually pay even more (within reason) to know that my build price is fixed.
Imagine if I sell you a home and land package at $600,000. I then charge you an extra $30,000 along the way for spoil removal, extra piering, temporary site fencing, etc…
It’s not how you want to experience your building journey.
Benefit FIVE – Best Lots
Generally when a new estate is released, builders get first dips on which blocks of land they want before the public even gets the chance. This means that some of the best blocks are already taken by the time you, as the client, come along to purchase a block of land.
So buying a home and land package will provide you with better land choices that you would otherwise would not be able to purchase on your own.
Benefit SIX – Lower Costs
Because you are purchasing the whole package, you generally get some good discounts and value for your dollars. You also get a complete package so there is a serious time saving for you as the client (what’s your time worth?).
You don’t have to find landscapers, concreters, blind suppliers, etc… Instead, you simply choose your design, block and builder and get the keys to move in (or rent out) when the home is good and ready.
Benefit SEVEN – Best Land Price
Given that the builder will usually buy land in bulk (depending on the builder), they may get better pricing. AND if they buy the blocks months ago and the market has moved, you still get yesterday land price which is always good for your equity growth.
The key here is to find a builder who has access to loads of stock and sourcing land is part of their process. If it’s a small builder or a builder that does land acquisition ad-hoc-ly, then they may not be the best home & land package partner you want to pick.
A Note
Like anything, always find a reputable builder that you can trust. Whether you are purchasing it direct from your builder or through a reputable partner (investment firm, real estate agent, mortgage broker, etc…), a reputable builder is the most critical part of the equation.
